Dáil Éireann Debate, Tuesday - 8 July 2014
225. Deputy Charlie McConalogue asked the Minister for Finance if his attention has been drawn to an issue (details supplied) which makes Irish companies selling services in the UK uncompetitive against UK-based competitors; his plans to address the situation; and if he will make a statement on the matter. [29904/14]
View answerI am advised by the Revenue Commissioners that the EU VAT Directive, with which Irish and UK VAT legislation must comply, distinguishes between a supply of goods and a supply of services. Where an Irish VAT registered trader makes a supply of goods to a UK business then the Irish trader zero-rates the supply and the UK business self-accounts for VAT on the goods. The UK trader will have the right to deduct this VAT if the goods are used for his taxable supplies.
The position with services is that where an Irish VAT registered trader makes a supply of services to a UK business then the place of supply for VAT purposes is the UK and the Irish trader zero-rates the supply, and the UK business self-accounts for VAT. Again, the UK trader will have the right to deduct this VAT if the services are used for his taxable supplies.
In this way, suppliers established in Ireland compete on a level playing field in the UK market with UK established suppliers.
