Alarm over ‘bogus’ VAT demands on businesses

Businesses outside Ireland have received demands purporting to be from the Irish Collector General seeking payments under new EU VAT rules on customers who buy goods over the internet.

The letters, purporting to be from Michael Gladney’s office in Limerick, seek “VAT Moss” payments to a particular account and give the interest rate that will apply to late payments.

However, the banking details given, for a purported account with the Bank of Ireland, College Green, Dublin, do not produce the international bank account number, or Iban, stipulated, when put into the bank’s online Iban calculator. There is a one-digit difference between the Iban produced and the one in the letters.

New system

A spokeswoman for the Revenue was not in a position to comment but said it would look into the matter. The letters have been sent to people registered under the new VAT Moss system in the UK, the Netherlands and possibly the United States.

Under new EU rules, the “place of supply” of telecommunications, broadcasting and e-services to non-taxable persons is the place where the customer usually resides. Taxable businesses which make such supplies are obliged to register, charge and account for VAT in the member state of the customer.

In order to avoid having to register in multiple states, businesses can sign up to a mini-one-stop-shop (Moss) in one state, by way of a web-portal.

Apparent demand

Dutch ebook seller

Gerben Wierda

said he had received an apparent demand looking for €3 million for the first quarter of this year.

“I sell ebooks and, during the January to March 2015 period, I sold [product worth] €54 in Ireland, for which I have to pay €12 Irish VAT, which I have paid via the Dutch revenue services,” he said.

The letter he received had his VAT number and appeared genuine, he said.

A British business called Astute Music said in a post on Twitter it had paid its VAT/Moss bill on time, including £11 (€15) to the Irish Revenue, but had now received a letter seeking €2,356,978.46.

It posted a picture of the envelope in which the demand arrived, which appears to be from the Collector General’s office and has a “Postas Íochta” stamp on it.