S.I. No. 306/1992:

VALUE-ADDED TAX (DETERMINATION OF TAX DUE BY REFERENCE TO MONEYS RECEIVED) REGULATIONS, 1992.

VALUE-ADDED TAX (DETERMINATION OF TAX DUE BY REFERENCE TO MONEYS RECEIVED) REGULATIONS, 1992.

The Revenue Commissioners, in exercise of the powers conferred on them by sections 14 and 32 of the Value-Added Tax Act, 1972 (No. 22 of 1972) hereby make the following Regulations:

1. These Regulations may be cited as the Value-Added Tax (Determination of Tax Due by Reference to Moneys Received) Regulations, 1992.

2. (1) In these Regulations--

"the Act" means the Value-Added Tax Act, 1972 ;

"moneys received basis of accounting" means the method of determining, in accordance with section 14 (1) of the Act, the amount of tax which becomes due by a taxable person;

"turnover from taxable supplies", in relation to any period, means the total of the amounts on which tax is chargeable for that period at any of the rates specified in section 11 (1) of the Act.

(2) In these Regulations--

( a ) a reference to a Regulation is to a Regulation of these Regulations, and

( b ) a reference to a paragraph or subparagraph is to a paragraph or subparagraph of the provision in which it occurs, unless it is indicated that reference to some other provision is intended.

3. For the purposes of section 14 (1) of the Act and for the purposes of these Regulations supplies to unregistered persons shall be deemed to include any supplies to a taxable person where the said taxable person is not entitled to claim, under section 12 of the Act, a full deduction of the tax chargeable in relation to the said supply.

4. An application by a taxable person for authorisation to use the moneys received basis of accounting should be made in writing to the Revenue Commissioners and should contain the following particulars:--

(1) the name and address of the taxable person;

(2) his VAT registration number, if any;

(3) the nature of the business activities carried on by him;

(4) the percentage of his turnover from taxable supplies, if any, which related to supplies to unregistered persons:--

( a ) in the period of 12 months ended on the last day of the taxable period prior to the application, or

( b ) in the period from the commencement of his business activities to the last day of the taxable period referred to in subparagraph (a),

whichever is the shorter;

(5) his estimate of the percentage of his turnover from taxable supplies which will relate to supplies to unregistered persons in the period of 12 months commencing with the beginning of the taxable period during which the application is made.

5. (1) The Revenue Commissioners shall, if they consider that a person satisfies the requirements of section 14 (1) of the Act, authorise the person, by notice in writing, to use the moneys received basis of accounting.

(2) An authorisation given under paragraph (1) shall have effect from the commencement of the taxable period during which it is given or from such other date as may be specified in the authorisation.

6. An authorisation to use the moneys received basis of accounting given by the Revenue Commissioners before the coming into force of these Regulations shall be deemed to have been issued in accordance with Regulation 5.

7. (1) An authorisation under Regulation 5 shall not apply to tax chargeable on any supply where the person to whom or to whose order the supply is made is a connected person.

(2) For the purposes of this Regulation any question of whether a person is connected with another person shall be determined in accordance with the following provisions:

( a ) a person is connected with an individual if that person is the individual's husband or wife, or is a relative, or the husband or wife of a relative, of the individual or of the individual's husband or wife;

( b ) a person is connected with any person with whom he is in partnership, and with the husband or wife or a relative of any individual with whom he is in partnership;

( c ) subject to subparagraphs (d) and (e), a person is connected with another person if he has control over that other person, or if the other person has control over the first-mentioned person, or if both persons are controlled by another person or persons;

( d ) a body corporate is connected with another person if that person, or persons connected with him, have control of it, or the person and persons connected with him together have control of it;

( e ) a body corporate is connected with another body corporate--

(i) if a person has control of one and persons connected with him or he and persons connected with him have control of the other, or

(ii) if a group of two or more persons has control of each body corporate and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he is connected;

( f ) in this paragraph "relative" means brother, sister, ancestor or lineal descendant.

(3) In this Regulation "control", in relation to a body corporate or in relation to a partnership, has the meaning assigned to it by section 8 (3B) of the Act.

8. An authorisation under Regulation 5 shall not affect the amount on which tax is chargeable in any of the circumstances referred to in subsections (2) to (9) of section 10 of the Act or tax chargeable on supplies referred to in Regulation 7.

9. (1) A person authorised in accordance with Regulation 5 shall notify the Revenue Commissioners in writing of the percentage of his turnover from taxable supplies to unregistered persons where, for any period of four consecutive calendar months commencing on or after 1 September, 1992, that percentage is less than 90 per cent. Such notification shall be made within 30 days of the end of that period.

(2) Where a taxable person fails to notify the Revenue Commissioners in accordance with paragraph (1), the authorisation under Regulation 5 shall be deemed to be cancelled in accordance with Regulation 10. Such cancellation shall have effect for the purposes of section 14 of the Act from the commencement of the taxable period during which the taxable person should have notified the Revenue Commissioners in accordance with paragraph (1).

10. (1) The Revenue Commissioners shall cancel an authorisation under Regulation 5:

( a ) if the person so authorised requests the cancellation by notice in writing given to the Revenue Commissioners, or

( b ) they consider that the person no longer satisfies the requirements of section 14 (1) of the Act.

(2) An authorisation under Regulation 5 shall be cancelled by notice in writing given by the Revenue Commissioners to the person who was the subject of the authorisation. Without prejudice to Regulation 9, such cancellation shall have effect for the purposes of section 14 of the Act from the commencement of the taxable period during which notice is given or from the commencement of such later taxable period as may be specified in the notice.

11. (1) ( a ) Where a person, who for any period is authorised under Regulation 5 and such authorisation was issued prior to 28 May, 1992, ceases to be so authorised or ceases to be a taxable person, the tax payable by him for the taxable period during which such cessation occurs shall be adjusted in accordance with subparagraphs (b) and (c).

( b ) An amount shall be established and apportioned between each rate of tax specified in section 11(1) of the Act in accordance with the following formula--

where--

A is the total amount due to the person at the beginning of the authorised period for goods and services supplied by him,

B is the total amount due to the person at the end of the authorised period for goods and services supplied by him,

C is the chargeable amount in respect of taxable supplies at each such rate of tax in the 12 months prior to the date of cessation or in the authorised period, whichever is the shorter, and

D is the chargeable amount in respect of total taxable supplies in the 12 months prior to the date of cessation or in the authorised period, whichever is the shorter:

Provided that--

(i) no adjustment of liability shall be made where A is greater than B, and

(ii) the apportionment between the various rates of tax may be made in accordance with any other basis which may be agreed between the taxable person and the Revenue Commissioners.

( c ) The amount so apportioned at each rate shall be a tax-inclusive amount and the tax therein shall be payable during the taxable period in which the cessation occurs.

(2) ( a ) Where a person, who for any period is authorised under Regulation 5 and such authorisation was issued on or after 28 May, 1992, ceases to be so authorised or ceases to be a taxable person, the tax payable by him for the taxable period during which the cessation occurs shall be adjusted in accordance with subparagraphs (b) and (c).

( b ) The total amount due to the person at the end of the authorised period for goods and services supplied by him shall be apportioned between each rate of tax specified in section 11 (1) of the Act in accordance with the following formula--

where B, C and D have the same meaning as in subparagraph (b) of paragraph (1):

Provided that the apportionment between the various rates of tax may be made in accordance with any other basis which may be agreed between the taxable person and the Revenue Commissioners.

( c ) The amount so apportioned at each rate shall be a tax-inclusive amount and the tax therein shall be payable during the taxable period in which the cessation occurs.

(3) No adjustment of liability as provided for in this Regulation shall be made if the cessation referred to in subparagraph 11 (1) (a) or 11 (2) (a) was occasioned by the death of the taxable person.

(4) For the purposes of this Regulation--

( a ) "the authorised period" means the period during which the person was authorised to apply the moneys received basis of accounting:

Provided that where the person was authorised to apply the moneys received basis of accounting for more than six years the authorised period shall be deemed to be for a period of six years ending on the date on which the cancellation of the authorisation has effect.

( b ) "the tax therein" shall be established at the rates specified in section 11 (1) of the Act--

(i) applicable on the date the authorised period ends or,

(ii) applicable at the time the relevant goods and services were supplied where such details can be established to the satisfaction of the Revenue Commissioners.

12. For the purposes of these Regulations and subject to the direction and control of the Revenue Commissioners, any power, function or duty conferred or imposed on the Revenue Commissioners may be exercised or performed on their behalf by an officer of the Revenue Commissioners.

13. The Value-Added Tax (Determination of Tax Due by reference to Moneys Received) Regulations, 1986 ( S.I. No. 298 of 1986 ) and the Value-Added Tax (Determination of tax Due by reference to Moneys Received) (Amendment) Regulations, 1992 ( S.I. No. 93 of 1992 ) are hereby revoked.

GIVEN this 28th day of October, 1992.

F. CASSELLS,

Revenue Commissioner.

EXPLANATORY NOTE.

These Regulations set out the terms and conditions relating to the operation of the moneys received basis of accounting formerly contained in S.I. 298 of 1986. The new Regulations take account of the amendment to section 14 of the Principal Act contained in the Finance Act 1992 .