Import VAT postponed in Ireland on GB imports

Jan 12, 2021

 

The Postponed Method of Accounting for VAT was introduced in Ireland for imports into Ireland by registered businesses from countries outside the EU (including Great Britain). This means that instead of Irish businesses having to pay import VAT upfront at time of importing the goods, business can elect for VAT to be accounted for in the next VAT return.  This Institute lobbied for the introduction of this option since the Brexit referendum to ease the cash flow burden for many traders. The UK has already introduced this method for imports from the EU.

Postponed Accounting will not apply to goods purchased from Northern Ireland. These purchases will be treated as EU intra-community acquisitions.

Section 8 of Revenue’s Guidelines for VAT Registration sets out the actions new VAT applicants need to take to be able to apply the method. Existing VAT registrations will be given automatic entitlement to Postponed Accounting.  

To use Postponed Accounting, it is very important that an importer enters 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.

The Annual Return of Trading Details (VAT RTD) will also be amended to coincide with the introduction of Postponed Accounting. and will apply for all VAT periods or accounting periods commencing from 1 January 2021.

More information can be found on revenue.ie.