VAT on imports
For VAT purposes, imports are goods arriving into the EU VAT area, which includes Northern Ireland but excludes Great Britain.
If you are approved to use the deferred payment system, VAT will not be due at the point of importation and you can defer payment of certain import charges including customs duty and VAT until the 15th of the month after importation. The VAT due on the goods is calculated on the total cost of the goods including transport costs, insurance costs and any applicable customs duty.
You will have to declare each importation to Revenue using a customs import declaration. The declaration is submitted electronically using Revenue’s Automated Import System (AIS).
If you are a VAT-registered trader, you are generally entitled to take credit in your return in the taxable VAT period concerned for VAT paid on goods imported for the purposes of your business.
Import VAT is not payable on goods imported by a VAT-registered trader who:
Companies based in Great Britain will continue to have an obligation to register in Ireland and charge Irish VAT if they are selling goods from their business to private consumers in Ireland. Those companies will also need to complete the necessary import declaration in respect of goods imported into Ireland.
Postponed accounting arrangements enable VAT-registered traders to self-account for VAT on imports on their VAT return so that import VAT may, subject to the usual rules on deductibility, be reclaimed at the same time as it is declared on a VAT return. This will be a straightforward reverse charge transaction, without the need to pay the import VAT at the point of importation.
Postponed accounting will not apply to goods purchased from Northern Ireland. These purchases will be treated as EU intra-community acquisitions as at present.
Postponed accounting for VAT on import is available to all VAT-registered traders, subject to certain conditions. Traders must be able to demonstrate to Revenue that they meet the following conditions and requirements, where the accountable person:
Revenue may also seek security bonds at the point of registration or at any stage in the life cycle of a business, where it is clear that such action is necessary for the protection of the exchequer.
To use postponed accounting, an importer should enter a code on the import declaration. This code will allow the VAT on import liability to be accounted for by the importer in their VAT return. The VAT return will contain new boxes to capture this information. If an importer wishes to pay VAT at the time of importation, the relevant code should not be entered.
Where a trader is excluded by Revenue from the postponed accounting scheme, the code should not be entered on the import declaration. The import declaration completed by or on behalf of a trader will not be pre-populated with the postponed accounting indicator. In that case, VAT will have to be accounted for and paid on importation. Customs staff will ensure that any importer who has been excluded is not allowed to avail of the scheme.
The VAT return and annual Return of Trading Details (VAT RTD) will be amended to coincide with the introduction of postponed accounting. These returns will require additional details relating to postponed accounting. The amended VAT return and VAT RTD will apply for all VAT periods or accounting periods commencing from 1 January 2021.
Reclaiming VAT incurred in Great Britain
The Electronic VAT Refund (EVR) system will no longer be available to claim:
The EVR system can be used to reclaim VAT incurred on goods in Northern Ireland. Traders in Northern Ireland should use the prefix “XI” in their VAT number for the purpose of transactions relating to goods with the EU.