Chapter 4 - Services supplied in the State by persons established outside the State

12. Services received from abroad and accountable persons

Summary

This section sets out the main rules under which persons receiving services from abroad, where the place of supply is deemed to be the State, are accountable for VAT. The general provision is that persons receiving such services in the course of their business are accountable and liable to pay tax on the “reverse charge” basis. There is no turnover threshold for the receipt from abroad of these services for business purposes – liability arises on all such supplies. The received services that are subject to the rule are outlined in Chapter 3 of Part 4.

Farmers, fishermen and racehorse trainers who are accountable in respect of received services under this section are obliged to register for VAT, but may “ring fence” the registration to the services deemed to be supplied in the State, other services received from abroad and any intra-Community acquisitions.

Details

(1) Persons in business in the State, or persons registered for VAT in the State, who receive certain services for business purposes from a supplier established outside the State are accountable for, and liable to pay, the tax due on a reverse charge basis. The services covered by this provision are those that are deemed to be supplied in the State under “place of supply rules” in Chapter 3 of Part 4 and include consultancy services, advertising services, etc.

These services are deemed to be supplied in the State by the recipient, who is an accountable person that is liable to pay the tax. There is no turnover threshold for the receipt from abroad of these types of services for business purposes – liability arises on all such supplies.

(2) There is a special rule in subsection (2) for persons in business in the State or public bodies – defined in section 2(1) to cover Departments of State, local authorities and bodies established by statute – who receive services in connection with immovable goods (other than holiday accommodation, telecommunications services, broadcasting services or electronically supplied services, where supplied with the provision of holiday accommodation, and construction services) that are deemed to be supplied in the State under the place of supply rules.

The place of supply for services connected with immovable goods is the place where the goods are located. Specific arrangements for a reverse charge are in place under which customers receiving such services from suppliers who do not have an establishment in the State are accountable for, and liable to pay, the tax due on a reverse charge basis. However, the exceptions mentioned in the paragraph above relating to the provision of holiday accommodation, the supply of telecommunications services, radio or television broadcasting services or electronically supplied services together with accommodation, as well as certain construction services mean that the reverse charge does not apply to them thus requiring the non-established supplier to register and account for VAT in the State if the place of supply is the State.

(3), (4) A farmer or fisherman who is an accountable person because he/she receives services from abroad under this section, or who is an accountable person in his/her capacity as a premises provider (section 17(1)) – is deemed to be accountable only in respect of

• intra-Community acquisitions made by him/her, and
• services received by him/her as above where the supplier is established outside the State, and services provided in his/her capacity as a premises provider under section 17(1).

This “ring fencing” provision means, for example, that a flat-rate farmer can retain his/her flat-rate status. The farmer or fisherman may elect that this provision does not apply to him/her.

(5), (6) Subsection (5) covers the same concept as subsection (3) above, in respect of farmers providing racehorse training services (see notes on section 17(2)): A racehorse trainer who is an accountable person – either because he/she receives services from non-established traders or in his capacity as a premises provider – is deemed to be accountable only in respect of

• intra-Community acquisitions made by him/her,
• racehorse training services he/she supplies, and
• services received by him/her where the supplier is established outside the State, and services provided in his/her capacity as a premises provider under section 17(1).

The racehorse trainer may elect that this provision does not apply to him/her.

Relevant Date: Finance Act 2019