Brexit – VAT Changes for Irish Businesses

Without a doubt, Brexit caused a dilemma for Irish businesses trading with the United Kingdom. The system of cross-border transactions was affected on 1 January 2021 and with it came the change of VAT rules for trading in goods and services, which has led to several adjustments to the Irish companies that import or export goods from the UK. Therefore, the vital questions are what type of changes have been made and predominantly, what effect does this have on your business?

VAT on Import

VAT is to be paid at the same time the importation into Ireland or Northern Ireland took place. If you are authorized to use the deferred payment system, VAT will not be due at that time. The deferred payment system does as the name implies. It allows you to delay the payment of some import charges which regard Customs Duty and VAT. You can postpone the payment of the charge up until the 15th of the month after importation. Imported goods are obligated to VAT at the same rate that involves those goods when sold in Ireland.

  • Distance Selling
    Without a doubt, distance selling of merchandise in Great Britain to private consumers in Ireland is ubiquitous. Many companies operating from GB are registered in Ireland and are forced to charge Irish VAT as a result of surpassing the distance selling threshold.
  • Regain VAT experienced in Great Britain
    You can regain VAT that has been encountered in another Member State from that Member State, under European law. You need not be established in that Member State. All of this can be done through the Electronic VAT Refund system.
  • Exporting goods and services to Great Britain
    For VAT purposes, goods are directly exported to a destination that is outside of the European Union VAT area. This also includes Great Britain. The distance selling threshold stopped applying to sales made by companies in Ireland to consumers in GB. The zero rates of VAT apply to export. You need to make sure that the commodities have left the EU and contain proof of export. You will be obligated to announce each export to Revenue using a customs export declaration. This declaration can be completed and submitted electronically using Revenues Automated Entry Processing system. You may be obligated to show Revenue your license for exporting goods.
  • What is crucial to know about custom declarations while trading with Great Britain?
    Since 1 January 2021, all Irish companies that are trading with Great Britain, are forced to give customs declarations. Businesses will be necessitated to determine who is going to be responsible for all their customs documentation and assure that they have all the data required to complete customs declarations.

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