Ryanair Limited -v- Revenue Commissioners, [2017] IESC 19 (2017)

Docket Number:290/2013
Party Name:Ryanair Limited, Revenue Commissioners


[Appeal No: 290/2013]

Clarke J.

MacMenamin J.

Dunne J.


Ryanair Limited



The Revenue CommissionersRespondents

Judgment of Mr. Justice Clarke delivered the 27


March, 2017.

  1. Introduction

    1.1 The basic model of Value Added Tax is relatively straightforward. Persons or entities which carry out taxable activity charge VAT to those to whom they sell goods or provide services and pay VAT to those from whom they acquire inputs to their business again either in the form of goods or services. The taxpayer remits the difference to the Collector General. But as with many cases there can be grey areas around the precise application of VAT legislation to the circumstances of a particular case. Furthermore, VAT was introduced as a common form of tax across the now European Union. VAT legislation in member states of the European Union is, therefore, heavily influenced by European legislation and is, in turn, therefore, significantly influenced by the jurisprudence of the Court of Justice of the European Union (“CJEU”).

    1.2 All of those factors come into play on this appeal. It is a matter of wide public knowledge that the appellant (“Ryanair”) sought to take over Aer Lingus on a number of occasions but, of particular relevance to this case, one such attempt occurred in late 2006 when a formal bid to acquire the shares of Aer Lingus was made. Hardly surprisingly Ryanair engaged professionals to assist it in that bid and incurred liability to pay the professionals concerned. Those professionals were, in turn, required to charge VAT on their fees for they were, undoubtedly, engaged in providing a vatable service. The net question which arises on this appeal is as to whether Ryanair is entitled to claim the VAT thus paid as an input deduction.

    1.3 In the ordinary way the matter first came before the appeal commissioners who found in favour of the respondents (“Revenue”) and determined that Ryanair was not entitled to the deduction claimed. Ryanair appealed to the Circuit Court. In the end, Her Honour Judge Linnane stated a case for the opinion of the High Court on the 17th February, 2012. Her Honour Judge Linnane had concluded, in agreement with the appeals commissioners, that Ryanair was not entitled to the claimed deduction. However, she posed, for the High Court, the straightforward question of whether she was correct in law in reaching that conclusion on the basis of the facts found by her as set out in the case stated.

    1.4 The case stated was heard by the High Court (Laffoy J.) with judgment being delivered on the 2nd May, 2013 (Ryanair Ltd v. Revenue Commissioners [2013] IEHC 195). Laffoy J., agreeing with both the appeal commissioners and Her Honour Judge Linnane, concluded that Ryanair was not entitled to the claimed deduction. Ryanair has appealed to this Court against that finding. I have concluded that it is necessary, for the purposes of determining this appeal, that certain...

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