Tax Appeals Commission determination 40TACD2023 regarding Value Added Tax, 2023

Administrative Decision Number40TACD2023
Date05 January 2023
Subject MatterValue Added Tax
1. This is an appeal to the Tax Appeals Commission (“the Commission”) by
(“the Appellant”) pursuant to section 119 of the Value Added Tax
Consolidation Act 2010 (“VATCA 2010”) against an assessment raised by the Revenue
Commissioners (“the Respondent”) to Value-Added Tax (“VAT”) in the amount of €593,979
for the period of 1 September 2017 31 December 2017.
2. The assessment was raised on foot of the cancellation of the Appellant’s waiver of
exemption from VAT, pursuant to section 96 of the VATCA 2010. The net question to be
determined in this appeal is whether the requirement on the Appellant to pay the
cancellation sum is incompatible with the principle in EU law of fiscal neutrality.
3. The appeal proceeded by way of a hearing on 17 November 2022.
4. On 22 October 2020, the Respondent raised an assessment to VAT against the Appellant
in the sum of €593,979. The assessment arose on foot of the sale of a property,
(“the property”), which completed on 12 September 2017.
5. On 20 November 2020, the Appellant appealed the assessment to the Commission.
6. In earlier submissions, the Appellant argued inter alia that no charge properly arose
pursuant to section 96 of the VATCA 2010. Subsequently, but prior to the hearing herein,
the Appellant withdrew this argument and accepted that, as a matter of domestic law, a
liability to tax arose. Therefore, the sole question under consideration at the hearing was
whether the domestic provision imposing the liability breaches EU law.
7. Directive 77/388/EC (“the Sixth VAT Directive”) stated inter alia that
Article 13
Exemptions within the territory of the country
B. Other exemptions
Without prejudice to other Community provisions, Member States shall exempt the
following under conditions which they shall lay down for the purpose of ensuring the
correct and straightforward application of the exemptions and of preventing any
possible evasion, avoidance or abuse
(b) the leasing or letting of immovable property
C. Options
Member States may allow taxpayers a right of option for taxation in cases of: (a) letting
and leasing of immovable property
Member States may restrict the scope of this right of option and shall fix the details of
its use.
Article 17
1. The right to deduct shall arise at the time when the deductible tax becomes

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