Section 5A Special scheme for electronic services
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Amendments
Section 5A inserted by Finance Act 2003 section 116 as on and from 1 July 2003.
(1) In this section-
"electronic services scheme" means the special arrangements for the taxation of electronically supplied services provided for in [Articles 358 to 369 of Council Directive No. 2006/112/EC of 28 November 2006]1;
"EU value-added tax" means value-added tax referred to in [Council Directive No. 2006/112/EC of 28 November 2006]1 and includes tax within the meaning of section 1;
"identified person" has the meaning assigned to it by subsection (5);
"Member State of consumption" means the Member State in which the supply of the electronic services takes place according to [[Article 58]2 of Council Directive No. 2006/112/EC of 28 November 2006]1;
"Member State of identification" means the Member State which the non-established person chooses to contact to state when his or her activity within the Community commences in accordance with the provisions of the electronic services scheme;
"national tax number" means a number (whether consisting of either or both numbers and letters) assigned to a nonestablished person by his or her own national taxation authorities;
"non-established person" means a person who has his or her establishment outside the Community and has not also an establishment in the Community and who is not otherwise required to be a person registered for value-added tax within the meaning of section 1;
"scheme participant" means a non-established person who supplies electronic services into the Community and who opts to use the electronic services scheme in any Member State;
"VAT return" means the statement containing the information necessary to establish the amount of EU value-added tax that has become chargeable in each Member State under the electronic services scheme.
Amendments
1 Substituted by Finance Act 2007 section 97 and Schedule 3.
2 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(a) from 1 January 2010.
If I am a non-established person, what option can I avail of to avoid having to register in each EU Member State where I supply services?
(1) This section introduces an optional scheme (electronic services scheme) which allows a non-EU business (non-established person) that provides e-commerce services to private consumers in the EU to register for VAT in one country, make electronic s...
(2) Subject to and in accordance with the provisions of this section, a non-established person may opt to apply the electronic services scheme to his or her supplies of electronic services to non-taxable persons within the Community.
(3) The Revenue Commissioners shall set up and maintain a register, referred to in this section as an "identification register", of non-established persons who are identified in the State for the purposes of the electronic services scheme.
(4) A non-established person who opts to be identified in the State for the purposes of the electronic services scheme shall inform the Revenue Commissioners by electronic means in a manner specified by them, when his or her taxable activity commences and shall, at the same time, furnish them electronically with the following information-
(a) the person's name and postal address,
(b) his or her electronic addresses, including website addresses,
(c) his or her national tax number, if any, and
(d) a statement that the person is not a person registered, or otherwise identified, for value-added tax purposes within the Community.
(5) Where a person has furnished the particulars required under subsection (4), the Revenue Commissioners shall register that person in accordance with subsection (3), allocate to that person an identification number and notify such person electronically of it, and, for the purposes of this section, a person to whom such an identification number has been allocated shall be referred to as an "identified person".
(6) An identified person shall, within 20 days immediately following the end of each calendar quarter, furnish by electronic means to the Revenue Commissioners a VAT return, prepared in accordance with, and containing such particulars as are specified in, subsection (7), in respect of supplies made in the Community in that quarter and shall at the same time remit to the Revenue Commissioners, into a bank account designated by them and denominated in euro, the amount of EU value-added tax, if any, payable by such person in respect of such quarter in relation to-
(a) supplies made in the State in accordance with [section 5(5)(l)]1, and
(b) supplies made in other Member States in accordance with the provisions implementing [[Article 58]2 of Council Directive No. 2006/112/EC of 28 November 2006]3 in such other Member States:
but if the identified person has not made any such electronic supplies to non-taxable persons into the Community within a calendar quarter that person shall furnish a nil VAT return in respect of that quarter.
Amendments
1 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(b) from 1 January 2010.
2 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(c) from 1 January 2010.
3 Substituted by Finance Act 2007 section 97 and Schedule 3.
As an identified person, what are my return obligations?
(6) As an identified person, you must, within 20 days following the end of each calendar quarter, email Revenue with a VAT return providing details of supplies made by you within the State and within other EU States during the quarter....
(7) The VAT return referred to in subsection (6) shall be made in euro and shall contain the following details-
(a) the person's identification number,
(b) for each Member State of consumption where EU value-added tax has become due-
(i) the total value, exclusive of EU value-added tax, of supplies of electronic services for the quarter,
(ii) the amount of the said value liable to EU value-added tax at the applicable rate, and
(iii) the amount of EU value-added tax corresponding to the said value at the applicable rate,
and
(c) the total EU value-added tax due, if any.
(8) Notwithstanding section 10(9A), where supplies have been made using a currency other than the euro, the exchange rate to be used for the purposes of expressing the corresponding amount in euro on the VAT return shall be that published by the European Central Bank for the last date of the calendar quarter for which the VAT return relates, or, if there is no publication on that date, on the next day of publication.
What exchange rate applies to transactions in a foreign currency for VAT purposes?
(8) In general, for VAT purposes, the exchange rate applicable to supplies in a foreign currency is the latest selling rate recorded by the Central Bank for that currency at the time the tax becomes due (section 10(9A))....
(9) Notwithstanding section 12, a scheme participant who supplies services which are deemed in accordance with [section 5(5)(l)]1 to be supplied in the State shall not, in computing the amount of tax payable by him or her in respect of such supplies, be entitled to deduct any tax borne or paid in relation to those supplies but shall be entitled to claim a refund of such tax in accordance with, and using the rules applicable to, Council Directive 86/560/EEC of 17 November 1986, notwithstanding Articles 2(2), 2(3) and 4(2) of that Directive.
Amendments
1 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(d) from 1 January 2010.
If I am registered for the electronic services scheme and I make supplies to private customers in the State that are deemed to be supplied in the State, am I entitled to a deduction?
(9) E-commerce supplies by a non-EU business to private consumers in the State are deemed to be supplied in the State (section 5(5)(l)). Such a non-EU-established business may opt to participate in the electronic services scheme (see (2)) but is not ...
(10) A scheme participant who supplies services which are deemed in accordance with [section 5(5)(l)]1 to be supplied in the State shall be deemed to have fulfilled his or her obligations under sections 9, 16 and 19 of this Act if such participant has accounted in full in respect of such supplies in any Member State under the provisions of the electronic services scheme.
Amendments
1 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(e) from 1 January 2010.
How does VAT registration for the scheme affect my obligations in respect of registration, record-keeping and payment dates?
(10) As a non-EU-established business that participates in the electronic services scheme, you are deemed to have fulfilled your VAT obligations in relation to registration (section 9), keeping of records (section 16) and payment dates (section 19).
(11) For the purposes of this Act, a VAT return required to be furnished in accordance with the electronic services scheme shall, in so far as it relates to supplies made in accordance with [section 5(5)(l)]1, be treated, with any necessary modifications, as if it were a return required to be furnished in accordance with section 19.
Amendments
1 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(f) from 1 January 2010.
If I do not file my VAT return under the scheme by the due date, am I liable for interest?
(11) Yes. A VAT return to be filed by a non-EU-established business that participates in the electronic services scheme is treated as if it were a return due under the Irish VAT system. In other words, it is subject to interest if not filed by the du...
(12)(a) An identified person shall-
(i) keep full and true records of all transactions covered by the electronic services scheme which affect his or her liability to EU value-added tax,
(ii) make such records available, by electronic means and on request, to the Revenue Commissioners,
(iii) make such records available, by electronic means and on request, to all Member States of consumption, and
(iv) notwithstanding section 16, retain such records for each transaction for a period of 10 years from the end of the year when that transaction occurred.
(b) A scheme participant who is deemed to supply services in the State in accordance with [section 5(5)(l)]1 shall be bound by the requirements of subparagraphs (i), (ii) and (iv) in relation to such supplies.
Amendments
1 Substituted by European Communities (Value-Added Tax) Regulations 2009 regulation 8(g) from 1 January 2010.
(13) An identified person shall notify the Revenue Commissioners of any changes in the information submitted under subsection (4) and shall notify them if his or her taxable activity ceases or changes to the extent that such person no longer qualifies for the electronic services scheme. Such notification shall be made electronically.
If the particulars supplied to Revenue change or I cease to qualify for the scheme, what notice must I give to Revenue?
(13) As an identified person (see (5)), you must inform Revenue of any changes in the details mentioned in (4), or if your taxable activity ceases or changes to the extent that you no longer qualify for the scheme.
(14) The Revenue Commissioners shall exclude an identified person from the identification register if-
(a) they have reasonable grounds to believe that that person's taxable activities have ended, or
(b) the identified person-
(i) notifies the Revenue Commissioners that he or she no longer supplies electronic services,
(ii) no longer fulfils the requirements necessary to be allowed to use the electronic services scheme, or
(iii) persistently fails to comply with the provisions of the electronic services scheme.
(15) The Revenue Commissioners may make regulations as necessary for the purpose of giving effect to the electronic services scheme.
