Our view on recent updates from Irish Revenue and EU Commission

Revenue eBrief No. 168/21 – 2 September 2021

Customs Import Procedures Manual

The manual regarding Customs Import Procedures has been updated to take account of goods moving to or from the United Kingdom (excluding Northern Ireland) which are subject to customs formalities since 1 January 2021. Revenue's ‘Customs Roll-On Roll-Off’ Service (RoRo Service) facilitates the movement and control of goods and vehicles when moved by scheduled ferry between Ireland and Great Britain.

These updated and amended sections provide updated information on Customs Import Procedures. Such additions should be welcomed by those involved in areas relating to customs. In particular, it will be welcomed by individuals looking for more in-depth customs information following Brexit.

On 4 October 2021 Revenue confirmed that the new Customs Import System is now being used by all relevant businesses. The implementation means such businesses have now completed their transition to the Automated Import System (AIS). The new modernised system enables businesses that import goods from outside the EU to meet all the legal requirements of the EU Union Customs Code (UCC). Revenue have also confirmed that it is now no longer possible to submit new import declarations via the system that predated AIS.

Revenue eBrief No. 173/21 – 15 September 2021

Guidelines for the application of Section 108B VAT Consolidation Act 2010

The Tax & Duty Manual Guidelines for the application of Section 108B of VAT Consolidation Act 2010 provides information on circumstances where persons may be served a notice to issue a document which is in the same format as a VAT invoice in respect of all supplies for which a VAT invoice has not been issued.

The specified period will be a period not exceeding 2 months. The notice can only take effect on or after 7 days following the date the notice has been served. Where a section 108B notice is issued, a supplier must continue to issue VAT invoices in accordance with section 66(1) to accountable persons. In relation to any supply for which a full VAT invoice in accordance with section 66(1)(a) is not issued, a section 108B document must be issued. If a simplified invoice in accordance with section 66(1)(b) is issued in respect of a supply, then a section 108B document must also be issued in respect of that same supply.

It is worth noting that like section 108A which was introduced in Finance (No. 2) Act 2013, this measure can be used to address non-compliance with invoicing rules and to tackle fraud and shadow economy activity. Section 115(8B) of VATCA 2010, provides for a €4,000 penalty in all cases where the supplier fails to comply with the notice issued.

This update indicates that Revenue may be preparing to use this section more frequently as it attempts to tackle fraud where it identifies issues relating to non-compliance with invoicing rules and VAT registration.

Revenue eBrief No. 174/21 – 15 September 2021

Guidelines for the application of Section 108C VAT Consolidation Act 2010

The Tax & Duty Manual Guidelines for the application of section 108C VAT Consolidation Act 2010 - Joint and several liability for tax provides information on cases where persons may be jointly and severally liable for tax.
This guidance provides that where VAT has been fraudulently evaded an accountable person who knowingly or recklessly participated in transactions connected to that fraudulent evasion of VAT is jointly and severally liable for the VAT that has not been remitted, and Revenue may notify him or her accordingly.

A person who is jointly and severally liable for unpaid VAT is liable for the net amount of unpaid VAT. Persons who are held to be jointly and severally liable for unpaid VAT will also be liable to pay the interest due on the net amount of VAT.

The purpose of this legislation is to encourage compliance and discourage the participation in, and the facilitation of, VAT fraud. These guidelines intention is to assist businesses which operate legitimately, and which may face unfair competition from businesses which participate in transactions resulting in the evasion of VAT.

Revenue eBrief No. 185/21 – 12 October 2021

Outward Processing - goods sent to the UK for repair

A new section (7.4) has been added to the Tax and Duty Manual on Outward Processing, outlining the procedure for goods going to the UK for repair as provided for under the EU/UK Trade and Cooperation Agreement.
This new section now means goods going to the UK for repair can be re-imported into Ireland with no duty or VAT payable on condition the goods fall under the definition of repair as specified in the Trade and Cooperation Agreement

This new section now means goods going to the UK for repair can be re-imported into Ireland with no duty or VAT payable on condition the goods fall under the definition of repair as specified in the Trade and Cooperation Agreement

Revenue eBrief No. 188/21 – 14 October 2021

Inward Processing - goods imported from the UK for repair

A new section (2.6.1) has been added to the Tax and Duty Manual on Inward Processing, outlining the procedure for goods imported from the UK for repair provided for under the EU/UK Trade and Cooperation Agreement.

Goods imported into Ireland from the UK for repair can be imported with no duty or VAT on condition the goods fall under the definition of repair as outlined in the Trade and Cooperation Agreement.

Revenue eBrief No. 187/21 – 14 October 2021

Budget 2022 – Excise Duty Rates

Changes have been made to excise duty rates as part of Budget 2022. These change are available in the Tax and Duty Manual Budget 2022 - Excise Duty Rates.

The Tax and Duty Manuals (TDMs) Tobacco Products Tax and Accounting for Mineral Oil Tax Manual have also been updated to reflect changes to the excise duty rates that take effect from 13 October 2021.

Updates from the European Commission

September infringements package: key decisions – 23 September 2021.

It had been decided that the Commission would send a reasoned opinion to Italy for failing to notify measures for the transposition into national law of Directive (EU) 2018/1910 (the VAT 'Quick Fixes' Directive) that harmonises certain VAT regulations. The directive identified certain situations and intended to "quickly fix" them, in order to prevent possible double taxation or non-taxation, and to increase legal certainty for businesses. As a result of the new provisions, the VAT treatment of trade between member states is intended to be simpler with taxation happening in the state of destination.
Member states were supposed to implement the provisions by the end of December 2019 and if Italy does not act within the next two months, the Commission may decide to refer the case to the Court of Justice of the European Union.

https://ec.europa.eu/commission/presscorner/detail/en/inf_21_4681

Statement by the European Commission following the UK announcement regarding the operation of the Protocol on Ireland / Northern Ireland- 6 September 2021.

The Commission has said that it “takes note” of the UK ministerial statement regarding the operation of the Protocol on the current basis, including the continuation of existing grace periods. The Commission has emphasised that the Withdrawal Agreement is an International Agreement and that both the EU and UK are legally bound to fulfil their obligations under the agreement. The Commission has not threatened legal action against the UK for the continuation of grace periods.

https://ec.europa.eu/commission/presscorner/detail/en/statement_21_4586

Press speaking points by Vice- President Maros Sefcovic in Belfast, following his two- day visit to Northern Ireland – 10 September 2021.

The EU Commission has said that it’s overarching objective is to establish a positive and stable relationship with the United Kingdom. However, accepting the UK's command paper in full which would mean a renegotiation of the Protocol, will not be accepted. The Commission believes that the renegotiation of the protocol would result in instability, uncertainty and unpredictability for the people of the Northern Ireland.

Regarding the well-being of people of the Northern Ireland, the Commission have highlighted two main issues:

• Limiting the disruption in the supply of goods to Northern Ireland, especially regarding the supply of the medicines to the Northern Ireland.
• Enhancing the participation of Northern Irish political institutions and stakeholders in the implementation of the Protocol.

The Commission also highlighted that ‘the Withdrawal Agreement, and the Trade and Cooperation Agreement’ is basis on which to cooperate with the UK as there is no alternative available.

https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_21_4674