IR – Discussion paper about VAT Treatment of Depositary Services and Global Custody Services

24/04/2023

The industry VAT working group prepared a Discussion Paper on the VAT treatment of depositary services and global custody services which was shared with Revenue in advance of a meeting on this topic.

Concerns had been raised by industry as to whether the Revenue determination of VAT exempt or VAT taxable status for global custody and depository services would be based solely on the value attributable to each component element, which could fluctuate from time to time and which may not give an accurate representation of the correct VAT status and nature of the service or services provided over the duration of the contract. 

Revenue have reconfirmed in their letter of 7 March 2023 to Irish Funds that VAT exemption can apply to global custody services where the "principal" elements of the global custody service are VAT exempt financial services. This will be a question of fact in each case, based on the services supplied.