The High Court upheld an Appeals Commissioner’s decision that Centime Limited was a taxable person for VAT purposes in relation to its planned stadium project, although the project was later abandoned.
In a case stated on a point of law, Inspector of Taxes Brendan Crawford challenged the Commissioner’s determination. The court’s answer was that the determination was correct in law. It did not make new findings of fact: the judge said he was bound by the Commissioner’s findings, which had not been challenged.
Centime, a wholly owned subsidiary of the Football Association of Ireland, was incorporated to develop what became known as Eircom Park as a football stadium and venue for other events. It agreed in January 1999 to buy 50 acres at Fortunestown, Tallaght, for £13.5 million, subject to planning permission. A £675,000 deposit was paid to solicitors as stakeholders and had been repaid by the time of the second hearing before the judge. Centime incurred more than €4 million in project expenditure, including VAT.
The Commissioner found that Centime intended to develop the site and commercially exploit it by granting a long lease to Landau Limited, a fellow FAI subsidiary intended to operate the venue. A draft lease was evidence of that intention, but no lease was executed. Planning permission issued in September 2000 and was appealed by Centime. An Bord Pleanála had not ruled on the appeal when Centime abandoned the project on commercial grounds in March 2001.
Revenue had withheld VAT claims on the basis that a property developer needed an interest in the land, planning permission and a declared intention to make a taxable disposal. It accepted that Centime met the intention requirement. The High Court held that the first two requirements could not be imposed as absolute conditions. A conditional contract to acquire land and a planning application could count as objective evidence of a genuine intention to undertake taxable economic activity. The court stressed that authorities could still assess the evidence in each case; the ruling did not make either a contract or a planning application sufficient by itself.
The Commissioner had confirmed VAT repayments of €667,165.26 and VAT payable of €7,528.82, leaving a net repayable amount of €659,636.44. The High Court upheld the Commissioner’s decision in law. The judgment also noted the lengthy interval between the Commissioner’s June 2002 hearing and the January 2005 case stated, and called for consideration of more efficient procedures, without attributing specific blame to any party.