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Adjustment of tax deductible in relation to unpaid consideration
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60. (1) Part 8 of the Principal Act is amended in Chapter 1 by inserting the following section after section 62:
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“62A. (1) Subject to subsection (4), where—
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(a) an accountable person has, during a taxable period (referred to in this section as the ‘initial period’), deducted tax in accordance with subsection (2) or (2A) of section 59, and
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(b) the consideration, or part thereof, due to the supplier of the goods or services has not been paid by that accountable person on or before the last day of the third taxable period following the initial period,
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that accountable person shall reduce the amount of tax deductible by him or her in accordance with subsection (2).
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(2) Where subsection (1) applies, the accountable person shall reduce the amount of tax deductible by him or her, in the third taxable period following the initial period, by an amount calculated in accordance with the following formula, subject to any apportionment arising in accordance with section 61:
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(A-B) x C
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where—
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A is the total consideration (exclusive of value-added tax),
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B is the consideration or part thereof (exclusive of value-added tax) that has been paid, and
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C is the percentage rate of tax chargeable in relation to the supply of the goods or services.
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(3) Where an accountable person has reduced the amount of tax deductible in a taxable period in accordance with subsection (2) and subsequently that accountable person pays the consideration, or part thereof, due to the supplier of the goods or services, that accountable person shall, in the taxable period in which that consideration, or part thereof, was paid, increase the amount of the tax deductible by him or her, by an amount calculated in accordance with the following formula, subject to any apportionment arising in accordance with section 61:
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D x C
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where—
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D is the consideration or part thereof (exclusive of value-added tax) paid during that period, and
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C is the percentage rate of tax chargeable in relation to the supply of the goods or services.
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(4) Where, on or before the due date for submission of the return required under section 76 or 77 relating to the third taxable period after the initial period, an accountable person satisfies the Revenue Commissioners that there are reasonable grounds for not having paid the full consideration, or part thereof, to the supplier on or before the date referred to in subsection (1)(b), this section shall not apply.
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(5) The Revenue Commissioners may make regulations in relation to the operation of this section.”.
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(2) This section has effect in relation to initial periods (within the meaning of section 62A (inserted by subsection (1)) of the Principal Act) beginning on or after 1 January 2014.
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