Dáil Éireann Debate, Friday - 7 September 2018
190. Deputy Joan Burton asked the Minister for Finance the further studies and assessments his Department has carried out on the impact of the UK varying its VAT rates post-Brexit, in particular in Northern Ireland; the various policy scenarios it has tested with regard to substantial changes in the UK VAT regime; and if he will make a statement on the matter. [36967/18]
View answerThe Department of Finance has been assessing and preparing for the impact of Brexit since well before the referendum on 23 June 2016, with this work now intensified. The primary policy areas for the Department relate to the economic and financial sector implications stemming from Brexit. This work is being undertaken within the whole-of-Government framework coordinated by the Department of Foreign Affairs and is vital to guaranteeing Ireland’s interests are protected in the negotiation process to ensure that any adverse impacts on our economy are minimised.
The Department undertakes a rolling analysis which focusses on the key Brexit related policy issues, which includes taxation. The issue of VAT and Brexit was analysed in four papers as part of the Tax Strategy Group (TSG) in 2017 and 2018. (TSG 17-06 – Selected VAT Issues, TSG 17-09 – BREXIT Taxation Issues, TSG 18-05 – VAT Issues and TSG 18-08 – Brexit).
The papers identify the rules governing the European Value Added Tax System for goods and services within the VAT Directive (2006/112/EC) to which all 28 EU Member States must adhere and notes that post Brexit, the UK will no longer operate within those EU frameworks. This change has a number of implications for business and consumers.
Like all Government agencies, the Revenue Commissioners are also actively engaged in examining a range of scenarios in order to support Ireland's objectives. However, until the shape of post-Brexit arrangements becomes clear, it will not be possible to formulate specific plans.
There remains a large level of uncertainty in the UK position and the precise future arrangements for taxation shall depend on the outcome of future relationship negotiations between the EU and United Kingdom, and those discussions are currently ongoing.
