Revenue sends out VAT demands to overseas firms by mistake

Letters sent in error to traders abroad under new VAT/Moss system

One of the letters Revenue sent out by mistake.

One of the letters Revenue sent out by mistake.

 

Letters from the Collector General seeking VAT payments from about 2,000 foreign traders, some for multimillion euro amounts, were sent out by mistake earlier this month.

The letters included details of a Revenue bank account into which the money should be paid. No funds were paid as a result of the letters, a spokeswoman for the Revenue said. One of the digits in the international bank account number (Iban) given was incorrect, the result of a typo.

Traders in the UK posted images of the letters on Twitter and wondered whether the letters were the result of an error by the Irish tax authorities or an elaborate scam.

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

To avoid registering in multiple states, firms can sign up to a mini-one-stop-shop (Moss) in one state by way of a web portal.

Dutch ebook seller Gerben Wierda told The Irish Times he had received a letter 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 paid via the Dutch revenue services,” he said.

Technical error

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

A spokeswoman for the Revenue said it had identified about 2,000 customers who had received incorrect VAT/Moss compliance letters.

“Revenue is taking steps to update its systems to prevent recurrence. Revenue has identified the cases affected and will make contact with each of those customers. There is no financial impact and Revenue apologises for the inconvenience caused.”