VAT rules with Northern Ireland after the transition period

Aug 04, 2020


The European Commission has proposed changes to the EU’s VAT rules, in preparation for the end of the transition period with the United Kingdom on 31 December 2020. The amendment to the VAT Directive introduces a special identification number for businesses in Northern Ireland, so that EU VAT provisions can be properly applied to goods, in line with the Protocol on Ireland / Northern Ireland.  

Under the Protocol, EU VAT legislation will continue to apply when it comes to goods traded in Northern Ireland. This means, amongst other things, that goods sold and transported from Northern Ireland to the EU (and vice-versa) will be treated the same as cross-border supplies of goods within the EU, including for VAT exemptions and deductions. 

These provisions will not apply to supplies of services in Northern Ireland, which will be subject to UK VAT rules after the transition period. Supplies of goods and services made elsewhere in the UK will also be subject to UK rules for VAT. These changes to the VAT Directive will require some IT adjustments from Member States.  

For more information read the European Commission’s update