Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

This section administers the VAT Consolidation Tax Act in sections 15 and 115 in relation to VAT groups. For administrative convenience where a number of persons, including at least one taxable person, are established in the State and are closely bound by financial, economic and organisational links, Revenue may deem them to be a single taxable person referred to as a group.

Under these arrangements one person or company in the group is responsible for complying with the group's VAT requirements such as lodging returns and payments with Revenue, but each member of the group is jointly and separately liable in the event of non-compliance. The legislation is amended to require that the Revenue Commissioners are notified of a significant change in the organisational links between the persons in a VAT group and to apply a penalty for each taxable period in which Revenue was not notified of that change. The existing legislation does not require that Revenue is informed of any change to the VAT group such as a group person ceasing to trade, although this normally happens in practice in line with published guidance. However, there have been occasions when Revenue has been notified of significant changes to a group's structure and this has led to legal and administrative difficulties as well as a potential loss of revenue. This amendment has been made to put the administrative requirement to notify Revenue on a legislative footing and to apply a penalty where this is not done.

In summary, this refers to where there are changes in the nature of a group and when Revenue is dealing with issues on how the VAT law should be applied to a group that has changed. Revenue has dealt with this on an administrative basis up to this point and now we are looking to put it on a legislative footing.