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GAZETTE
APRIL 1982
to be treated as bringing the matter within the scope of
V.A.T.
Building Contracts
I am advised that the Revenue Commissioners take
the view that in V.A.T. terms, it is inappropriate to in-
voice for moneys periodically payable on foot of a
Building Contract, until the project thereunder has been
finalised (until, as contended, the supply of the service
has been completed). By way of concession, it is ap-
parently allowed, in the intervening period, that such in-
voices will be admitted in support of claims for input
credits, provided that they have, in effect, first been
converted into receipts.
Emphasis
The above may seem to evidence a vast number of
complications. There are indeed peculiarities in the
application of V.A.T. to property, but these are largely
attributable to the particular nature of the latter, and
the manner in which the scheme has had to be attuned to
adapt to its many and varied facets. Broadly speaking,
the system, as thus tempered, is workable. A genuine
endeavour should be made to operate same correctly,
and to limit, so far as may be possible, the cash-flow
pressures, which can result from its administration.
I would, however, like to highlight the following pro-
blematical aspects, which tend to present fundamental
difficulties warranting research in individual cases: -
Value Added Tax Regulations, 1979. Of these, perhaps,
the most important in the property context are Sections
2, 3, 4, 10, 11 and 17 of the 1972 Act (most of which
said Sections have been subjected to some form of
amendment, extension or substitution by the other
enactments mentioned) and Regulations 4 and 19. The
Revenue Commissioners have themselves published
(latest edition - July, 1980) a most useful explanatory
booklet - ."V.A.T. on Property Transactions" -
which is almost essential reading.
Additionally, it must be said that the Senior Inspec-
tors of Taxes are aware of the fact that many difficulties
are posed by the application of the legislation to proper-
ty. My own personal experience, which appears to be far
from exclusive, is that they are not only understanding
and helpful, but also prepared to discuss problems in
the abstract.
Postscript
The foregoing is neither a summary nor a guide. It is
certainly not an academic treatise. Its objective is merely
to pinpoint certain salient features of a practical nature.
There are numerous areas in this particular field of ac-
tivity where consultation with "the experts" will un-
doubtedly be appropriate. I can only hope that this arti-
cle will be of some assistance to the profession
generally. •
1.
"Self-supplies".
2.
Leases for terms of not less than ten years to
unregistered parties.
3.
Cases where items (not clearly determinable as be-
ing part of the "immovable goods") are supplied
under Leases reserving inclusive rents.
4.
Arrangements involving the management of pro-
perty and reimbursement for services.
In the natural order of things, a disponer will wish to
recover V.A.T. from his disponee. This (as appropriate)
will be done on an invoicing basis, but questions fre-
quently arise between the parties as to the shoulders on
which the liability for V.A.T. in respect of any par-
ticular transaction should lie. Almost apart from such
procedures as have been established in the wake of the
legislation, this can be a very contentious area, which
can best be handled by prior agreement between the par-
ties.
References
Most of the relevant provisions are to be found in the
Value-Added Tax Act, 1972, Value-Added Tax
(Amendment) Act, 1978, Finance (No. 2) Act, 1981 and
Deposit interest
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