French case could spark VAT repayments for Irish firms

A case being heard in the French Supreme Court may result in VAT repayments for Irish business, according to Deloitte.

Deloitte said Irish hotels, car hire companies, restaurants, sports centres, and any other business that takes deposits and retains them in the case of no shows could find repayment, according to Deloitte.

The French company (Societe Thermale D'Eugenie-Les-Bains) is arguing that deposits paid by no shows should not be subject to VAT.

The French Supreme Court has referred the case to the European Court of Justice. Even though it is a French case, if the European Court finds in favour of the French company, that judgement will apply to Irish companies in similar circumstances.

According to Deloitte, if a business has been in receipt of deposits, which they would have retained in the case of no shows, and accounted for VAT on them, they may be entitled to a VAT refund if the European Court finds in favour of the French company.

The case was referred to the ECJ recently and it will be some time before there is a decision. If a business is potentially affected, Deloitte recommends that, to protect their position, businesses lodge a protective claim now.

Deloitte provides audit, tax, consulting and financial advisory services through nearly 800 people in Dublin, Cork and Limerick.