Irish anti-VAT fraud measures

Fri 24th Jan 2014

The Irish government introduced a number of measures through its Finance Bill to prevent fraud in Irish VAT compliance.  The changes came into effect from 1 January 2014.

Repayment of recovered VAT

VAT registered businesses must refund to the Irish Revenue any deducted input VAT on payables invoices if they have not actually paid their supplier’s bill after six months.  This measure was introduced at the start of 2014 for invoices claimed from 1 July 2013.  This means that input invoices claimed for, but not settled from that date are now liable for a correction in the next Irish VAT return. In addition, the new measure applies to VAT reverse charge transactions, including intra-community supplies.

The Irish Revenue is prepared to put aside this new requirement if the company can demonstrate clear commercial reasons for the delay in settlement.

VAT Fraud Quick Reaction Response Mechanism

Ireland also introduced the EU anti-fraud quick response mechanism.  The enables EU member state countries to apply to the EC to introduce the reverse charge mechanism for domestic supplies of goods in cases where they suspect VAT fraud.  The EC is required to give approval or refuse within 1 month