Brexit Developments - February 2021

Indirect Tax Matters February 2021

We comment below on some of the main VAT Brexit issues that may affect businesses in Ireland. As the main impact of Brexit is to supplies of goods, businesses should review their supply chain from a VAT perspective.

Intra-Community Supplies
Sales of goods to GB can no longer be treated as intra- Community supplies and should not be included on VAT, VIES or Intrastat returns. Also the requirement to include the customer’s VAT registration number on a sales invoice is eliminated. Furthermore, the VAT simplifications that apply to intra-Community supplies (Triangulation and Call Off Stock) should not apply where goods move to or from GB, or in the case of triangulation where a non EU VAT registered British trader is involved.

Any goods going to GB that are to be transported directly by or on behalf of the person making the supply or by or on behalf of a non-established business should qualify as exports and liable to VAT at the 0% rate.

Importing Goods
Goods imported into Ireland from GB will generally give rise to import VAT at the point of entry into Ireland. Similarly goods that go from Ireland to the UK will be imports and liable to UK import VAT.

Businesses that are registered for VAT and Customs in Ireland may avail of postponed accounting to deal with VAT on imports from all non-EU countries. Under postponed accounting importers account for import VAT by self-accounting, in their VAT returns, for the VAT due and can claim a VAT input credit subject to the normal rules for VAT deductibility. This results in no VAT having to be paid over to Revenue on imports. Revenue have amended VAT returns and the value of imported goods subject to postponed accounting should also be included in a new box PA1 in the returns.

VAT Refunds
The deadline to submit claims for recovery of VAT incurred in the UK during 2020 has changed and claims must be submitted by the 31 March 2021.

There is scope for Irish and other EU businesses to recover VAT incurred in the UK in 2021 and future years again subject to rules governing VAT recovery.

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