I can confirm that officials in my Department engage with Revenue on a wide range of issues on a regular basis. This includes the issue highlighted by the deputy.
As the Deputy will be aware, VAT is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply.
Irish VAT legislation, in compliance with EU VAT law, provides that taxable persons who are receiving services from outside the State, in the course of their business, are accountable and liable to pay VAT on the reverse charge basis in respect of those services. If the business receiving the services from abroad is normally VAT exempt, then it will be required to register for VAT in order that it can properly account for Irish VAT on the received services. In accordance with EU law, these arrangements apply to businesses across all sectors, including taxi drivers, who receive services from abroad, irrespective of their value. Ireland has no discretion in this regard.
Consequently, where a taxi platform is located outside the State and providing services to taxi drivers in the State, the reverse charge rules apply. This means the Irish taxi drivers who are customers of that taxi platform are obliged to self-account in the State for the VAT on the supply of the services they received. Often taxi drivers may not already be registered for VAT, because the provision of passenger road transport services is VAT exempt in Ireland; in such case, the taxi driver is required to register so that they can account for Irish VAT on the received services.
Revenue operates a self-assessment system for VAT and therefore the application of VAT on services is primarily a matter for the company or person who is accountable for the VAT. As part of its service to support taxpayer compliance, Revenue publishes extensive guidance in relation to VAT on services both on its website www.revenue.ie and in the form of various Tax and Duty Manuals. Revenue will also provide specific advice or guidance to taxpayers that seek VAT advice on services through contact with the relevant Revenue branch or through its Revenue Technical Service.
To further support compliance specifically in the taxi sector, last year Revenue published a detailed guidance document explaining how the VAT rules apply to taxi businesses specifically and how to comply with the requirements. This Tax and Duty Manual on the VAT Treatment relevant to Taxi drivers can be accessed on the Revenue website www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Services/vat-treatment-of-taxi-drivers.pdf.
The Deputy refers to the tax clearance required when applying for a Small Public Service Vehicle Licence from the National Transport Authority. Tax clearance is confirmation from Revenue that a taxpayer’s affairs are in order. If an individual’s tax affairs (or those of a connected party) are not in order, tax clearance may be refused or rescinded. Where tax clearance is rescinded, or an application for tax clearance is refused, the reasons for same will be outlined and these issues should be addressed before re-applying for tax clearance. Further information on tax clearance is available at www.revenue.ie/en/starting-a-business/tax-clearance/tax-clearance-under-review-refused-or-rescinded/application-refused.aspx .
In situations where a taxpayer is experiencing compliance and payment difficulties, Revenue’s preferred approach is always to work with the taxpayer to identify and agree mutually acceptable payment solutions where possible. Revenue has a proven track record of successfully working with individuals and businesses in agreeing flexible Phased Payment Arrangements to allow for the repayment of debt over a period of time. Revenue encourages taxpayers to engage early when compliance and payment difficulties arise and will work proactively with businesses experiencing temporary cash flow difficulties. If a taxpayer has any doubts in relation to their tax liabilities, they can contact their relevant Revenue branch. Further details on how to contact Revenue are available at www.revenue.ie/en/contact-us/index.aspx.
