I propose to take Questions Nos. 128 to 130, inclusive, and 145 together.
I have previously outlined the rationale for the changes I have made to the VAT Retail Export Scheme in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (the Brexit Act). This scheme enables visitors that are resident outside the EU to benefit from VAT relief on goods purchased in Ireland and subsequently taken outside of the EU. If the scheme applies to UK visitors post-Brexit and the UK operates a similar scheme for EU visitors, Irish consumers will be able to buy goods VAT free in the UK and UK visitors will be able to buy goods VAT free in Ireland. This could give rise to a considerable displacement of consumer purchases in both directions, resulting in significant VAT revenue losses; purchases by UK visitors in Ireland would not produce any VAT revenues and collecting VAT on goods in excess of personal importation allowances (if any) brought into Ireland by consumers would be extremely difficult. Due to the volume of passenger movements between the UK and Ireland, the volume of refund applications is likely to significantly increase which simultaneously heightens the risk of abuse of the Retail Export Scheme post Brexit.
I have also advised that in the event that the UK either restrict the scheme or do not apply it to Irish passenger traffic, Ireland will take the precautionary measures in the form of commencing the sections in the Brexit Act, so to minimise the potential for abuse of the scheme and to reduce the possibility of diversion in retail consumption from Ireland to the UK, post Brexit.
The amended legislation contained in the Brexit Act provides that the value of qualifying goods must exceed €175 in order to be eligible for a refund under the scheme. This change is fully compatible with EU law and is in line with the EU VAT Directive. The monetary limit will apply in respect of all third country travellers who apply for a refund under the scheme, post commencement of the section of the Act. I have also introduced a new requirement of proof of importation of the goods into the UK and the associated proof of payment, where applicable, of relevant UK VAT and duties, for the goods purchased under the scheme in order to qualify for a refund.
The UK government has indicated that it does not intend to apply a VAT Retail Export Scheme to EU Member States post Brexit and I have had no further communication from them on this. Should the UK apply a full Retail Export Scheme post Brexit, Ireland will not commence the precautionary legislation requiring proof of importation and the associated proof of payment and a non-restricted VAT Retail Export Scheme will therefore operate between Ireland and the UK. The Government’s policy is to reciprocate any arrangements made by the UK, subject to EU law, and any legislative changes that may be made will of course be kept under review by Revenue.