Taxi Firm Loses €112,509 VAT Battle with Revenue
- A transport company operating a fleet of 100 taxis has lost a notable tax battle with the Revenue Commissioners, facing a €112,509 VAT assessment.
- The company appealed the decision in January 2023, but TAC Commissioner Conor O'Higgins, after reviewing a 42-page report, found that the firm's arrangement with drivers constituted a rental...
- The firm argued its business model involved a "cosy" arrangement with drivers - a joint venture where the company provided the vehicle,meter,printer,and even secured work for the drivers.
Taxi Firm’s ‘Cosy’ Arrangement Fails to Avoid €112,509 VAT Bill
Table of Contents
Published August 21, 2025
The Ruling
A transport company operating a fleet of 100 taxis has lost a notable tax battle with the Revenue Commissioners, facing a €112,509 VAT assessment. The Tax Appeals commission (TAC) upheld the assessment, initially issued in December 2022, after determining the firm was providing a taxi rental service, not a passenger transport service exempt from VAT.
The company appealed the decision in January 2023, but TAC Commissioner Conor O’Higgins, after reviewing a 42-page report, found that the firm’s arrangement with drivers constituted a rental service, subject to VAT. The assessment covers the years 2018 and 2019.
The ‘Cosy’ Agreement explained
The firm argued its business model involved a “cosy” arrangement with drivers – a joint venture where the company provided the vehicle,meter,printer,and even secured work for the drivers. A director, a taxi driver of 20 years, described this as a collaborative effort, stating, “cosying is a joint venture between me and the driver. I supply the vehicle, I supply the meter, I supply the printer, I supply work, I supply everything.” He pointed to the company’s growth from two to 100 taxis as evidence of the arrangement’s success, calling the agreement a “gentleman’s agreement.”
Though, the TAC found little evidence of shared income between the company and the drivers. Receipts issued to passengers were in the drivers’ names, not the company’s.
Revenue’s Case and the Advert
Counsel for the revenue Commissioners argued the firm was fundamentally engaged in leasing or renting taxis. This argument was bolstered by the firm’s own advertising, which described it as a “rental company” aiming to provide “quality rental vehicles and a professional, no-hassle service.”
Wheelchair Accessibility and Business Model
A second witness for the company highlighted its position as the owner of the largest single fleet of Wheelchair Accessible Vehicles (WAV) taxis in the country. Despite this, the core issue remained the nature of the relationship with the drivers. The TAC determined the company facilitated access to taxis for drivers who might not be able to afford to purchase their own, effectively operating a rental service.