104. Repayments in specific circumstances

Summary

This section provides for repayment of VAT to be made in different situations.

Firstly, there is a provision allowing repayment of VAT to an individual (or other person without VAT deductibility) who paid VAT on a new means of transport which is subsequently dispatched to another Member State, where more VAT is payable. Repayment of residual VAT is allowed in order to avoid double tax. Secondly, there is a provision which prevents double taxation occurring in respect of prepaid telephone cards. Thirdly, there is a full refund of the VAT element of radios purchased by certain bodies for blind persons.

The section also provides for the making of regulations to permit remission or repayment of VAT on goods shipped on boats/planes to a place outside the State or on goods used in the commercial sea-fishing industry.

Details

(1) Subsection (1) provides that VAT may be repaid (in accordance with regulations) to any private person or an exempt or non-taxable entity who has paid VAT on the purchase of a new means of transport which is subsequently dispatched or transported to another Member State.

Under EU VAT arrangements, the basic principle is that a new means of transport is always taxable in the Member State of consumption. Therefore if, following purchase, a new means of transport is subsequently dispatched or transported to another Member State, it will be liable to acquisition VAT in that other Member State. This subsection provides for the repayment of residual VAT contained in the vehicle to avoid double taxation.

(2) Subsection (2)(d) deals with prepaid telephone cards and ensures that double taxation does not occur because the tax will apply at the time of the supply of the prepaid telephone card and not at the time when the card is subsequently used to access a telecommunications service.

(Telephone cards are defined in section 2(1) in terms of conferring a right to access a telecommunications service or third-party goods and services in certain circumstances.)

(3) Subsection (3) authorises full repayment of the tax element on radios provided by certain bodies for the blind. Such a body must establish to the satisfaction of Revenue that it has for its primary object the amelioration of the lot of blind persons and that the radios to which the claim relates are used for that purpose.

On proof of the facts, a full refund will be made of all tax suffered on the radios in question whether paid on importation, at the manufacturing stage or at any subsequent stage.

(4) Subsection (4) provides for regulations which will permit remission or repayment of VAT:

• on goods shipped on foreign bound ships or aircraft.
• on goods used on fishing boats and associated equipment for the purposes of commercial sea-fishing.

(5) Subsection (5) provides for regulations which will permit remission or repayment of tax on services related to the goods in subsection (4), namely:

• services linked to the repair, maintenance and hire of equipment used in an aircraft or vessel specified in paragraph 4(2) of Schedule 2.
• services linked to the repair, maintenance and hire of fishing boats and associated equipment for commercial sea-fishing.

(See Regulation 38 of the VAT Regulations 2010).

Relevant Date: Finance Act 2019