Ireland’s tax authority sends 2k bogus VAT demands to EU SMEs

Irish Revenue (the Republic of Ireland’s tax authority) has apparently sent out 2000 erroneous letters to EU online sellers demanding VAT payment under the EU VAT MOSS scheme. #vatmoss

The demands, often for many thousands of Euros, were thought by many to be a scam but it turns out they have been sent out by Revenue incorrectly.

Revenue has since issued a statement acknowledging the error but has confirmed that they will be sending new letters for VAT MOSS payments. They said: “Revenue has recently issued approximately 2,000 payment reminder letters to suppliers of eServices who are registered under the VAT MOSS scheme. This is in accordance with the rules of VAT MOSS, where payment has not been received by Revenue in respect of a past tax period.

Unfortunately, due to a technical error, the information contained in these reminders is incorrect. Revenue is in the process of correcting the errors. In the meanwhile, the recent payment reminders should be ignored. In due course, new and accurate reminder letters will issue to any remaining customers who have not made the appropriate payments.”

John McCarthy, CEO of digital tax specialists Taxamo says of the error: “While Irish Revenue have confirmed this particular batch of letters can be ignored, this situation highlights that digital sellers who are part of the VATMOSS scheme can be contacted directly by Member States in pursuit of settlement arrears. Merchants therefore need to ensure that they are capturing and maintaining accurate records of all transactions for tax compliance.”

This is interesting because Tamebay was under the impression that individual member states were required to contact UK taxpayers via HMRC only and not directly. Apparently this was just an informal agreement, which is worrying.

Did you get an Irish VAT demand in the post this week?