Irish Company - Foreign Bank Acount - Why not?

Hi,

I've recently started a new company. I didn't want to open a business account with an Irish bank, since that would leave me with few prospects for raising money, working capital etc. Instead I opened an account with Unicredit Bank in Prague - very simple to do - all done in one day during a visit to Prague. They offer me all the usual business services at a reasonable cost.

The only trouble was when tried to register for VAT, I supplied my bank details to the Revenue Commissioners, for the purpose of VAT refunds. They got back to me saying that I had to have an Irish bank account. I asked them for proof - If my accountant is happy to do provide an audit with my main business account being in Prague, what is the problem? Why would I want to saddle my new company with a zombie bank?

Any thoughts on this would be gratefully received. Is the Revenue correct, or do they just want to make life easy for themselves? What is the law here?

There is nothing in the legislation, so the revenue are been awkard.
One way around this is giving your personal bank account and transferring the money

Tony
tony@kdaaccountants.ie
www.kdaaccountants.ie

Thanks Tony.

I was just speaking to the Revenue about this and they are now saying that they can't find the legislation stating that I have to have an Irish bank account. (!) They say however that they are not set up to process my request for a VAT number using a foreign account. I guess I'll give them my personal a/c here as you cleverly suggested.

By the way - they also told me that if I had any direct debits - these would also have to come from an Irish bank account. Do you know if that is the law, or are they making it up as they go along?! Maybe I can just ignore this and see what they do about it?

Serge

Serge

It's probably as simple as the system they use is limited. If i were you i'd stick to cheques as i'd be nervous they may lose your money.

Also, I note any payments through the ROS system must come from irish bank.

Tony
tony@kdaaccountants.ie
www.kdaaccountants.ie

KDA man said:

Serge

It's probably as simple as the system they use is limited. If i were you i'd stick to cheques as i'd be nervous they may lose your money.

Also, I note any payments through the ROS system must come from irish bank.

Tony
tony@kdaaccountants.ie
www.kdaaccountants.ie

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Cheques drawn on a foreign bank are not acceptable through the normal Irish banking system, they'll mostly only be processed by the banks on a collection only basis and could take a couple of weeks to clear and will probably incur higher charges

Tony,

It's looking like I will need an Irish business account - just to deal with the Revenue. I'll use my Prague account for all my business activities and build up a good credit history with them so that I can get working capital and apply for business loans in the future.

Thanks for your help,

Serge

Bear in mind as Mpsox said, if you use a €uro cheque drawn on a Czech bank to pay Irish suppliers/expenses, there will be both delays in processing and higher charges ( for the payee too which they might not be happy with ). The idea might be good in theory for lower bank charges but I would not be surprised if you encounter this difficulty from other parties also.

Graham_07 said:

... if you use a €uro cheque drawn on a Czech bank to pay Irish suppliers/expenses, there will be both delays in processing and higher charges ...

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Unless all the suppliers are CZ-based in which case serge is on a winner!

mathepac said:

Unless all the suppliers are CZ-based in which case serge is on a winner!

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True, the OP might let us know what the situation is.

Thanks for all of your comments. Cheques will clearly be an issue. Does anyone else have any experience of running a small business here with a bank based elsewhere in the EU? Am I being naive? My IT business will have a few large transactions (payment direct to CZ by electronic transfer), many more web based transactions - which can be easily dealt with through CZ, and just a few services here to pay for (broadband, rent, electricity...) + Revenue of course! Payroll I'm not sure about - either electronic transfer to employee a/c's here, or abroad...

Serge

Are you self-employed or a company?

If a company, incurr the expenses through your personal account and invoice them to your company, maybe?

You can then transfer the payment in from your company account.

Or perhaps you can set up a personal account at a different bank just for this purpose? (Write cheques, pay bills) if you want to keep a separate paper trail to your personal spending.

Hi yoganmahew.

I formed a Ltd. company. I think the problem with your suggestion is VAT refunds. I was unclear what the conclusion was, but I saw in a posting here a few days ago the question posed whether you can claim VAT refunds when the bill is not actually made out to the company? If that wasn't a problem, then what you suggest is what I would do. Very hard to beat the system! We are forced into not only bailing out our useless banks, but having to give them our continuing business. It's painful.

Serge