30. Goods supplied to non-registered persons

Summary

This section sets out what are known as the distance sales rules. Distance sales into Ireland covers mail order, etc. sales to Irish non-registered customers, where the supplier is responsible for delivering the goods. Where the value of distance sales into the State exceeds €35,000 in a calendar year, the supplier must register for VAT in the State. He or she may opt to register in any event.

Similar rules apply to Irish mail order businesses and other distance sellers supplying to individuals in other Member States. The Irish business must register in each Member State in which the sales threshold is exceeded, but may opt to register in that State even if it is not. The threshold is €100,000 or the equivalent for Germany, France, Luxembourg, Netherlands and the United Kingdom and €35,000 or the equivalent for the other Member States.

New means of transport and distance sales of excisable goods are not covered by the distance sales thresholds. For distance sellers who are below the threshold, the place of supply is where the transport began (i.e. the seller’s Member State, not the customer’s Member State.)

Details

(1)(a) Where goods are transported or dispatched to unregistered persons:

• in the State, from another Member State or from outside the Community through another Member State, or
• in another Member State, from the State,

the place of supply is deemed to be the place where the transportation or dispatch ends. In other words, where the private customer is.

(1)(b) New means of transport are not covered by the distance sales rules.

(2)(a) These rules only apply where the distance sales thresholds are exceeded.

• For goods coming into Ireland, the threshold is €35,000
• For goods going out of Ireland, the threshold is €35,000 (or the equivalent in national currency) for annual supplies into some Member States and €100,000 (or equivalent) for annual supplies into other Member States.

However, suppliers can elect that the place of supply rules in subsection (1) apply, by opting to register in the Member State of destination, even if their supplies do not reach the thresholds. Also, it may be noted that accountable persons who supply goods to other Member States under the distance sales rules are obliged to issue an invoice under section 66(1).

There is no threshold for excisable products – any supplier making distance sales of excisable goods to another EU Member State must register in that Member State, because the sales will always be subject to VAT in the Member State of arrival.

(2)(b) New means of transport are not covered by the distance sales rules.

Note that while this section provides that place of supply for cross-border supplies to non-registered persons is where the transport ends, section 87(11) ensures that this rule does not apply to margin scheme goods.

Relevant Date: Finance Act 2020