Alcohol Products
Introduction
1. Special rules apply to the payment of VAT on alcohol products when supplied while being held under duty suspension arrangements. In general, VAT is not chargeable on the supply of alcohol products while held under such arrangements but the final supply forms the basis for the charge to VAT which is payable along with the excise duty at the time the good are removed from duty suspension, Section 3B of the VAT Act 1972 (as amended) refers.
Scope
2. The alcohol products concerned are spirits, wine, other fermented beverages, intermediate beverages, beer, cider and perry which are supplied while held under a duty suspension arrangement or which have been the subject of an EU intra-Community acquisition or importation into a duty suspension arrangement in the State.
3. Supplies of alcohol products outside a duty suspension arrangement (i.e. goods supplied after excise duty has been paid) continue to be dealt with under the normal VAT arrangements and are not affected by the provisions outlined in this leaflet.
Alcohol Products supplied while held under Duty Suspension Arrangements
4. In the case of alcohol products from any source (imports, EU intra-Community acquisitions or home produced) which are supplied while held under a duty suspension arrangement, only the last such supply will form the basis for VAT liability and any previous supply, EU intra-Community acquisition or importation, will be disregarded. The VAT due on the last supply will not be chargeable on the VAT invoice issued at the time of supply but rather will be payable with the excise duty by the owner at the time of the removal of the goods from the duty suspension. Accordingly, where alcohol products are supplied while held under a duty suspension arrangement, VAT should not be charged by the supplier or shown on any invoice issued in respect of the supply.
Goods held under duty suspension arrangements which are the subject of an EU intra-Community supply or export.
5. Where alcohol products are supplied while held under a duty suspension arrangement and the goods leave the State as a result of such a supply, the normal VAT rules will continue to apply. For example, if the goods are supplied to a VAT registered trader in another EU Member State the supply will be zero rated. Likewise, if the goods are exported, the supply will be zero rated.
Home produced alcohol products which have not been the subject of a supply.
6. VAT is not payable on removal from the tax warehouse of home manufactured alcohol products which have not been the subject of a supply while under duty suspension. It should be noted in this context that the removal of alcohol products from one tax warehouse to another without a transfer of ownership taking place does not constitute a supply of the goods for VAT purposes.
7. Where a company supplies a consignment of its home manufactured alcohol products to a company with which it is grouped for VAT purposes, that supply, and any subsequent similar supplies between members of that VAT group, is disregarded for VAT purposes. The companies concerned will be required to produce, to the warehouse officer, a letter from the Revenue District responsible for their tax affairs confirming the grouping arrangement between them, and sales within the group will then be disregarded for the purpose of these arrangements.
EU Intra-Community Acquisitions of Alcohol Products
8. VAT chargeable on the EU intra-Community acquisition of alcohol products is payable at the same time as the excise duty is paid i.e. on removal of the goods from a tax warehouse for home consumption. It should be noted that in this case the VAT is not accounted for under the postponed accounting arrangements that apply to EU intra-Community acquisitions generally. If, following an EU intra-Community acquisition, the alcohol products in question are supplied while held under a duty suspension arrangement, the rules set out above apply and the EU intra-Community acquisition should be disregarded for VAT purposes.
Importations of Alcohol Products from outside the EU
9. VAT at point of entry is not chargeable on imported alcohol products being entered for an excise duty suspension arrangement (tax warehousing). Instead, the VAT due on the importation is payable with the excise duty on removal of the goods from duty suspension. If, following importation, the alcohol products in question are supplied while held under duty suspension, the rules set out above apply and the importation should be disregarded for VAT purposes.
Taxable Amount
10. In relation to EU intra-Community acquisitions and supplies, the amount on which VAT is chargeable is the invoiced price of the goods increased by the amount of the excise duty payable. In the case of importations, the taxable amount is the value for customs purposes increased by the amount of customs duty and excise duty payable.
Deferred Payment
11. The legislation relating to the collection of excise duty also applies to the collection of VAT under these arrangements. This means that where a trader has the facility to defer payment of excise duty, payment of VAT can also be deferred to the same date.
Persons Authorised under Section 13A of the VAT Act
12. Persons authorised to receive goods at the zero rate of VAT in accordance with section 13A of the VAT Act will not be required to pay the VAT due on removal by them of alcohol products from a tax warehouse or other duty suspension arrangement. This does not affect their liability to pay excise duty.
Forms to be Used
13. The following forms should be used for payment of the excise duties and VAT:
- excise duty entry (C&E 1087) for EU intra-Community acquisitions where the excise duty and VAT is being paid on arrival in the State;
- SAD (import entry) for imports where the excise duty and VAT is being paid on arrival in the State;
- home consumption warrant (C&E 1115) in respect of deliveries from warehouse for home consumption.
14. In connection with point (c), it should be noted in particular that it is not permitted for warehouse keepers to produce single bulk warrants on behalf of a number of owners of goods - a separate warrant for each owner must be presented.
Deductibility for VAT Return
15. Subject to the normal rules governing VAT deductibility, a trader is entitled to deduct the VAT charged under these arrangements in the VAT return for the period in which the liability arises (i.e. the period in which the VAT is paid with the excise duty). The evidence that the trader must retain in support of his claims to deductibility is as follows:
- in the cases referred to in paragraphs 13(a) and (b) above, a monthly customs and excise statement where the trader uses the deferred payment/FACT schemes, or an official receipt in other cases;
- in the case referred to in paragraph 13(c) above, a copy of the home consumption warrant signed and stamped by the warehouse officer.
Further information
16. Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for the taxpayer's affairs. Contact details for all Revenue Districts can be found on the Contact Details Page.
This leaflet is issued by:
VAT Appeals & Communications Branch ,
Indirect Taxes Division,
Stamping Building
Dublin Castle.
October 2008
This information leaflet which sets out the current practice at the date of its issue is intended for guidance only and does not purport to be a definitive legal interpretation of the provisions of the Value-Added Tax Act 1972 (as amended).