Aquatic centre ‘fiasco’ blamed on Revenue

The “bizarre” inability of the Revenue Commissioners to understand complex tax laws was blamed for the Government becoming involved in a lengthy legal battle over the National Aquatic Centre.

The Department of Sport told the Dáil Public Accounts Committee that legal action taken by the State to seek VAT payment from the centre’s operator was based on guidelines supplied by Revenue.

The dispute arose when the department sought the payment of €10.25m on VAT by Dublin Waterworld Ltd, which had entered into a lease to operate the aquatic centre.

Following a six-year legal battle, the Supreme Court decided the VAT sum was not correctly charged — overturning an earlier High Court ruling — and the claim was withdrawn.

“The Revenue guidelines were part of the foundations for the case,” the secretary general at the Department of Sport, Tom O’Mahony, told the committee.

“If the Revenue guidelines had been different, that part of the case would not have been pursued.”

Mr O’Mahony said the cost of the case to the State is not yet known but dismissed suggestions it could be in the region of €1m.

Sinn Féin’s Mary Lou McDonald said there was a “legitimate expectation” the department would understand the law”.

She said: “It took a long protracted procedure, via the High Court and arbitration to the Supreme Court, to tell you that you got it wrong.”

Mr O’Mahony, who was not in charge of the department at the time, said it did not act incorrectly.

“The Revenue guideline was wrong. On foot of that, everybody else acted correctly,” he said.

“Nobody incorrectly interpreted the guidelines. The guidelines were an incorrect interpretation of the legislation.”

Ms McDonald said the €10m levied through the VAT invoice “has to have been very attractive” and if there was not an attempt to break the rules, there was an attempt to “manoeuvre around them”.

Fine Gael TD Simon Harris said it was bizarre, “absolutely astonishing and extremely worrying” that Revenue could provide bogus advice.

“Lessons need to be learned from this fiasco.”