VAT – Trade between Ireland and Great Britain

Updated on April 9, 2022

Exporting to Great Britain

For VAT purposes, exports are products that have been shipped outside of the European Union VAT region and are therefore exempt from VAT. Great Britain is now included in this.

Businesses in Ireland can now sell to customers in Great Britain without having to meet the distance selling criteria.

Exports are subject to a zero-rate of VAT. VAT and Exports has further information.

Export documentation is required, as is verification that the products in question have left the European Economic Area (EEA).

Revenue will require an export declaration for each and every item you ship out of the country. Revenue’s Automated Entry Processing (AEP) System is used to electronically submit the declaration.

Certain sorts of EU exports necessitate licences. Taxpayers may ask for proof of an export licence if you’re importing items from outside.

Overview

The United Kingdom (GB) is no longer a member of the European Union (EU). This means that the rules of trade with a third country also apply to trade with the United Kingdom, or GB for short.

Note

When it comes to goods VAT, Northern Ireland (NI) is still treated as an EU Member State. When it comes to VAT on services, Northern Ireland is not considered a Member State.

VAT and commerce with Northern Ireland have more information.

Importing from Great Britain

Imports are items that have been brought into the European Union and are subject to EU VAT. The EU VAT area includes Northern Ireland, but not Great Britain (GB).

Customs and excise taxes on imports
In most cases, VAT is charged when goods are imported into Ireland or Northern Ireland. On the other hand, if you are allowed to use the deferred payment method, VAT will not be due. For some import costs, the deferred payment option can be utilised. Value Added Tax (VAT) and Customs Duty (CD) are part of import taxes (VAT). Payment of these costs can be postponed until the 15th of the month after the items arrive. Imported goods sold in Ireland are subject to the same VAT rate as domestically sold goods.

Note

If you’ve been registered for VAT and C and E since December 31, 2020, at 11:59 p.m., you’re eligible for postponed accounting. To use postponed accounting, you must include appropriate codes on your import declarations. Additional information can be found under Payment of Import Duties for UK Imports.

Adding up the entire cost of the imported products from outside the EU VAT region is the only way to figure out how much VAT is due. This price includes the cost of shipping, insurance, and any applicable customs charges. The Guide to Import Procedures has more information on VAT computations.

Each shipment you intend to import into the country must be reported to Revenue Canada using an official customs import declaration. The declaration is submitted electronically through Revenue’s Automated Import System (RAIS) (AIS).

In many cases, VAT paid on goods imported for business purposes is deductible for VAT-registered enterprises. This credit can only be claimed on your tax return for the taxable VAT period in which it occurred, unless otherwise noted.

The VAT-registered trader may be excluded from paying VAT in specific situations when importing goods from outside the EU. Import VAT on goods imported by VAT-registered traders, for example, is not required.

Authorization for VAT-free or customs-free travel via a port or airport.
Internet-based retailing of goods
Customers in Ireland commonly purchase goods from businesses in Great Britain via the internet. The distance selling threshold necessitates the registration in Ireland of many UK-based businesses, who must then charge Irish VAT.

On this list, you’ll find the following businesses:

On import disclosures required by customs authorities in Ireland, goods are subject to Irish VAT, which must be declared.

Postponed accounting

Import VAT accounting can now be deferred for any VAT-registered traders.

The Revenue Commissioners may deny participation in this programme to traders who do not meet certain requirements.

As a result of this:

allows you to claim VAT back if you declare import VAT in a return and account for it on your VAT return. This applies to imports from non-EU countries. The standard rules of deductibility apply here.
The Revenue Commissioners may ban traders from postponed accounting if they do not fulfil certain norms and procedures. It is necessary to comply with tax and customs laws before moving on. A company may also be required to show that its activities are feasible and that it has the financial means to satisfy its VAT obligations by the tax authority.

What you need to know about postponed accounting
When submitting an import statement, importers that wish to utilise postponed accounting must put a code on their document. Accountability for VAT in the importer’s VAT return is made possible by this rule. Additional boxes (fields) will be added to the VAT Return to record this information. Importers that want to pay VAT at the port of entry should exclude the code from their entry form. Additional information about the technique can be found in Postponed accounting.

Note

If you’ve been registered for VAT and C and E since December 31, 2020, at 11:59 p.m., you’re eligible for postponed accounting. To use postponed accounting, you must include appropriate codes on your import declarations. Additional information can be found under Payment of Import Duties for UK Imports.

If Revenue has expelled a merchant from the postponed accounting system, the code must not be supplied on the import declaration. Import VAT must be recorded and paid if this is the case. Customs agents will block importers who have been forbidden from participating in the programme from doing so.

Note

In Northern Ireland, purchases do not have to be accounted for until the following year. EU intra-community purchases will continue to be classified as such in the future.

Inputs for the VAT Return and the Annual Return of Trading Details will need to be increased if accounting is delayed (VAT RTD). Starting on January 1, 2021, all VAT periods or accounting periods will require the updated VAT Return and the VAT RTD.

Reclaiming VAT incurred in Great Britain

European legislation allows VAT paid in one EU member state to be recovered in another EU member state. You are not required to visit that Member State. The EVR system is used to do this (Electronic VAT Refund).

The Electronic VAT Refund (EVR) System is no longer in operation:

In the United Kingdom (UK), or in Ireland, VAT is paid by Irish businesses or VAT paid by UK enterprises.
You can get a refund if you were charged VAT in Great Britain. In this case, you should make your request to HMRC (HMRC)

Note

The EVR system allows you to claim VAT back on purchases made in Northern Ireland. Because of this, a new version of the VAT Directive is in effect. Businesses in Northern Ireland are required by law to use a different VAT number when trading on goods with the EU. In these transactions, the NI trader’s VAT number should begin with ‘XI’. This is in accordance with the Protocol on Ireland/Northern Ireland.

Exporting to Great Britain

For VAT purposes, exports are products that have been shipped outside of the European Union VAT region and are therefore exempt from VAT. Great Britain is now included in this.

Businesses in Ireland can now sell to customers in Great Britain without having to meet the distance selling criteria.

Exports are subject to a zero-rate of VAT. VAT and Exports has further information.

Export documentation is required, as is verification that the products in question have left the European Economic Area (EEA).

Revenue will require an export declaration for each and every item you ship out of the country. Revenue’s Automated Entry Processing (AEP) System is used to electronically submit the declaration.

Certain sorts of EU exports necessitate licences. Taxpayers may ask for proof of an export licence if you’re importing items from outside.