Dáil Éireann Debate, Tuesday - 27 July 2021
357. Deputy Ged Nash asked the Minister for Finance the estimated yield minus costs of developing systems and structure to support the new EU VAT mini one stop shop initiative as set out in a comprehensive review of expenditure 2014 (details supplied); and if he will make a statement on the matter. [39915/21]
Amharc ar fhreagraI am advised by the Revenue Commissioners that new EU VAT rules came into effect on 1 January 2015, changing the place where VAT is chargeable in respect of all supplies of telecommunications, broadcasting and electronic 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 VAT is payable in the Member State where the services are consumed and removes the incentive for businesses in these sectors to locate in low-VAT rate Member States. As a result of the change, EU and non-EU businesses are required to register and account for VAT in every Member State in which they supply these services to consumers. As an alternative, they can avail of an optional special scheme known as the Mini One Stop Shop (MOSS).
The MOSS scheme is a simplification which allows a business engaged in these 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. This enables suppliers to avoid having to register and account for VAT in all the Member States to which they make such supplies. The Irish Revenue web portal for MOSS was developed in advance of 2015 with Ireland being the first Member State to make it available to business to register with MOSS. This was successfully promoted by Revenue through engagement with national and international businesses, representative bodies, and with international business media. As a result, the VAT receipts via the MOSS portal exceeded expectations as many businesses supplying these services opted to register under the Irish MOSS portal. The initial estimate of yield for Ireland was €10 million but the actual yield to date is almost €1.2 billion due to the success in promoting the scheme in Ireland as well as to the significant increases in the electronic services market.
Transitional rules for the period 2015-2018 provided that the Member State of registration would retain a percentage of the VAT collected for other Member States, with the retention percentage being 30% in 2015 and 2016, and 15% for 2017 and 2018. The amount retained by Ireland was €805 million in respect of the four-year period 2015-2018 and, to date, an additional €385 million has been transferred to Ireland by other Member States.
The total IT development cost for VAT MOSS was €1.93m, with €1.05m expended in 2014, the remainder being spent in 2015.
The Deputy might also be interested to know that the MOSS scheme, which has worked so well since 2015, has been extended and turned into a One-Stop Shop (OSS) since 1 July 2021. Retention is not part of this extended scheme.
