The Irish Government have released their proposed Brexit Omnibus Bill 2020 which sets out several tax measures to assist in dealing with the effects of Brexit. One of the proposed measures is introducing postponed accounting for import VAT.
The proposed measure means that importers would be able to record the import VAT in the VAT return for the VAT period in which the import takes place under the reverse charge mechanism. This is similar to how VAT is currently accounted for on the acquisition of goods into Ireland from other EU Member States. It would provide Irish businesses expecting to import a vast amount of goods from Great Britain, from 1 January 2021, with significant cash flow benefits.
The measure would not only apply to the import of goods from Great Britain but would be available to all importers that are VAT-registered in Ireland and are importing goods from any non-EU country.
Conditions are expected to be laid down for those wanting to apply the new scheme with the Irish Revenue being able to exclude any business that doesn’t meet those conditions.
It should be noted that, due to the Northern Ireland Protocol, goods delivered from Northern Ireland to Ireland will not be imports but will continue to be acquisitions as currently.
