The Retail Export Scheme allows persons who are resident outside the EU and who make purchases of goods in the EU to avail of a refund of the VAT charged on these goods where the goods are exported from the EU by the tourist or traveller within three months of purchase. The UK will become a 3rd country and UK residents will become eligible for the scheme post Brexit.
The provision concerning the restrictions and conditions that may be applied to the Retail Export Scheme in the event of a no-deal Brexit was included in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019, which became law on March 17 of this year.
The Government's intention is to provide reciprocal protection to the UK if they decide to restrict the introduction of their VAT Retail Scheme, in the event of a no-deal Brexit. However should the UK apply an unrestricted Retail Export Scheme, Ireland will not commence the precautionary sections, and an unrestricted VAT Retail Export Scheme will operate between jurisdictions.
The proposed measures, while precautionary, were influenced by i) the potential for significant Exchequer impacts as a result of the expansion of the scheme to the UK, ii) the potential impacts on Government health and welfare policies and iii) the potential risk of fraud in the application of the VAT Retail scheme.