Registration to Irish VAT denied

robnet77

Hello,
does anybody know good solicitors who are very familiar with matters related to online businesses?

My friend had his company rejected from VAT registration in Ireland and he would like to challenge the decision, but as the Revenue did not mention any reasons for the rejection, he would like to build a case to show his request should be accepted.
So far, he has been followed by some solicitors in Cork, but he is willing to change if he finds someone who can help.

I don't wish to discuss the situation here, please just advise if you know some solicitors who know these matters very well.

Thanks!

pedronomix

I assume they were denied as they/the business is not domiciled in Ireland or he has " previous"!! Elicuidate!

robnet77

pedronomix wrote: »

I assume they were denied as they/the business is not domiciled in Ireland or he has " previous"!! Elicuidate!

no "previous" whatsoever, the first guess applies partially, apparently.

m1ck007

You need to see an accountant. They are usually well versed in VAT matters.

JMR

Where is the company registered?, presumably not Ireland or there wouldn't be an issue registering for VAT.
A bit more info is needed to comment intelligently.

pedroeibar1

I'd put my money on the other Pedro's comment (even if I do not agree with his spelling!)

pedronomix

Is this a guessing game or a spelling bee?

pedronomix

All the larger firms will have solicitors versed in such matters McCanns, Goodbody, Frys etc but the detail of this area is generally the preserve of the larger accountancy practices KPMG, PWC etc etc. They will hand case on to the other lawyers if proceedings are justified. Think minimum 6 figures for fees!!

Into The Blue

robnet77 wrote: »

the Revenue did not mention any reasons for the rejection

Get on to revenue and ask!

robnet77 wrote: »

the first guess applies partially, apparently.

How do you know this?

elastico

Is it a company registered in Ireland?

I am pretty sure you need to setup as a limited company in Ireland and then register for VAT.

Mr. G

elastico wrote: »

Is it a company registered in Ireland?

I am pretty sure you need to setup as a limited company in Ireland and then register for VAT.

Not necessarily a limited company but you may need to register with the CRO. You can register a business name as a sole trader

dbran

Hi Robnet

It does not matter where you register your company, business name in CRO etc.

In order to register for VAT in Ireland you must be carrying on a business in the state. The issue here is whether or not the business itself is actually run from Ireland. An online business by its nature can be run from anywhere in the world and the mere fact that it is an Irish company that runs it is not relevant. That would be the reason why VAT registration is usually refused.


dbran

robnet77

dbran wrote: »

Hi Robnet

It does not matter where you register your company, business name in CRO etc.

In order to register for VAT in Ireland you must be carrying on a business in the state. The issue here is whether or not the business itself is actually run from Ireland. An online business by its nature can be run from anywhere in the world and the mere fact that it is an Irish company that runs it is not relevant. That would be the reason why VAT registration is usually refused.


dbran

Thanks to everyone for your replies.

thanks dbran, my friend set up a limited company in Ireland with a partner a few months ago, they are both based abroad.

As the services they are using are mostly run from Ireland, and they have an employee who does most of the work for them and he is based in Ireland, they applied for Irish VAT as they could not continue to operate without doing that (as they exceeded the maximum income threshold).

I mistakenly mentioned solicitors but they are actually being helped by an accountancy firm in Ireland, who just applied to the Revenue, waited to see their queries and provided the answers, however they don't seem to be competent enough in online services and were too passive in the approach in my friend's opinion.
Building up a case with explanation of relevant points would have helped, probably.

Revenue did not provide a reason for the rejection, however I would guess it's because both directors live abroad, although there have been no major company decisions or meetings held anywhere since the company was created.

So would a large accountancy firm be the only option? Maybe there are some specialised in this sector? thanks.

pedronomix

Revenue are generally extremely helpful and sometimes it is better for the taxpayer to get on to them and simply ask for guidance, advice and even help!! You might be surprised and save a lot of grief and money.

pedroeibar1

pedronomix wrote: »

Revenue are generally extremely helpful and sometimes it is better for the taxpayer to get on to them and simply ask for guidance, advice and even help!! You might be surprised and save a lot of grief and money.

Agreed. In light of the more informative post by the OP earlier this morning, I wonder if it has anything to do with Section 43?? ( as both directors are resident abroad, I wonder has one of them posted the required bond??????)

robnet77

pedronomix wrote: »

Revenue are generally extremely helpful and sometimes it is better for the taxpayer to get on to them and simply ask for guidance, advice and even help!! You might be surprised and save a lot of grief and money.

well they weren't!

I just spoke to the person within the Revenue, who visited the business premises some time ago and asked the relevant questions.

He said they cannot advise in any way and they are unable to provide further details other those already mentioned in the letter (which does not say anything else other than they are not satisfied that the business is operating from Ireland).

My friend can appeal the decision, but again he would need to find someone who is very familiar with these matters.

pedronomix

Well perhaps that one was not, but get back on to the local VAT office and ask to speak to the Customer Services Manager. They are obliged to give specific reasons and outline required compliance items.

Nuttzz

Why dont they apply for VAT registration in the country they operate from?

pedroeibar1

robnet77 wrote: »

well they weren't!

I just spoke to the person within the Revenue, who visited the business premises some time ago and asked the relevant questions.

He said they cannot advise in any way and they are unable to provide further details other those already mentioned in the letter ......

Of course they will not discuss it with you over the phone! Why should they when it is none of your business, as it relates to a company owned by your friends? IMO there is a lot more to this than meets the eye - you are moaning on without giving full info.

Accountants deal with Revenue almost daily and need to have a good working relationship with them. I don't swallow the tale that 'they don't seem to be competent enough in online services' I'm no supporter of Revenue, I agree that one can find an occasional s#1t there (as anywhere) but in general I've found they play strictly by the rules.

robnet77

pedroeibar1 wrote: »

Of course they will not discuss it with you over the phone! Why should they when it is none of your business, as it relates to a company owned by your friends? IMO there is a lot more to this than meets the eye - you are moaning on without giving full info.

Accountants deal with Revenue almost daily and need to have a good working relationship with them. I don't swallow the tale that 'they don't seem to be competent enough in online services' I'm no supporter of Revenue, I agree that one can find an occasional s#1t there (as anywhere) but in general I've found they play strictly by the rules.

they did not say my friend could ask for more info, they said he could appeal if he wanted to.
I am not giving full info here for the reason I mentioned at the very beginning, my friend just needs to find competent accountants who can build up a case to explain in detail how the business operates, which may have not been done well enough by his chosen accountants so far.

I am not saying the Revenue should have granted VAT registration, I am just saying they may not have received all relevant information to take an informed decision.

robnet77

Nuttzz wrote: »

Why dont they apply for VAT registration in the country they operate from?

because they are operating from Ireland, where their employee who they say does most of the work is based, where most clients and vendors are based, etc.

pedronomix

Any accountant who is a registered auditor can do this, no rocket science involved. perversely when you deal with a smaller firm, you tend to get looked after by a very experienced accountant. In the big firms, SMEs are handled by juniors!!

robnet77

pedronomix wrote: »

Any accountant who is a registered auditor can do this, no rocket science involved. perversely when you deal with a smaller firm, you tend to get looked after by a very experienced accountant. In the big firms, SMEs are handled by juniors!!

although I generally agree on the above, it is not so straightforward to represent how an online business operates and from where, examples are dealing with multiple clients/vendors from many countries, availing of servers based abroad, employing people whose activities can qualify to a different extent to the "business operations", and I could go ahead for hours if I knew this matter in more depth than I do.

pedronomix

If the business is established here, invoices from here ( no matter where they sell), has employees here, has a bank account here, generates expenses here (no matter where they buy from), they have a centre of interest here and are thus entitled to tax registration here. It is as if some important factor is not being disclosed or someone is rather clueless!

dbran

Yep. You are not telling all of the facts.

It looks like you have a case and similar situations have resulted in VAT registration being granted in Ireland.

The fact that the revenue have done their investigation, visited your premises (was it a virtual office by any chance?) and concluded that you were not carrying on a business in Ireland makes no sense.

Unless possibly they concluded that the employee was not a bonifide employee receiving just a token payment and the work was not in fact being done here.

dbran

pedroeibar1

dbran wrote: »

Yep. You are not telling all of the facts.

It looks like you have a case and similar situations have resulted in VAT registration being granted in Ireland.

The fact that the revenue have done their investigation, visited your premises (was it a virtual office by any chance?) and concluded that you were not carrying on a business in Ireland makes no sense.

Unless possibly they concluded that the employee was not a bonifide employee receiving just a token payment and the work was not in fact being done here.

dbran

Nope, they are "his friend's" premises. Opening question was to provide the name of solicitors to take on Revenue. We now have got as far as an admission a few posts back that there has not even been an appeal yet.

Anyone who starts talking about getting solicitors involved with Revenue before an appeal process has (a) no clue or (b) a very big chequebook or (c) both.
My original comment on the fact that both directors were non-resident was ignored. I wonder if one of them has posted the required bond of €25k or whatever it is nowadays?

Do we have an ODCE?

dbran

No one does that in reality. They usually pay an insurance company about 2k who will cover the cost of the bond for 2 years.

The revenues main concern would be recoverability of any tax liability and potential vat fraud if the undertaking is controlled outside the jurisdiction so yes the fact the directors are non resident is very relevant.

Dbran

robnet77

pedroeibar1 wrote: »

Nope, they are "his friend's" premises. Opening question was to provide the name of solicitors to take on Revenue. We now have got as far as an admission a few posts back that there has not even been an appeal yet.

Anyone who starts talking about getting solicitors involved with Revenue before an appeal process has (a) no clue or (b) a very big chequebook or (c) both.
My original comment on the fact that both directors were non-resident was ignored. I wonder if one of them has posted the required bond of €25k or whatever it is nowadays?

Do we have an ODCE?

I already mentioned I mistakenly said "solicitors" while I wanted to say "accountants", to replace the existing accountants in order to make the appeal. Please ignore any reference to solicitors.

Their employee has lived in my premises for some time now and he is the one doing most of the work, but apparently that was not taken into account or was not considered enough.

I don't think they paid any bond, nor were they asked to do so by their accountants, but I'll check with them.

Thanks.

dbran

The bond only applies if the directors are resident outside the eu.