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Brexit Issues

Dáil Éireann Debate, Tuesday - 18 December 2018

Tuesday, 18 December 2018

Questions (157)

Fergus O'Dowd

Question:

157. Deputy Fergus O'Dowd asked the Minister for Finance if concerns raised in correspondence (details supplied) regarding deferred payments on VAT and customs duty will receive a response; and if he will make a statement on the matter. [53363/18]

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Written answers

The rules governing the European Value Added Tax System for goods and services are contained within the VAT Directive (Council 2006/112/EC). Following the departure of the United Kingdom, the collection of indirect tax revenues on United Kingdom trade would change from operating within current EU legislative frameworks to those that are in place for ‘third countries’.

Post Brexit, VAT and customs duty will become chargeable at the point of importation.

Article 211 of the VAT Directive provides for the introduction of postponed accounting for certain categories of taxable persons or goods. Postponed accounting enables importers to account for import VAT through their VAT return, so that it is reclaimed at the same time it is declared. Whilst some Member States provide for postponed accounting the rules vary considerably, with certain Member States limiting it to certain categories of taxpayer.

In Ireland, approved importers can use the deferred payment system allowing them to defer payment of certain charges, including customs and VAT at import until the 15th of the month following importation.

The implications for business cash flow as a result of VAT and customs duty being chargeable at the point of importation have been identified as a consequence of Brexit and are being considered as part of the ‘whole of Government’ planning currently being undertaken.

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