Ireland’s tax authorities have updated their Customs Manual to reflect new VAT regulations on e-commerce. The Revenue’s Customs Manual on Import VAT now reflects the various provisions of the EU’s new e-commerce VAT package.
The new rules, which took effect on 1 July 2021, apply to all EU member states.
Under the new e-commerce regulations, all consignments imported into an EU state are subject to VAT, even low value goods that were previously exempt from VAT.
To facilitate payment of import VAT, Irish customs guidance states that the Customs Declarant should notify the relevant importer of any applicable. However, as the guidance points out, importers should take note of the import VAT terms. In certain cases, as there are cases in which the seller, or online platform, collects VAT at the point of sale.
Notably, when using the Import One Stop Shop (IOSS), customers pay VAT when they purchase their items. The retailer, or platform, accounts for the VAT, and there are no additional charges due when the customer receives the item.
As of 1 January 2021, Postponed Accounting is the only way to postpone import VAT in Ireland. Using the mechanism, importers can postpone the import VAT that would be due on items imported from non-EU countries. (Trade between EU member states is not generally subject to import VAT.) They can then account for the VAT on their VAT return.
Following Brexit, imports from the UK into Ireland are subject to import VAT. Postponed Accounting is thus available as an option in such cases. Note, however, that the importation of goods originating in Northern Ireland is currently deemed intra-EU trade, as per the provisions of the Northern Ireland Protocol.
(Note also, that importers in the UK also have the option to take advantage of Postponed Import VAT Accounting.)