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Eircom still overcharging VAT on installs

  • 02-09-2004 10:41am
    #1
    Capt'n Midnight
    Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 93,604 Mod ✭✭✭✭


    http://www.boards.ie/vbulletin/newthread.php?do=newthread&f=60
    At issue is whether the installation of a new line is considered a product, requiring telecoms to add VAT at 21 percent, or a service, which comes with the much smaller 13.5 percent VAT rate. In December 2003, in a landmark ruling, the Supreme Court ended a dispute between cable firm NTL and the Revenue Commissioners, siding with NTL and ruling that the lower VAT rate should be charged for new cable connections.

    Though that dispute took almost 15 years to settle, it was expected that the VAT charged for new telecoms hook-ups by the likes of Eircom and Esat BT would fall following the court's decision. As yet, no change has occurred, and while both telecoms claim to now be looking into the matter, they say they have received no notification to cut VAT rates.
    So in another 15 years time...
    How long can they hold on the 7.5% before they have to pass it on the the revenue and how much interest would they make ?


Comments

  • #2
    Ripwave
    Closed Accounts Posts: 2,188 ✭✭✭Ripwave


    Capt'n Midnight wrote:
    http://www.boards.ie/vbulletin/newthread.php?do=newthread&f=60

    So in another 15 years time...
    How long can they hold on the 7.5% before they have to pass it on the the revenue and how much interest would they make ?
    They're passing the whole 21% on to the Revenue.

    They're charging the VAT rate that the Revenue told them to charge. If you've got an argument in this case, it's an arguement with the Revenue, not with Eircom, ESAT, etc.


  • #3
    Cuauhtemoc
    Registered Users, Registered Users 2 Posts: 462 ✭✭Cuauhtemoc


    They're charging the VAT rate that the Revenue told them to charge. If you've got an argument in this case, it's an arguement with the Revenue, not with Eircom, ESAT, etc.

    Why though?
    The revenue lost the supreme court case with NTL.
    They can't be in a position to demand the 21% following that result.
    The VAT should be refunded to all people who have paid the higher rate.


  • #4
    Capt'n Midnight
    Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 93,604 Mod ✭✭✭✭Capt'n Midnight


    Ripwave wrote:
    They're passing the whole 21% on to the Revenue.

    They're charging the VAT rate that the Revenue told them to charge. If you've got an argument in this case, it's an arguement with the Revenue, not with Eircom, ESAT, etc.
    You pay Eircom, they use pay the Revenue later + keep interest
    If the revenue do refund the 7.5% will they also include interest earned ?


  • #5
    Ripwave
    Closed Accounts Posts: 2,188 ✭✭✭Ripwave


    Capt'n Midnight wrote:
    You pay Eircom, they use pay the Revenue later + keep interest
    If the revenue do refund the 7.5% will they also include interest earned ?
    Get real! The interest involved would be less than a penny per user. (You do know what interest will earn you these days, don't you?)

    Do you honestly think they wouldn't drop their prices by €7 in exchange for a penny?


  • #6
    Ripwave
    Closed Accounts Posts: 2,188 ✭✭✭Ripwave


    Cuauhtemoc wrote:
    Why though?
    The revenue lost the supreme court case with NTL.
    They can't be in a position to demand the 21% following that result.
    You're more than welcome to bring another High Court case to force them to change their position.

    The NTL VAT rate was based on the fact that they actually sent someone to your house to perform a service, whereas the DSL self-install "Connection fee" does not, on the face of it, appear to substantially based on the actual manual provision of any service. Therefore it's not at all a foregone conclusion that the same ruling would apply. Engineer installs might, but as the "engineer" part is only half of the total, it might not be sufficient to warrant the Service VAT rate for the total.


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  • #7
    Ruu_Old
    Closed Accounts Posts: 36,634 ✭✭✭✭Ruu_Old


    i asked Comreg on the matter and the vat rate is still being discussed with Eircom and the Revenue, its up to the Revenue to move on it and determine the correct rate it charges. They havent been told of any outcome as yet.I was advised to contact Eircom to find out further information.


  • #8
    De Rebel
    Registered Users, Registered Users 2 Posts: 1,109 ✭✭✭De Rebel


    This thread has nothing whatsoever to do with Ireland Offline. It looks like an uninspired attempt at eircom bashing.

    To answer your question
    How long can they hold on the 7.5% before they have to pass it on the the revenue and how much interest would they make ?
    the answer is not very long (between 51 and 21 days depending on the date they receive payment) and not very much - unlikely to be more than a few hundred euro per annum: which is a pittance and not worth bothering about for a company like eircom oe esat.

    And bear in mind, this ONLY applies to new connections. So the amount involved is €8.06 per new line installed. Hardly worth getting excited about.

    However, if you, esat or eircom have an issue with this, take a case to the supreme court. Or wait until Revenue voluntarily decide to reduce the rate........

    And I don't think you should count on the possibility of a refund. There are mechanisms in the tax code to limit the damage to state revenue as the result of a court ruling.


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