Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I move amendment No. 8:

In page 38, between lines 13 and 14, to insert the following: “Amendment of section 2 of Act of 2010

61.Section 2 of the Act of 2010 is amended—

(a) in subsection (1), in the definition of “Community”, by the insertion of “, subject to subsection (4A),” before “has the same meaning”,

(b) in subsection (4), by the insertion of “, subject to subsection (4A),” before “references to Member States”, and

(c) by the insertion of the following subsection after subsection (4):

“(4A) In this Act, each reference to—

(a) Community, and

(b) Member State, shall apply as if the reference included a reference to Northern Ireland, save—

(i) where the reference occurs in a provision specified in Part 1 of Schedule 9, and

(ii) in the case of a provision specified in Part 2 of Schedule 9, in so far as the provision applies to services.”.”.

Amendments Nos. 8 and 12 relate to value added tax. The changes proposed in amendment No. 8 are designed to ensure that our primary legislation on VAT is consistent with the protocol by including Northern Ireland in the definition of member states and the European Union where those references relate to transactions in goods but not with regard to transactions in services. This means the definition of "Member State" and "Community" in a VAT context will differ depending on the nature of the transaction under consideration.

Section 2 is amended to ensure transactions involving Northern Ireland are defined correctly having regard to the Northern Ireland protocol. It inserts a new section 4A which specifies sections of the Act that are included or excluded from the application of the revised meaning of "Member State" and "Community" in the amendments section, depending upon the type of transaction.

Amendment No. 12 inserts a new schedule to the Value-Added Tax Consolidation Act 2010. The amendment to the definitions of "Member State" and "Community" will ensure Northern Ireland will be considered after the transaction period to be within the community and a member state with regard to goods from outside the community and not a member state with regards to services. This correctly reflects the treatment contemplated by the Northern Ireland protocol. As a result, the treatment of taxable transactions involving Northern Ireland is not universal but differs according to the type of supply is at issue and whether it relates to goods or services. Provisions governing goods must deem Northern Ireland to be part of the Community and a member state while provisions relating to services of the same Act must deem Northern Ireland not to be part of the Community or a member state in accordance with the Ireland and Northern Ireland protocol.

Schedule 9 consists of two Parts. Part 1 sets out the provisions in the Act to refer to services and disapplies the definition of "Member State" and "Community" to Northern Ireland. Part 2 deals with the provisions of the Act that reference transactions in both goods and services. This presents a complication as the Northern Ireland protocol requires that Northern Ireland is seen to be within the Community for the purposes of goods but outside the Community for the purposes of services. This is addressed by the section by disapplying the definition of "Member State" and "Community" to Northern Ireland only in respect of services.

Members can see that under the agreement, there is a different treatment relating to goods and services. We include Northern Ireland as part of the "Community" or a "Member State" in respect of one but differently in respect of the other, depending on the nature of the transaction.

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