Dáil Éireann Debate, Tuesday - 21 January 2014
200. Deputy Mattie McGrath asked the Minister for Finance if he will ensure that all invoices carry a VAT number or PPS number for moneys claimed against income tax and that if a sole trader does not have this then that payment should go down to personal drawings; and if he will make a statement on the matter. [2457/14]
Amharc ar fhreagraFor a payment to qualify as an allowable deduction, by either a sole trader or a company, the payment must be expended wholly and exclusively for the purposes of a trade or profession. It would appear the Deputy is proposing that, notwithstanding that expenditure met that test, a deduction would not be permitted unless an invoice carried either a VAT or a tax reference number.
The Irish economy is one of the most open economies in the world and significant amounts of services and goods are both acquired and sold cross border. In many instances there can be no requirement that the foreign provider must register for tax in this State. The proposal would therefore require a further administrative burden be placed on Irish businesses over businesses carried on outside the State by requiring those businesses to amend their records to incorporate this proposal. In order to prevent abuse there may also be a need or requirement for the taxpayer to verify the PPS number. Again this would be a further administrative burden. Therefore, while I appreciate the proposal is attempting to thwart non-compliance for the present I do not believe this is the correct approach.
Revenue's tax and duty compliance programmes are under constant review to ensure that they are focussed on the areas of greatest risk, including risks from the shadow economy. Revenue tackles the problem of the shadow economy through a range of compliance and audit interventions including targeted special projects. A variety of methodologies are used by Revenue to identify those who are operating in the shadow economy including covert surveillance, cold calls to businesses and venues as well as pre-arranged aspect queries on specific items.
