Quarterly indirect tax update - December 2021

Jarlath O'Keefe
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Finance Bill 2021 introduced limited changes in relation to Indirect Taxes.

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Finance Bill 2021

Finance Bill 2021 introduced limited changes in relation to Indirect Taxes. The notable changes within the Finance Bill include:


A legislative amendment introduced by Finance Bill 2021 has provided that where a deposit has been received and the service in which the deposits has been paid towards has been cancelled, then the recipient of that deposit can no longer issue a credit note to render the VATable amount received as being nil. This amendment was made in line with a European Court of Justice ruling which held that cancellation fees are subject to VAT as they constitute a payment for either a service or a right to access a service.

COVID-19 amendments

A new provision was introduced and provided that no VAT will be payable on the importation of goods and services by or to the EU commission or similar EU bodies in order to combat COVID-19. The extension of the zero rate of VAT which applies to the supply of COVID-19 vaccinations and related in vitro diagnostic medical devices was extended to 31 December 2022.

VAT groups

Following Finance Bill 2021, at least one member of a VAT group must be an accountable person for VAT. The Bill also introduced obligations to inform Revenue if the conditions for a VAT group are no longer met. Should the VAT group not inform Revenue of these changes, they may face penalties for each taxable period in which they fail to notify Revenue.