Contrast with EU Arrangements
Sales and purchases of goods where the goods move out of or into the European Union are treated as exports and imports. The treatment differs to that applicable to sales within the European Union.
Sales within the EU are labelled supplies and acquisitions. They are treated in a different way to imports and exports.
Sales to Great Britain after 1 January 2021 are exports. Purchases from Great Britain are imports.
Where goods are sold from Ireland and transported directly out of the European Union there is an export. The place of supply is where the transport begins; Ireland. The sale is zero rated.
The transport may be undertaken by or on behalf of the supplier or by or on behalf of of the purchaser based outside the European Union. The supply to a domestic established purchaser who the transports the goods out the European Union is not treated as an export by the supplier. There is a domestic supply followed by an export by the purchaser..
The position should be distinguished from an indirect sale where goods are sent to another EU state and subsequently exported. In that case there may be a intra-EU supply and acquisition in the other state followed by an export from that state.
A sale can be direct even though the goods physically pass through several member states before exiting the EU. In this case they may move under transit which is a form of customs control, both for customs duties and VAT control purposes. The seller will require proof of direct transportation out of the European Union in order to justify the zero rate of VAT. It is usually done by way of the transport documents.
Purchases by Visitors
Visitors who reside outside the EU may reclaim VAT on purchases made by them within the EU. The goods must be removed from the EU within three months of purchase. The purchaser must prove that he or she is a traveller.
The retailer may charge VAT and recover it when there is proof that the goods have been removed from the EU. If the retailer sells the goods without charging VAT it will become liable for VAT if the goods are not removed from the European Union within three months.
VAT refund agencies act on behalf of of visitors for purchases up to a certain value. They may arrange for the proof of removal of the goods and present it to the Revenue. The agency may refund the visitor.
Imports VAT Registered
An import for VAT purposes is an import from outside the European Union. VAT is almost always chargeable on imports.
Until 2021 VAT was payable at the point of entry with the possibility of deferring VAT for a period to the middle of the following month subject to having a deferment account and guarantee.A VAT registered person who imported goods through the post may account for VAT on his/ its VAT return. The consignment must be less than €260. Since 1 January 2021 any VAT registered purchaser who imports goods may take claim postponed VAT accounting in the import declaration.
If the VAT registered business incurs VAT on all sales it may offset the import VAT against its input credit on its following VAT return. The net effect is that no VAT payable at the point of import or ultimately, if the business is not registered for VAT or is not subject to VAT on some of its sales it will suffer the VAT or a proportionate VAT.
Imports Not VAT Registered
An unregistered business or private person must pay VAT at the point of entry of the goods into the state. The VAT accounting is done in conjunction with the import customs declaration which must be made.
Consignments less than €150 are exempt from customs duty. If they are are supplied by an overseas vendor or online marketplace since 1 July 2021 that vendor or marketplace must register and charge Irish VAT to the buyer. For consignments over €150 the unregistered buyer must pay VAT on the goods at the time of importation.
The rate of VAT applicable to imports is the same as that applicable to the domestic supply of the same goods. Customs duty may also apply. It would apply to the cost of the goods plus VAT plus the cost of transportation of the goods to the border. This will include transport and insurance and commission.
VAT is paid on the customs value of the goods. This will generally be the price. Where the price is not the market value or where there is no consideration it would be the market value.
Businesses who have a high proportion of exports in their sales can be authorised to import goods VAT free. This facility is now more generally available in the context of postponed VAT accounting
There are a number of exemptions and reliefs for VAT on imports. In several of these cases there as equivalent relief for customs duties. Reliefs are available for
- Reimportation of goods that have been previously exported
- Goods imported by non-tax registered persons established in other EU states, provided the goods are consigned onwards and import VAT is charged in the EU state of final destination
- Certain very temporary importations
Transfer of residence to the State, subject to conditions; personal goods are covered; the person must previously have resided outside the State for at least 12 months have owned the goods for six months paid VAT and taxes on them in the former country of residence and bring the goods into Ireland within 12 months of transfer of residence; the goods must be for normal domestic use in the persons residence both before and after movement of the state.
Relief is available for goods that are imported and are consigned to a VAT registered person in another state. The onwards transaction should be identified at the point of import.
Returned goods relief allows for importation free of VAT of goods that were previously exported within three years and are returned unaltered to the same entity. This is narrower than the relief for customs duty which does not require the goods to be returned to the same state or to the same person.
Prior to 1 July 2021 goods of value less than €22 were not subject to VAT at the point of importation.
Processing and Warehousing
See generally the reliefs from customs the following categories of cases. There is equivalent VAT suspension. The detailed conditions are determined by the customs relief.
Outward processing is a relief from import duties and VAT on goods that are exported out of the European Union and reimported having been processed/worked on. The relief for VAT is narrower than that for customs duty. VAT is charged on the increased value attributable to the processing abroad.
Inward processing is the reverse of the above. It applies where goods come from outside the European Union are processed/worked upon in Ireland and re-exported. The importation is free of VAT. The goods must be under customs suspension. Authorisations are required. VAT would arise if the goods are released and not re-exported.
Customs warehousing involves goods been put into duty suspension arrangements pending release. A customs warehouse may be a public revenue warehouse for may be a private warehouse authorised by revenue. Some processing may be permitted. VAT and duties are suspended until the goods are released from the warehouse.