All VAT returns must be made online to ROS and must be submitted every two months starting in January.
When you make this return you must pay the amount owed for January and February, together with the estimated amount you will owe for March and April. From this amount you can reclaim VAT paid on imputs (see below). If you already do this, then don’t forget to deduct advance payments for Jan/Feb made in December.
1. Package holiday
If an agent buys a package holiday from an Irish based tour operator originating in Ireland — regardless of the destination — there is a VAT liability. The tour operator will show commission and VAT on the confirmation invoice. The agent remits this VAT to Revenue. The tour operator will reclaim this VAT from Revenue, so it is very important to get the figures right. Flight-onlies on charter flights are the same as above.
2. Schedule flights
There is no VAT on schedule flights regardless of origin or destination, whether they are booked by Internet and paid by credit card; booked on GDS and issued on BSP or purchased from a consolidator.
3. Service charges
There is no VAT on travel insurance. There is no VAT on service charges except for business house clients (see below).
This is a more complicated area. It all depends on who you buy it from and where they travel to. Irish based suppliers who pay commission, and clients travelling to EU destinations: VAT is payable.
Irish based suppliers, who pay commission, and client travelling to NON EU destination: — no VAT is payable.
NON-Irish registered suppliers but who are based in the EU, e.g. — RCCL, MSC, Travel Cube and Holiday Autos etc., to list but a few: — NO VAT payable regardless of destination. You must do a VIES report on these. VIES is VAT Information Exchange System. You must issue a self billing invoice to these suppliers, listing booking reference numbers, client names and commission amounts. These suppliers must account to their own revenue authorities for VAT. This return is every three months so it coinsides with VAT in June and December.
NON Irish registered suppliers, but based outside the EU: — no VAT payable and there is no requirement to file VIES.
5. Bonus commission
If you receive bonus commission or overrides these will have a VAT element and they must be remitted to revenue, remembering that the tour operator can reclaim this VAT. This sounds complicated but in reality is it not really. It is always the exceptions that can be difficult. For example: a booking to Palma; one client for 7 nights booked with Falcon VAT on seat only. Client being joined by friend booked with Ryanair — NO VAT. One single room booked with Bookabed —VAT payable. Another booked with Travel Cube — NO VAT( but VIES). So for different components there are different rules.
6. Business house
If you have business house clients, who are registered for VAT, and you charge a service charge you must charge 23 % VAT on the service charge and remit this to Revenue but your client can reclaim this VAT.
7. Vat on imputs
There is VAT payable on audit fees, telephone bills, light and heating bills, stationery, printing, subscriptions and licences and numerous other imputs. You can claim this VAT back in the two month period in which they are incurred when you make your return.
Top tips as recommended by Peter Dolan, Creation Travel