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Ireland Brexit import VAT postponed accounting

In preparation for changes on a ‘no-deal’ Brexit, the Irish government is proposing introducing an import VAT postponed accounting scheme. This would relieve importers of goods from the UK into Ireland of the obligation to pay 23% Irish import VAT.

The UK is set to leave the EU without a transition plan on 29 March 2019.  The UK would then become a third country for VAT, and any goods leaving for Ireland (and any other EU member state) would become liable to import VAT for the first time.

To alleviate this cash flow burden, Irish Finance Minister, Paschal Donohoe, has proposed introducing a deferred import VAT system, ‘postponed accounting’. This would mean importers would not have to make any cash payment of the import VAT; instead simply reporting the VAT transaction in their next Irish VAT return under the reverse charge rules.

The UK is also to introduce a similar scheme for all UK importers after Brexit. Around 20 other EU countries offer such schemes to importers.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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