Company loses battle with Cab over €2.2m VAT bill

A company has lost its tax battle with the Criminal Assets Bureau (CAB) concerning a disputed €2.2 million VAT bill.

This follows the Tax Appeals Commission (TAC) finding that the company was liable for the VAT amounts from 2015 to 2018 after it could provide no documentary evidence that the goods in question were shipped from here to Northern Ireland. Companies are not named in tax appeals documents for confidentiality reasons.

The 21-page TAC ruling by commissioner Claire Millrine on the failed appeal by the firm against the CAB VAT assessment of €2.2 million discloses that it came to CAB’s attention that the managing director of the firm was disqualified as a director for five years up to June 3rd, 2019.

The VAT liability arose when the tax authorities here withdrew the provision of a zero rate of VAT enjoyed by the appellant firm on its sales to the UK on the basis that it could provide no documentary evidence that the goods were removed from here and transported to the UK.

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Before the TAC, the firm stated that in the majority of cases where the firm’s goods were sold to UK registered companies, the un-named goods were delivered personally by the company MD and on that basis the paperwork on the shipping of the goods would be non-existent.

The firm argued that this was simply the way the business was run.

It stated that it was more cost effective for the firm to operate that way rather than engage a shipping agent as it cost about €50 for each item to be personally delivered by the MD whereas using a transporter to deliver the goods would cost €150 per item and there was 100 delivered in this manner by the MD.

The firm argued that Revenue’s €2.2 million cumulative assessment was not based on the books and records of the company and did not correctly or accurately reflect the company’s trading transactions.

Counsel for CAB argued at the TAC hearing that the appeal must fail on the basis that no documentary evidence has been adduced that the goods were removed from the State and dispatched to another member state.

In her findings, Ms Millrine found that the VAT assessments from 2015 to 2018 totalling €2.2 million should stand and the annual assessments included €547,615 for 2015, €1.13 million for 2016 and €434,425 for 2017.

Documentation lodged by the firm show that in the 2015 to 2018 period, it had sales to EU countries totalling €16.3 million and value of imports from EU countries totalled €15.92 million.