The standard rate of Irish VAT is due to increase to 23% with effect from 1st March 2021.
The rate had been reduced to 21% for a six month period from 1st September 2020 to 28th February 2021.
Please be aware that the VAT rate reduction from 13.5% to 9% for certain goods and services, mainly within the tourism and hospitality sectors, will continue to apply until 31st December 2021. Please follow link for more details: https://www.revenue.ie/en/vat/vat-rates/what-are-vat-rates/second-reduced-rate-of-value-added-tax-vat.aspx
To prepare for the VAT rate change, there are a number of practical issues that taxpayers should consider as follows:
1. Update your Systems
2. Amend your Pricing structure if necessary.
3. Review and/or Revise your Contracts
4. Amend your Sales invoices
5. Don’t forget the Reverse Charge Mechanism especially for invoices dated pre 28th February but in circumstances where they’re received after 1st March 2021.
6. Credit notes – If you initially raised an invoice charging 21% VAT but the customer requests a credit note after the VAT rate has changed i.e. after 1st March 2021, please be aware that you may be required to apply the 21% rate after the VAT rate has returned to 23%.
7. If your business pays VAT to Revenue on a monthly direct debit basis, you should check to see if you’re required to increase this amount after 1st March 2021.
8. Consider how to account for payments on account which are received in advance of the VAT rate change.
9. Annual Return of Trading Details – Please be aware that the Annual Return of Trading Details deadline date has been extended from 23rd January to 10th March 2021 to take account of the rate change in 2020.
According to eBrief No. 030/21, Revenue’s Revised Entrepreneur Relief Manual has been updated to reflect an amendment made to the relief under Section 597AA CTA 1997 by section 24 Finance Act 2020.
Revised Entrepreneur Relief is a relief from the standard Capital Gains Tax rate of 33% that would normally apply to the sale of a business.
It applies to individuals disposing of certain business assets.
The relief provides for a 10% rate of CGT to apply to chargeable gains arising on disposals or part disposals of “qualifying business assets” up to a lifetime limit of €1 million.
The term “chargeable business assets” includes:
The term “chargeable business assets” excludes:
The conditions include:
For further information, please click the link: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-06-02b.pdf