Dáil Éireann Debate, Wednesday - 31 March 2021
123. Deputy Matt Carthy asked the Minister for Finance if he will review the charges that apply to the purchase of second-hand cars sourced from the UK as a result of Brexit; and if he will make a statement on the matter. [17196/21]
Amharc ar fhreagraFollowing 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 23% 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.
The EU-UK Trade and Cooperation Agreement (TCA), which has been provisionally applied since 1 January 2021, 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. 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 at the following link: https://www.revenue.ie/en/customs-traders-and-agents/customs-electronic-systems/aep/ecustoms-notifications/2021/ecustoms-notification-04-2021.pdf
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 are not eligible for the 0% tariff rate as they do 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 23% is calculated on the customs value plus customs duty.
The changes in the charges that apply to the purchase of second-hand cars sourced from the UK are a direct result of Brexit and the application of EU and Irish legislation in relation to the sourcing of second-hand cars from the UK.
