Dáil Éireann Debate, Wednesday - 24 February 2021
166. Deputy David Cullinane asked the Minister for Finance the reason a 10% tariff now applies to the importation of used cars from the UK if the cars were built in Europe as the country of origin but no tariff applies if the car was built in UK; and if he will make a statement on the matter. [9491/21]
View answer167. Deputy David Cullinane asked the Minister for Finance the reason 21% VAT is applied to the new 10% tariff now applied to used cars imported from the UK; and if he will make a statement on the matter. [9492/21]
View answer168. Deputy David Cullinane asked the Minister for Finance if the new 10% tariff on the importation of used cars from the UK only applies to newly registered cars from 2021 onwards; and if he will make a statement on the matter. [9494/21]
View answer169. Deputy David Cullinane asked the Minister for Finance the reason margin cars imported from the UK are subject to 21% VAT, given that VAT has already been paid on the car in UK that cannot be reclaimed by the importer; and if he will make a statement on the matter. [9495/21]
View answerI propose to take Questions Nos. 166 to 169, inclusive, together.
Following the withdrawal of the UK from the European Union, an import of a vehicle from Great Britain is treated as an import from a third country, i.e. a non-EU country. If a vehicle is imported from Great Britain into Ireland, the importer is required to complete a customs declaration and pay customs duty, if applicable, and VAT at 21% prior to presenting the vehicle for registration. Under customs law, VAT at import is chargeable on the customs value of the goods. The fact that VAT has been charged in Great Britain on used vehicles subsequently imported into the State has no bearing on their liability to VAT at import when imported into the EU.
Under the Protocol on Ireland/Northern Ireland, Northern Ireland will continue to apply and adhere to EU rules in relation to trade in goods with the result that there are no customs formalities, including customs declarations or payment of tariffs, on trade between Ireland and Northern Ireland. On 14 January, the UK introduced significant changes to the UK VAT margin scheme for used cars imported from Great Britain into Northern Ireland. These changes are not in compliance with provisions of EU law on VAT that apply in Northern Ireland as per Article 8 of the Protocol. Accordingly, used cars that are imported into NI from GB after 31 December 2020, under the rules currently in force in the UK are not single market goods and cannot be brought into the State as if they were. Therefore, when they are brought into the State, they are liable for VAT and duty on the same basis as used cars brought into the State from Britain.
Vehicles registered and used in Northern Ireland before the end of the Brexit transition period on 1 January 2021 can be registered here in the same way as before without any check on the customs status.
I am also advised by Revenue that from 1 January 2021, the EU-UK Trade and Cooperation Agreement (TCA) has eliminated tariff duties for trade between the EU and Great Britain where the relevant rules of origin are met. If the goods are of UK origin, then a 0% tariff rate applies. Under the terms of the TCA, goods of EU origin that were in use in the UK and that were subsequently imported into Ireland from Great Britain will not be eligible for the 0% tariff rate as they will not qualify as UK origin under the rules of origin.
To import a car of EU origin from Great Britain into Ireland, a customs declaration must be completed. Customs duty of 10% applies on the customs value of the car. The customs value is the invoice price plus the cost of transport and insurance. VAT at 21% is calculated on the customs value plus customs duty.
I am further advised that there is a Returned Goods Relief available for vehicles subject to strict EU conditions. Vehicles can be exported from the EU to a 3rd country and re-imported into the EU without the payment of Customs Duty provided all the required conditions for Returned Goods Relief are met. In very specific circumstances, relief from Value-Added Tax may also apply where the vehicle is re-imported into the EU by the same person that originally exported the goods out of the EU. The conditions are
- The vehicle must have been originally exported from the EU
- Must not have been altered and
- Must be re-imported within three years of export from the EU.
Details of how to claim returned goods relief for cars is on the Revenue website at www.revenue.ie/en/customs-traders-and-agents/customs-electronic-systems/aep/ecustoms-notifications/2021/ecustoms-notification-24-2021.pdf. If the car is of UK origin, it is important to note that the preferential tariff treatment must be claimed on import on the Customs declaration. Details on how to do this are also available on the Revenue website.
Cars imported into Ireland prior to 1 January 2021 can be registered as normal. The owner must provide documentation to prove that the car was imported into Ireland prior to 1 January 2021. An example of the documentation would be a sales invoice or a ferry ticket.
