Ireland Brexit import VAT postponed accounting
- European News
- Feb 7, 2019 | Richard Asquith
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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