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Duty Free Sales

Dáil Éireann Debate, Wednesday - 28 November 2018

Wednesday, 28 November 2018

Questions (130)

Michael McGrath

Question:

130. Deputy Michael McGrath asked the Minister for Finance the potential economic benefits to the tourism and indigenous distillery and associated sectors and to regional ports and airports associated with the reintroduction of duty free sales when the UK departs the EU; and if he will make a statement on the matter. [49784/18]

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Written answers

The Department of Finance has been assessing and preparing for the impact of Brexit since well before the referendum on 23 June 2016.

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.

Extensive and detailed Brexit preparedness and contingency work across all Government Departments and Agencies is ongoing. In line with that work, the Department undertakes a rolling analysis which focuses on the key Brexit related policy issues, which includes taxation. Duty Free sales was examined as part of the Tax Strategy Group paper in 2018 (TSG 18-08 – Brexit).

On 25 November 2018 the European Council endorsed the Agreement on the withdrawal of the UK from the EU, and approved the Political Declaration setting out the framework for the future relationship. The arrangements for taxation shall therefore depend on the outcome of future relationship negotiations between the EU and UK. Detailed negotiations on the exact nature of the future relationship may not begin until after the UK formally ceases to be an EU Member State on 29 March 2019.

As part of the Withdrawal Agreement a transition period has been agreed within the context of the UK’s withdrawal from the EU, in order to allow additional time for the EU and the UK to finalise the details of the future relationship. During the transition period, the whole of the EU acquis will apply to the UK which will preserve the status quo during that period, thus avoiding any gaps or cliff edge effects between the UK leaving the EU and when a future relationship agreement enters into force.

Considering that taxation and level playing field issues will form part of the future relationship economic discussions, it is therefore too early to speculate further whilst negotiations are ongoing.

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