The VAT Reverse Charge is not being applied properly by the construction sector according to Revenue. This issue has been highlighted following compliance interventions carried out to date in the sector. A number of other issues have also been exposed.

Revenue have increased their compliance interventions in relation to Relevant Contracts Tax (RCT) and the construction sector in general. Following interventions carried out to date Revenue states in eBrief No. 33/16 that the VAT Reverse Charge is not being applied properly in a number of cases. According to the eBrief, some of the issues include;

• Failure on the part of the Principal contractor to self-account for the VAT;
• Incorrect completion of the VAT invoice/document by the Sub-contractor; and
• Application of the two thirds rule where the VAT Reverse Charge applies.

Other issues have come to light relating to payment of country money and operation of RCT.

Those operating in the construction sector are advised to self-review their tax affairs and Principals/Sub-contractors are recommended to regularise their affairs before any Revenue compliance intervention begins.

Further information on the issues arising is set out in eBrief No. 33/16 which is published here.