reclaim tax paid outside of Ireland

[Unregistered]

I have recently become self employed as an IT professional as of last January and on a recent trip to Poland, purchased a laptop and some other things which I need for my business. As these products were bought in the EU, but not in Ireland, can I use the receipts to offset my income tax payment for this year in the same way I could as if I had bought them in Ireland?

Thanks.

 

[extopia]

Sure you can. It doesn't matter where you buy the items. I assume you are registered for VAT so you can reclain the VAT you paid on the laptop etc.

 

[ubiquitous]

I assume you are registered for VAT so you can reclain the VAT you paid on the laptop etc.

Unfortunately you can't as under the Intra-EU VAT system there is no way of reclaiming VAT paid in another member state. There is a zero-rating system for cross-border b2b purchases but this is conditional on certain procedures including the recording of purchaser's VAT reg details by the vendor at the point of sale.

 

[Slash]

Unfortunately you can't as under the Intra-EU VAT system there is no way of reclaiming VAT paid in another member state.

I am no expert, but I think you can do an Eighth Directive reclaim for legitimate business expenses if you are registered for VAT in Ireland.

 

[ubiquitous]

This is very interesting

A google search yielded the following:

11. Recovery of VAT for EU and Non-EU traders

There is provision under the Eighth EU VAT Directive for business to recover VAT incurred in other EU Member States, which relates to their business activities. In order to reclaim VAT, Irish businesses must insist on receiving a VAT invoice addressed to the business and not to the employee incurring the cost. Claims for VAT incurred abroad must with few exceptions be submitted at the latest by the 30th June following the year in which the expense was incurred. Forms for claiming the VAT must be obtained from the relevant tax authorities. For Non-EU businesses VAT can also be recovered under similar provisions however some Member States will not refund VAT to non-EU businesses unless their country also has a VAT system and refunds VAT to their citizens.

[broken link removed]

Select Committee on Finance and the Public Service Thursday, 5 March 1998.

Mr. McCreevy: Worse still, from an Exchequer viewpoint, VAT chargeable in one member state to a business in another country may be claimed back by the customer. The basic rule governing these so-called eighth directive refunds is that, in this example, the customer is entitled to deduct the VAT charged. It is governed by the deductibility rule in the supplier's country. Our curbs on deductibility could be circumvented, with resultant distortion in trade, loss of business to Irish car lessors and loss of revenue to the Exchequer...

Mr. McCreevy: This does not apply to tourists but the Deputy's summations are otherwise correct. In the case in question people in Belgium leased cars from the Netherlands. The deductibility rule under the eighth directive is that the VAT charged on a foreign import is allowed. Most countries, including Ireland, do not allow the VAT charged on car leasing to be reclaimed. However, the European Court of Justice decision allowed that.

If that were to be extended it would mean that Irish companies, rather than leasing cars in Ireland, would lease them from the Netherlands, for example, where deductibility is allowed. Apart from causing a loss of business to Irish car leasing companies, there would also be a loss to the Exchequer because the company would be entitled to claim back the VAT against sales under the ARO judgment. Therefore, there would be a double loss. In addition, we would also have to pay £75 million or £80 million in VAT because under the eighth directive the business person would be allowed to reclaim the VAT on those sales against his VAT.