changes to ec vat from january 2010
There are major changes to the rules around VAT invoices for EC sales and purchases, how you record the VAT and how you report the transactions to Revenue. This will affect all Irish businesses that trade with businesses in other European Union countries. Find out more about the changes and what you need to do.
On 1 January 2010, changes take place which affect all Irish VAT registered businesses that supply services to overseas customers, or buy in services from overseas suppliers. These changes only affect you when buying or selling from another VAT registered business, sometimes referred to as business to business (B2B) transactions. If you only sell to individual customers, you aren't affected by these changes.
Revenue hasn't yet released details of how these changes are to be dealt with. As soon as this information is available from them, we'll update TASBooks with the relevant changes.
If you need advice about how these changes affect your business, you should check the Revenue website or contact your local Revenue office.
How this affects your TAS program
If you deal with customers and suppliers in the European Union, to make sure you record EC VAT transactions correctly, it's important that you use the latest version of TASBooks. We've already prepared TASBooks for this change, by recording the amounts of goods and services separately when you enter an EC transaction. We'll be making the rest of the changes needed in TASBooks via an auto update before 1 January.
If you aren't using the latest version of TASBooks, contact your TAS Account Manager on 1890 946 881 to upgrade.
A brief summary of the changes
- Changes to the 'place of supply' rule for services
- Reverse Charge VAT
- Changes to VIES Returns
- Changes to the 'time of supply' rule for services
If you need advice about how these changes affect your business, you should check the Revenue website or contact your local Revenue office.
Changes to the 'place of supply' rule for services
In the past, the general rule has been that the 'place of supply' has been where the supplier is based. So a business based in Ireland supplying a service to a business based in France would charge Irish VAT. (There are some exceptions to this general rule, where the 'place of supply' is where the work is actually carried out - these exceptions will continue to apply.)
The general rule will change from 1 January 2010 so that the 'place of supply' will be where the customer is based. The supplier won't charge VAT, but the customer will have to account for VAT using the 'reverse charge' mechanism. EU customers will have to provide a valid VAT number to the supplier to show that they are VAT registered and that the 'reverse charge' mechanism applies.
Reverse Charge VAT
If you receive a service supplied by an overseas business, the supplier will no longer charge you VAT. Instead you'll need to account for Irish VAT using the reverse charge mechanism. It's similar to the system currently used when you purchase goods from a supplier in another EU country - but is reported slightly differently on your VAT return. In short, you have to account for the VAT due on the service that's been supplied and then you can recover the VAT paid, in accordance with the normal rules for recovering input tax.
Changes to VIES Returns
If you supply goods to businesses in other European Union countries, you're probably used to filing quarterly VIES returns, showing the total value of supplies made to each business customer and their VAT number.
The VIES return will change from 1 January 2010 when the supply of services will also need to be included. Many businesses will be required to file their VIES return monthly rather than quarterly and it will be compulsory for all businesses to file their VIES return online, using the Revenue Online Service (ROS.ie).
If you are going to be filing VIES returns for the first time, you should register with VIMA as soon as possible. Contact the VIES section in VIMA on 1890 251010.
If you’re going to be filing online for the first time, you should register with ROS.ie as soon as possible.
More information >>
Changes to the 'time of supply' rule for services
There will also be changes to the time of supply rules for services where the 'reverse charge' mechanism applies. These changes are to ensure consistency across the EU.