Procurement of goods and services by a Department of State, a local authority and a body established by enactment

1.Introduction

The purpose of this leaflet is to set out the circumstances in which the State, a local authority and a body established by any enactment is required to register and "self account" for the VAT due on goods or services procured by it. In other situations the supplier will be the accountable person, liable to charge VAT to the procuring body. This leaflet should be read in conjunction with the VAT Guide, and VAT Information Leaflet Foreign Suppliers Doing Business in Ireland.

2. Scope of the term a Department of State, a local authority and a body established by any enactment

The term a Department of State, a local authority and a body established by any enactment is broad ranging and includes Government Departments, An Garda Siochana, the Defence Forces, local authorities including regional authorities and harbour authorities, the Health Services Executive, State sponsored bodies, public hospitals, enterprise boards and educational establishments, such as, Universities, Institutes of Technology, Education and Training Boards and schools. For ease of reference in this leaflet these are collectively referred to as public bodies.

3. Circumstances where a public body is obliged to register for VAT with effect from 1/7/2010

3.1 A public body is obliged to register and account for VAT in the following circumstances:-

  • where it acquires, or is likely to acquire, more than €41,000 worth of goods from other EU Member States (intra-Community acquisitions);
  • where it is in receipt of a good which is supplied and installed/assembled (other than as a fixture) by a non-established supplier;
  • where it is in receipt, as a principal contractor, of construction services supplied by a sub-contractor. (See VAT Information Leaflet ‘Reverse Charge Construction’);
  • Where it makes supplies of taxable goods and services whose value exceeds the registration threshold.

3.2 A public body that has been allocated a VAT number is required to provide its VAT number to service providers not established in Ireland. A public body that receives services from a service provider not established in Ireland and has not yet been allocated a VAT number must register for VAT and account for VAT on services received from that supplier.

3.3 Where, exceptionally, a public body is required to register and account for VAT on supplies of taxable goods or services it will be entitled to a VAT credit in their return for VAT incurred on related inputs.

4. Intra-Community acquisitions of goods

A public body which is not registered for VAT must register if it acquires or is likely to acquire more than €41,000 worth of goods from other EU Member States in any continuous period of twelve months. A public body that is registered for VAT, including in the circumstances of the previous sentence, is obliged to account for VAT at the appropriate rate in respect its acquisitions of goods from suppliers in other EU Member States. The public body should furnish details of its Irish VAT number to the supplier in the other Member State who will then apply a zero rate of VAT to the intra-Community supplies to the public body. The public body must then self-account for Irish VAT on the intra-Community acquisition of the goods in its VAT return for the taxable period in which it acquires the goods. Further detail is included in VAT Information Leaflet 'EU intra-Community Acquisitions'.

5. Importation of goods

5.1 Goods imported by a public body from outside the European Union are subject to VAT at the point of entry, at the appropriate Irish VAT rate.

5.2 It should be noted however that VAT due on importations of goods by parcel post will not be payable at the time of importation where the value of each such consignment is €260 or less. The body importing the goods should ensure that its VAT number is quoted on the customs declaration form or Green Label on the packaging. A public body must self-account for VAT on such importations in box TI of its VAT return for the taxable period in which it acquires the goods.

6. Invoices

6.1 A trader supplying taxable goods or services to a public body is obliged to issue a VAT invoice. Likewise a trader is obliged to issue a VAT credit note or VAT debit note to a public body where the appropriate circumstances arise. Traders should be aware of Chapter 18, Guide to VAT, which deals with situations that arise where VAT rates change. For received construction services see Information Leaflet, Reverse Charge Construction.

6.2 VAT becomes due on the 15th day of the month following that during which the intra-Community acquisition of goods or the receipt of services takes place. The VAT rate applicable is the Irish VAT rate that applies to the supply of the same goods or services in Ireland. (The intra-Community acquisition of certain works of art, collectors’ items and antiques is an exception.) VAT is generally chargeable on the invoiced amount in the case of goods and services from suppliers in other EU Member States and VAT is chargeable on the invoiced amount plus insurance and freight charges in the case of imports.

7. Rate of VAT

7.1 Public Procurement Guidelines require a public body to assess tenders for the supply of goods or services on a VAT-exclusive basis. Assessing tenders on a VAT-exclusive basis ensures that all tenders are assessed uniformly regardless of where the tenderer is located.

7.2 The correct rate of VAT appropriate to most supplies of goods or services can be ascertained by consulting the VAT Rates Search, the Guide to VAT, VAT information leaflets and other VAT information available on the Revenue website or their local Revenue District: Contact Details.

7.3 The rates of VAT are zero, reduced, standard, and special rates for farmers and livestock. It should be noted that banking, financial and insurance services are included in the exemptions from VAT.

8. Rate of exchange

A public body that acquires goods or services from an EU Member State which is not part of the EURO zone should use the rate of exchange applicable when the tax becomes due, which is normally on the fifteenth day of the month following the acquisition. The rate of exchange can be, however, as with imports from outside the EU which are expressed in a foreign currency, determined on a calendar month basis under the monthly rates of exchange system for customs valuation purposes. Please refer to Exchange Rates information on the Exchange Rates which can be used in the case of acquisitions from non-EURO zone countries and third countries.

9. Entitlement to recover VAT

A public body that is registered for VAT solely in respect of accounting for VAT on received goods or services is not entitled to recover the VAT incurred on such goods or services.

Where, exceptionally a public body is required to register and account for VAT on supplies of taxable goods or services made by it, it will be entitled to a VAT credit in its return for VAT incurred on related inputs.

10. VAT Number

A VAT number will be issued to a public body where the circumstances described above apply. The public body should apply to its local Revenue District for a VAT number. The public body should account for VAT due under this VAT reference number. A Nil return should be made for any taxable period in which there is no VAT to be accounted for. A public body may apply to have its local Revenue District to have its VAT number cancelled where it ceases to acquire non-Irish goods or services.

11. Intrastat

A public body which acquires more than €500,000 worth of goods per annum from other Member States is required to make a monthly statistical return in respect of these acquisitions. Details of this requirement are contained in the pdfVIES and INTRASTAT Traders Manual (PDF, 3.45MB)

Further information

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: Contact Details.

This leaflet is issued by

VAT Interpretation Branch

Indirect Taxes Policy and Legislation Division,
Dublin Castle.

June 2016

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