76 / 262
(1) Is the vendor an accountable person selling in the
course of business?
(2) Has there been development since 31/10/72?
(3 Is the price tax-exclusive or tax-inclusive?
(4) Does the property fall within Section 3 (5) (b)
(iii) that is certain sales of businesses as going concerns
which will not be chargeable to VAT?
Stamp duty is chargeable on the gross price inclusive
of VAT.
A vendor who is doubtful whether or not VAT will
be chargeable in relation to a particular sale may apply
to the Revenue Commissioners for a certificate in this
regard. The Commissioners will require a full statement
of the relevant facts in relation to the property in ques-
tion and on the basis of the facts as so supplied will
indicate whether or not VAT would be chargeable if
delivery were made on a particular date.
Members are reminded that this is necessarily an
incomplete summary intended to alert them to the
provisions of the Act. They should refer to the Statutes,
Regulations and Guide for full information on the
subject.
This article supersedes the circular letter already-
issued in which it was not sufficiently clear that VAT
applies only to property which aas been the subject of
development.
For convenience, the text of Mr. Egans letter is
printed here :
Value-Added Tax
Dear Mr. Plunkett,
Thank you for the revised draft of the circular.
I think you will find that adequate provision is made
in section 34 of the VAT Act to prevent double taxa-
tion in relation to a property deal which straddles the
commencement date for VAT. Assume, for example, a
contract by a builder to erect a private residence for
a customer for a tax-inclusive consideration of £10,000:
the value of the work-in-progress on November 1st,
1972, was £7,000 and £5,000 had been paid by the
customer. The builder's liability on completion of the
house will be as follows :
Contract price
Less
paid prior to November 1st
Balance of consideration
Less VAT deemed to be included
£5,000 @ 3.059%
Consideration liable to VAT
VAT @ 3.156%
Less
Relief under Section 34 :
Value of W-in-P on 1 /11 / 72
£7,000
Paid on account
£5,000
£
10,000.00
5,000.00
5,000.00
152.95
4,847.05
152.95
Balance being undelivered
W-in-P
£2,000 @ 3 %
60.00
Net VAT liability
92,95
The total turnover tax and wholesale tax included in
charges for building work has been estimated to be 3%,
and it may be assumed, therefore, that when the builder
quoted a tax-inclusive price of £10,000 for the house
he included therein approximately £300 for tax. This
will cover the total of the turnover tax, wholesale tax
and VAT which he will bear or pay as follows:
Turnover tax and wholesale tax 3% of 7,000
210.00
Net VAT liability
92.95
Total £302.95
You will see, therefore, that the element of double
taxation is insignificant.
I would emphasise again that the Revenue Com-
missioners consider that the treatment of the creation
of rents is adequately dealt with in Regulation 20 of
the VAT Regulations, 1972, and they do not intend to
issue any special statement in this regard.
Yours sinc.erelv,
P. J. Egan
Principal Inspector of Taxes
Office of the Revenue Commissioners
Dublin Castle
23rd December 1972
Practice Notice
In all Malicious Injury Applications before his Honour
Judge Deale it is necessary for the Claimants' Solicitor
to be present in Court when the case is called as other-
wise costs will not be awarded. This has been the prac-
tice on the Eastern Circuit for some years.
Notice -E.E.C. Lectures
If sufficient numbers of members ask for photocopies of
the lectures delivered in the Burlington Hotel, Dublin,
on E.E.C. Restrictive Practices Law, on Council of
Company Mergers, and on Patents, Know-How and
Trade Marks given by Dr. Gleiss and Dr. Helm on 27
January 1973, it may be possible to supply them at a
reasonable rice. Members would have to pay nearly
£ 8 if they ordered single photocopies of these lectures.
Requests for photocopies should be made to the
Secretary.
Land Registration Rules 1972
In the December 1972
Gazette,
at page 275, the fees in
Part I of the Schedule of Go:;ts are :et out. It has been
pointed out that these fees are strictly subject to Rule
234 of the Land Registration Rules, which sets out in
detail the circumstances in which the fees charged shall
only be half those stated.
ii
The
Income Tax
Acts
The SIXTH SUPPLEMENT to the loose-leaf
volume 'The Income Tax Acts" has now
been published — price 27}p (postage 5|p
extra). The Supplement embodies the
amendments made by the Finance Act,
1972.
Available from the Government Publications Sale Office,
G.P.O. Arcade, Dublin 1.
75