New VAT rules for scrap metal industry

Revenue has confirmed that new VAT rules are to apply to supplies of scrap metal from 1 May 2011.

The new rules will effect:

  1. VAT registered scrap metal dealers who buy scrap metal from VAT registered businesses in Ireland; and
  2. VAT registered businesses that supply scrap metal to scrap metal dealers in Ireland.

The “reverse charge” mechanism will apply from the 1 May 2011. This means that someone selling scrap metal to a scrap metal dealer does not charge VAT on the invoice. Instead, the scrap metal dealer accounts for the VAT in the sales section of their VAT return and claims a corresponding input credit in the purchases section of the same VAT return (where full credit for VAT incurred on purchases is allowed).

Revenue has produced an information document available here

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