Dáil Éireann Debate, Thursday - 16 July 2015
164. Deputy Michael McGrath asked the Minister for Finance if he expects to achieve the €100 million in value added tax from changes to how it is applied for cross-border European Union telecommunications broadcasting and electronically supplied services, as set out in budget 2015; and if he will make a statement on the matter. [29785/15]
View answerI am advised that at present there is no change to the estimate as set out in Budget 2015 in relation to the impact on receipts from changes to how VAT is applied for Cross-border EU telecommunications broadcasting and electronically supplied services.
On 1 January 2015, new EU VAT rules came into effect changing the place where VAT is chargeable in respect of all supplies of telecommunications, broadcasting and e-services to consumers. VAT on these services is now chargeable where the consumer is located instead of where the supplier is located. This ensures that the VAT goes to the Member State in which the services are used. The estimate of €100 million in respect of these changes was based on two specific and immediate VAT inflows into the Irish Exchequer directly resulting from the new rules. The 1st element was the VAT revenue shifting from Luxembourg in respect of services bought by Irish consumers from Luxembourg-based suppliers. The 2nd was VAT revenue shifting from the UK Exchequer in respect of TV broadcasting services currently provided from the UK to Irish consumers. The estimate of €100 million was a combination of these two elements and I am advised by the Revenue Commissioners that these projections were very accurate.
However, there is a very welcome additional source of revenue that we were unable to estimate at the time. As a result of the change, businesses are required to register and account for VAT in every Member State in which they supply such services to consumers or, alternatively, to avail of the optional special scheme known as the Mini One Stop Shop (MOSS). The MOSS scheme is a simplification scheme which allows a business engaged in those supplies to register in a single Member State, to file a single quarterly return and pay its VAT liability for all Member States through a web portal in the Member State of registration. The return details and payments are transferred by the Member State of registration to the relevant Member States of consumption with the Member State of registration retaining a percentage of the VAT collected. The percentage retained is 30% during 2015/6 and 15% during 2017/8.
I am advised that the total VAT received from other Member States through the MOSS scheme in relation to supplies to consumers in Ireland for Q1 2015 along with VAT retained by Revenue amounted to €32.3 million in Q1 2015.
