Global Daily Tax News, Ireland Issues New VAT Guidance For Cost Sharing Groups, (Nov 30, 2023)

The Irish Revenue has released a new Tax and Duty Manual (TDM) that provides guidance on the VAT treatment of cost sharing groups.

In certain circumstances, an exemption from VAT applies to the supplies by a Cost Sharing Group (CSG) that would otherwise be taxable.

The exemption applies when two or more persons with exempt and/or non-business activities who operate in the public interest join on a co-operative basis to form a separate, independent group of persons to supply themselves with certain services at cost and exempt from VAT.

The exemption is designed to help businesses to collaborate and to share resources without being deterred by the cost of VAT on any recharges. The exemption does not apply to the supply of goods or to the supply of VAT exempt activities not in the public interest, such as insurance or financial services.

The guidance sets out the conditions for accessing the exemption and concludes with examples.