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Revenue eBrief No. 46/14 Relevant Contracts Tax – Clarification on the installation of water meters and the hire of plant and machinery (Definition of construction operations in Section 530 TCA, 1997)

Section 530 Taxes Consolidation Act, 1997 contains a definition of construction operations for the purposes of Relevant Contracts Tax (RCT). Following a review, Revenue consider the installation of water meters to be a construction operation. This applies regardless of whether the installation of the water meter takes place as a stand-alone operation or as part of the installation of a system of water supply.

The hire of plant and machinery with an operator is also considered a relevant construction operation. In general, an operator is provided for specialised machinery where used as an integral part of an overall construction operation and would only be provided without an operator where the Principal has a special licence to operate the machinery. Payments in respect of the hiring of such machinery with an operator are subject to RCT. However, RCT does not apply where an operator is not provided with the machinery.

Part 18-02-01 of the Income Tax, Capital Gains Tax, Corporation Tax section of the Tax and Duty Manuals has been updated to clarify this position.

Source: Revenue Commissioners. www.revenue.ie. Copyright Acknowledged.