Following the departure of the United Kingdom from the EU, VAT and customs duty will become chargeable at the point of importation for UK imports.
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 deferred payment system requires that the importer has a comprehensive guarantee in place. The requirement for a guarantee is set out in EU legislation and is not a requirement that can be waived by a Member State.
However, Article 211 of the VAT Directive provides for the introduction of postponed accounting by Member States 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 option is currently not legislated for in Ireland.
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.