Indirect Tax News - May 2020

COVID-19 VAT measures in Ireland

The Irish Tax Authorities have introduced several new (and temporary) VAT measures in response to the COVID-19 global pandemic. The first measure to be implemented related to the non-payment of VAT liabilities for the period covering 1 January to 29 February 2020, which was due for submission and payment on 23 March.

As Ireland increased its lockdown measures around this time, more businesses were required to close and so the tax authorities advised that they would not seek to impose interest on late payment where small-to-medium enterprises (SMEs) were not in a position to discharge some or all of their VAT liability for the period. This should be strictly applied to situations where the inability to pay arose from the impact of COVID-19 pandemic. These measures have now been extended to cover the VAT period 1 March to 30 April 2020, which will be due for submission and payment in May. This has been a welcome relief to many Irish businesses, however the measure only applies to SMEs and taxpayers must still submit the associated VAT Return.

The tax authorities in Ireland have also reduced the rate of VAT on the supply of personal protection and specified medical equipment when supplied to the HSE (Ireland’s health service), hospitals, nursing homes, and other healthcare facilities for use in the delivery of COVID-19 related health care services to their patients. The rate of VAT for such supplies will be reduced to zero on a temporary basis from 9 April 2020 to 31 July 2020.

Caoimhe McKeon