VAT on Passenger Vehicles

When a business is considering purchasing a vehicle the ultimate cost of the vehicle will be determined by a business’s ability to recover the VAT.

Most businesses are aware that VAT can be reclaimed in respect of the purchase of a commercial vehicle but may not be aware that an element of VAT can be reclaimed in respect of passenger motor vehicles.

To reclaim VAT on a passenger motor vehicle the following conditions must be met;

  • The vehicle must be first registered for VRT from 1 Jan 2009
  • The CO2 emissions level must be less than 156g/km and
  • The vehicle must be used for at least 60% business use for the first two years.

Where all of the above conditions are met 20% of the VAT on the purchase price can be reclaimed.

However, if the business use falls beneath the 60% in the first two years a portion of the VAT reclaimed will need to be repaid to Revenue.

What questions do you have?

We are happy to help. Please post your comment below or call Eamonn Madden, Tax Manager at Cooney Carey, on 01 677 9000. Alternatively, send him an email: emadden@cooneycarey.ie

To keep in touch, connect with us on LinkedIn.

If this article helped you, please share it with other businesses.

Posted on July 3, 2018 by Eamonn Madden

Taxation of Cryptocurrency Transactions

Background

With the growing number and use of cryptocurrencies (Bitcoin, Ethereum, Lightcoin, Ripple etc.) Revenue issued ac manual in May 2018, setting out the tax implications.

Business accepting cryptocurrencies

For business which accept payment for goods or services in cryptocurrencies there is no change to when revenue is recognised or how taxable profits are calculated. No special rules apply.

Income Tax

The profits and losses of a non-incorporated business on cryptocurrency transactions must be reflected in their accounts and will be taxable on normal income tax rules.

Corporation Tax

The profits and losses of a company entering into transactions involving cryptocurrency would be reflected in accounts and taxable under normal CT rules. As cryptocurrencies are not a functional currency (as defined), company accounts cannot be prepared in cryptocurrencies.

Capital Gains Tax

If a profit or loss on a currency contract is not within trading profits, it would normally be taxable as a chargeable gain or allowable loss for CGT purposes.

VAT

Cryptocurrencies are regarded for VAT purposes as “negotiable instruments” and exempt from VAT.

Financial services consisting of the exchange of bitcoins for traditional currency are generally exempt from VAT

Income received from cryptocurrency mining activities will generally be outside the scope of VAT.

VAT is due in the normal way from suppliers of any goods or services sold in exchange for bitcoin or other similar cryptocurrencies. The taxable amount for VAT purposes will be the Euro value of the cryptocurrency at the time of the supply.

PAYE treatment – salary paid in cryptocurrency

Where wages/salaries are paid using cryptocurrency, the value of the emolument for the purposes of calculating payroll taxes is the Euro amount attaching to the cryptocurrency at the payment date.

Valuation of Cryptocurrencies

The value of cryptocurrencies may vary as between different exchanges. Therefore there may be more than one exchange rate. A reasonable effort should be made to use an appropriate valuation for the transaction in question.

What questions do you have?

We are happy to help. Please post your comment below or contact Gerry Higgins, Tax Partner on 01 677 9000 or by email: ghiggins@cooneycarey.ie.

If this article helped you, please share it with other businesses.

Posted on June 26, 2018 by Gerry Higgins

Form 46G: When must the Form 46G be filed

Background

Revenue recently updated their manual on the Form 46G. The Form 46G is a return of certain payments (payments for services or copyright) made in the course of business which exceed €6,000 in aggregate in the period covered by the return.

Details required on Form 46G in relation to service provider

  • Full name
  • Address
  • Tax Reference
  • Payments/consideration given
  • Nature of consideration if not money
  • Nature of services/rights provided
  • Whether figures are VAT inclusive/exclusive

Payments not required to be returned on Form 46G

  • Payments aggregating to less then €6,000 in a return period
  • Payments from which income tax has been deducted
  • Payments by a principal contractor registered for Relevant Contracts Tax
  • Payments where goods exceeds 2/3 of the total charge
  • Payments to non-residents
  • Payments for essential services (electricity, gas and telephone)

When must the Form 46G be filed

For individuals and bodies of persons other than companies, a Form 46G is required in respect of payments up to 31 December each year or, if more convenient, up to the date of the accounts prepared for the business.

The Form 46G must be returned annually before 31 October following the relevant year.

For companies, a Form 46G (Company) must be returned not later than 9 months from the end of the accounting period.

Form 46G/Form 46G (Company) must be filed under Self Assessment provisions.

The Form 46G should be filed electronically using ROS.

Consequences of Non-filing Form 46G

A penalty of €3,000 can apply where no return is filed or an incorrect return is filed.

Tax clearance and repayments may be withheld.

It could lead to a Revenue Audit.

What questions do you have?

We are happy to help. Please post your comment below or contact Gerry Higgins, Tax Partner on 01 677 9000 or by email: ghiggins@cooneycarey.ie.

If this article helped you, please share it with other businesses.

Posted on June 14, 2018 by Gerry Higgins

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