Regulation 24(1) of the Value-Added Tax Regulations 2010 requires all VAT registered traders to submit a VAT Return of Trading Details (RTD) on an annual basis following the end of the respective accounting period.
The RTD is a statistical form which provides a summary of supplies of goods and services, imports and purchases giving rise to deductible input VAT at the various VAT rates. The return includes all Irish, intra-EU and non-EU trade carried out by the Irish business. The VAT exclusive value of the supply of goods and services should be included. All turnover including turnover at exempt rates and at the zero rate must be included on the form.
If a claim for a repayment or refund of tax under any tax head is filed and there is an outstanding VAT RTD with a due date within the previous 12 months, then that repayment or refund will be automatically withheld. The outstanding VAT RTD and any other outstanding tax returns will be notified in a ‘Notice of Returns Outstanding’ letter issued by Collector-General. The repayment or refund will issue upon receipt of all the outstanding returns.
Failure to file an RTD may result in an increase in Relevant Contracts Tax (RCT) rate applicable to sub-contractors and a withdrawal of a tax clearance certificate. Revenue’s system takes account of all outstanding returns when determining the RCT rate to apply. A number of returns must be outstanding to increase the RCT rate from 0% to 20%.
The increase in the RCT applicable to sub-contractors will have a detrimental impact on cash-flow if 20% or 35% of the gross payment to be made was withheld. As will tax refund delays and no valid tax clearance certificate.
An annual VAT RTD will be required to be filed for the 12 month period based on the accounting period for businesses as notified to Revenue. The annual return is due to be filed within 23 days of the year end via the Revenue Online System (ROS).
It is essential that you accurately complete the RTD. Revenue are using their computer system (REAP) to analyse information from RTDs and comparing it to VAT3 returns, Corporation/Income Tax returns and VIES returns. If the returns are not matching the possibility of receiving a Revenue compliance letter and/or a Revenue Audit is significant.
Ensure your accounting software is configured properly to assist you with the preparation of the RTD as otherwise, completion can be very difficult to prepare. Ensure you are using the full range of VAT codes. If you do not post entries to the correct VAT codes, then you will not be able to file a correct RTD return. Analyse purchases between “items for resale” and “items not for resale”. Account for Intra-EU VAT transactions correctly. Fill in all fields even when NIL applies.
Make sure your RTD is completely accurate and filed on time. There is a penalty of €1,520 for failing to comply.