A bus company has lost a €1million VAT claim after the Tax Appeals Commission ruled that the company’s services between the west of Ireland and Dublin Airport did not qualify for a tax exemption originally intended to cover the Promote modernization of the national bus fleet to benefit tourists.
Our operators that carry tourists who meet a number of conditions can apply for a VAT refund for the carriage of these passengers by road.
In early 2020, the Revenue Commissioners informed the bus company – a subsidiary of an international group – that it had rejected a €569,000 VAT refund application made for 2019.
The tax office then gave the bus company allocations for previous years totaling almost 480,000 euros.
The tax collector informed the company that the reason for refusing the refund and making the assessments for other tax years was that the company was not a “qualified person” within the meaning of the relevant tax legislation as it was not “engaged in the business of transportation”. to reward street tourists within the framework of group transport contracts”.
A witness for the license holder on the route added that the company carries a large number of tourists on the route to and from Dublin Airport, including inbound and outbound tourists as well as domestic tourists. She claimed that about 50 percent of passengers go to the airport and that the vast majority of them are tourists.
The operator’s lawyers told the Commission that the company meets all the elements required to obtain the relevant VAT exemption
A passenger analysis of the operator’s customers found that 50 percent were traveling to and from the airport, noting the operator’s legal counsel and insisting his client was entitled to say that 100 percent of those passengers, to the nearest percentage, are traveling for tourism purposes .
Counsel insisted that the international definitions of what a tourist is should be applied to the operator’s customers.
But the tax advisor claimed it was not appropriate to ask the Commission to establish a fact that a person is a tourist simply because they are on a bus to an airport.
“A person who travels to Spain on holiday will certainly be a tourist in Spain, but it was not clear that such a person was a tourist when he went to Dublin Airport by bus,” argued the lawyer.
However, the Tax Appeals Commission agreed that, based on data provided by the bus company for 2017, 2018 and 2019, it was satisfied that the majority of passengers using the buses to and from Dublin were traveling for tourist reasons.
However, the Commissioner responsible, Simon Noone, said he was nevertheless satisfied that this was not the main purpose from the complainant’s business perspective.
“Rather, he is satisfied that the complainant’s main business is the transportation of members of the public [on the route] due to a concession for public passenger bus services,” the decision says.
“It follows that he is satisfied that the defendant was entitled to refuse the applicant’s VAT refund claims,” it noted.
https://www.independent.ie/business/irish/coach-firm-cant-claim-reduced-rate-tourism-vat-41917016.html Bus companies cannot claim a reduced VAT rate for tourism