From 1st May 2012, a supply of construction services in the state by an accountable person to a connected person is subject to a reverse charge. This places the onus on the recipient of construction services from a connected person,rather than the supplier, to account for and pay the Vat.

This follows on from rules introduced in September 2008 when the reverse charge was brought in for construction services provided by subcontractors to principal contractors.

 A connected person is determined in accordance with section 97(3) of the Value-Added Tax Consolidation Act 2010.

 The supplier normally issues the invoice but, if both parties agree, the recipient can issue the invoice and give a copy to the supplier.

The invoice must contain the statement “Vat on this supply to be accounted for by the recipient” . The Vat rate and amount must not be shown but all the other information that is normally on a valid Vat invoice must be included.

The recipient must include the Vat due on supplies from the supplier with Vat on Sales under T1. If they are entitled to claim the corresponding Vat on Purchase they may do so in Box T2 Vat on purchases.

 Professional advice should be sought before relying on the above outline