Tax implications of Brexit 

There has been unprecedent change to international tax rules and guidance in recent times which has directly impacted local legislation in Ireland. 

If your business involves the movement of goods through the UK, you should review your supply chain model and processes to establish if any additional cost or administration has arisen and if a reorganisation of your supply chain could save costs. 

Our tax team outline some of the tax implications and actions businesses need to be aware of:

• The EU-UK Trade and Cooperation Agreement covers customs charges when importing goods from the UK to the EU, including Ireland. However, the deal only applies to products coming into Ireland that are manufactured or originate in the UK and comply with the rules of origin. This means that you may still have to pay customs duty on some items bought in the UK and delivered to Ireland.
• This trade deal does affect VAT, and the VAT position of moving goods from the UK to Ireland now mirrors that of importing goods from non-EU jurisdictions. You may therefore have to pay VAT on imports from the UK from 1 January 2021. However, if you are approved to use the postponed VAT accounting provisions then VAT will not be due at the point of importation and you can self-account for such VAT on your VAT return, eliminating any cash flow impact of paying the VAT at the point of importation. This approval must be applied for as part of any new VAT registration application. The postponed VAT accounting needs to be recorded and tracked on the VAT returns filed by the Irish company. 
• Depending on your terms of sale with customers, you may be required to register for VAT in Ireland when previously the sale was treated as an intra-community acquisition. For example, a UK-based supplier selling on Delivered Duty Paid (DDP)  terms to Irish customers will now have to register for Irish VAT and charge VAT on the sale in Ireland. 
• If your business was registered for MOSS (Mini One Stop Shop) in the UK to account for VAT on your EU B2C sales, this registration needs to be cancelled and a new registration put in place in an EU country. You may also need a new UK registration to account for UK domestic B2C sales. 
• The Northern Ireland Protocol agreement sets out the specific terms of trade between Ireland, Northern Ireland and Great Britain. In broad terms, the result is that Northern Ireland remains part of the EU for VAT purposes in relation to the movement of goods from Ireland to Northern Ireland and vice versa. Note however that complex rules can apply where goods are moved from Great Britain to Ireland through Northern Ireland. The EU VAT rules for services supplied between Ireland and Northern Ireland no longer apply, and Northern Ireland is treated as being outside the EU. This is an ever-changing environment and any trade with the UK, including Northern Ireland, should be kept under constant review. 

Crowe is actively assisting a number of our clients deal with the tax implications of Brexit. Contact a member of our tax team for further information.