Irish Revenue confirm VAT compliance for digital platform ride
The Irish Revenue service has clarified reverse charge VAT from non-resident digital ride sharing platforms will require otherwise exempt taxi drivers to VAT register. And they must declare and pay the cash amount of the platform VAT to the Revenue.
Irish passenger services, including taxi rides as part of gig and sharing economy, are normally exempt from VAT. Meaning drivers do not register or charge VAT. But they may not recover VAT.
Foreign booking services trigger reverse charge and registration
If they receive ride booking services from non-resident booking platforms such as Uber (resident in the Netherlands), then VAT is (taxi booking services are not exempt) due but via the reverse charge. This is because the place of supply for B2B services is the country of the customer. In this case, there Irish VAT registration threshold does not apply to received services. The Irish driver must register to report the receipt of the VAT services from the platform – self accounting for the VAT.
Generally, the input VAT the taxi driver reports from the platform could be offset against the output VAT as per the reverse charge. However, since tax services are exempt, the driver may not do this.
The net effect is that taxi drivers must declare the platform VAT, and remit it to the Revenue with their VAT return.
