12/05/2011 00:00:00
International delegates attending conferences in Ireland are to benefit from new value added tax (VAT) cuts announced by the Irish Government on 10 May 2011.
From 1 July, when a new lower VAT rate is introduced, lower hotel rates and golf green fees are two of the main benefits that will be enjoyed by business visitors to Ireland attending conferences and meetings or on incentive/concentive trips.
The current rate of VAT is 13.5%. A VAT rate of 9% will be introduced with effect from 1 July 2011 until end-December 2013.
The VAT reduction will be targeted mainly at those services relating to tourism. They include:
- catering and restaurant supplies, including vending machines and take-away food (excluding alcohol and soft drinks sold as part of the meal)
- hotel lettings, including guesthouses, caravan parks, camping sites etc
- cinemas, theatres, certain musical performances, museums, art gallery exhibitions
- fairgrounds or amusement park services
- facilities for taking part in sporting activities including green fees charged for golf and subscriptions charged by non-member-owned golf clubs
- printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books).
Conference and meeting planners involved in events already booked but taking place in Ireland after 1 July, may be able to benefit from the new lower rate.
How the new rates effect existing bookings and contracts
The Office of the Revenue Commissioners website explains: “In general, any advance payment, including a deposit, received by a trader before 1 July 2011 is subject to VAT at 13.5%. However, where the trader is obliged to issue a VAT invoice for that payment, and the invoice is issued after 30 June 2011, the new rate applies, namely 9%.”
Contracts with fixed interval payments where invoiced and due after 30 June 2011, should be treated as taxable at the 9% rate.
The Revenue FAQ goes on to say: Where a contract to supply goods or services is entered into before 1 July 2011, and the contract is not completed until after that date, the agreed VAT inclusive price may be subject to an appropriate adjustment due to the change in the VAT rate, unless there is agreement to the contrary between the contracting parties.