# Taxi Hire - VAT Exempt?



## jokerini (14 Feb 2013)

A sole trader purchased taxis and taxi plates. He then hires the cars/plates out to taxi drivers for €200 per week.

Is this activity subject to VAT? I believe the rental of vehicle is subject to VAT. However, the hire of taxi plates is VAT exempt. Which category does this fall into?


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## Joe_90 (16 Feb 2013)

I think you have two supplies one VATable the other not.  What's the basis of €200 per week charge? This may dictate how much relates to each supply.

If your turnover of taxable supplies is less than the registration threshold then you don't need to register.

The operator will be exempt so will not be able to recover VAT.

Perhaps other contributors have a view.


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## smeharg (16 Feb 2013)

Joe_90 said:


> I think you have two supplies one VATable the other not. What's the basis of €200 per week charge? This may dictate how much relates to each supply.
> 
> If your turnover of taxable supplies is less than the registration threshold then you don't need to register.
> 
> ...


 
Agreed.

It's a mixed supply so the charge will need to be split between plate hire and car hire.  

Inputs (VAT on purchases) will need to apportioned between those attributable to the exempt supply and those attributable to the taxable supply.  Obviously there's no reclaim on the portion attributable to the exempt part of the supply.

Also watch out for rate change between short term hire and long term hire.


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## jokerini (11 Apr 2013)

Thanks for the replies. If the vehicle is eventually sold, does VAT have to be apportioned to the sale in the same proportion (part exempt/part taxable)?


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## britvic55 (11 Apr 2013)

the rental of the Taxi as a package ie ..car  plate   meter  printer  sign insurance, to another individual is under the new taxi regulation bill  subject to Tax  not vat. the licensed owner of the vehicle must now declare if renting/ leasing his vehicle to another individual all relevant details of who the rentee/ leasee  is and the amount involved and period of rental / lease involved. both are then liable ti Tax on income at source,  much the same scenario now also applies if a plate license holder is renting / leasing his plate only to a company or individual.  details of all such information can be had at NTA/taxi.ie


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## britvic55 (11 Apr 2013)

also might I add for the benefit of anyone requiring information on all aspects of the Taxi Industry,  if in doubt...check it out...go to the NTA  taxi.ie  website (national transport authority) where contacts details are available to answer any Query one may have regarding rules regulations of the SPSV industry for both service providers,  and  consumers.


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