VAT on Importing to Export

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daveccork

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Ok maybe this should be in askaboutbusiness but i wasn't sure.........

Extract from Revenue Website

"VAT-free importation of goods destined for another Member State

13.4 Where goods are imported from outside the EU into Ireland but are consigned to the importer in another EU Member State, the zero rate of VAT applies. The onward movement of the goods from Ireland to the other EU Member State is a zero rated supply for VAT purposes and the goods are treated as an intra-Community acquisition on arrival in that other EU Member State. The application of the zero rate on import applies only where -

  • the Customs authorities are satisfied as to the bona fides in any particular case; and

  • the importer is registered for VAT in the State; and

  • the importer or his or her agent completes an appropriate declaration regarding the consignment and gives an undertaking to comply with the necessary requirements (VIES etc.) regarding the onward supply to the other EU Member State."
Can I please get your interpretation of this. To me it suggests that if I import from e.g. the US into Ireland but intend on then forwarding the goods to the UK that VAT does not arise at point of entry at either location (Ireland or UK).

I am getting professional advice but it will be a few days before I know the answer - just wondering if anyone can shed any light in the mean time as it is a critical cash flow planning issue.
 
As I understand it, if you are registered for VAT, and are importing - you don't pay VAT as long as your supplier states your VAT no. on goods/paperwork. You might have to pay duty though.

If you then export same goods, providing the recipient is also registered for VAT, it is not payable either.
 
Thanks Caveat

I am aware that this would be the situation with Intra EU imports/exports............... but if I was importing goods from China for sale here then I would to pay VAT at point of entry (and duty) whether I was registered or not and whether or not the Chinese company had my VAT number...........the item I am talking about appears to only be relevant when importing with the intention being to forward on the a UK/EU Member state company.......... just seems strange that bringing it through Ireland (even for Bona-Fide commercial reasons) would negate the cash flow nuisance of paying the VAT and waiting to claim it back.
 
We import from Japan and the only times we have had to pay VAT is when our supplier didn't make it obvious on package/paperwork that we had a VAT No.

Sorry, should add that having a good, regular import agent helps greatly in this regard!
 
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Daveccork

It exactly as it says on the tin.

This is one of the many "simplification rules" running through the EU vat legislation.

The essence of this transaction is that a trader in Ireland would pay X euro in vat at the point of entry and immediately reclaim X euro on his vat return. The net benefit to the exchequor is nil.

Because the goods are immediately being sold on as an intra community supply to another member state there will be no vat charged on the EU supply so once again nothing gained for the Irish revenue

In cases like this the Revenue try to reduce the administrative burdon on all the parties by introducing this type of simplification measure.

I hope this helps.

Importer
[broken link removed]
 
Thanks Importer.

But if I was to buy the goods from China and sell them in Ireland I would be charged VAT at point of entry wouldn't I? Is it only because I am exporting again that I get the benefit of not being charged VAT and I must show that my reasons are Bona-Fide.

The below extract is what I expected the situation to be in the ordinary course of business and my quote in my original post is an exception.

"13.1 For VAT purposes, imports are goods arriving from non-EU countries. In this context it should be noted that certain other territories, (for example the Canary Islands and Channel Islands) are regarded as not being part of the EU for VAT purposes. As a general rule, imported goods are liable to VAT at the same rate as that which applies to the sale within the State of similar goods. (The one exception to this is in the case of the importation of certain goods listed in Appendix F.) Accordingly, goods which are liable to VAT at a positive rate on sale within the State (most goods) are liable to VAT at a positive rate at importation and goods which are zero rated on sale within the State (for example, most food, children’s clothing, books etc.) are zero rated at importation."


Dave
 
Precisely

The concession is only available if you can demonstrate that the onwards supply is out of Ireland

If you are selling the stock in Ireland then of course VAT at the point of entry applies and the revenue gets its pound of flesh.
 
Thanks aphrodite.

Sorry to drag out this point further but is this from personal/practical experience or is it your interpretation of the extracts I have enclosed above.

many thanks for all responses thus far
 
Dave

I dont think anyone is going to present their credentials on a site like this.

Might be worthwhile getting confirmation from your local VAT 'relationship officer' to be sure,to be sure.

I have alsways found these people to be very helpful.
 
Well I have started the ball rolling with getting professional advice and I do also intend on getting onto the tax office again (I was already advised by someone in the tax office that VAT would be chargeable at either the point of entry here or in the UK) When I phoned the Customs people in Cork I was told that Revenue will come down on us like a ton of bricks(???????). So I posted here asking for an interpretation of the text as my understanding was at odds with what the relevant governmental offices were telling me.

I appreciate the responses from Importer, Caveat and Aphrodite.

I do not want anyone to present their credentials on this site.......... I asked Aphrodite whether his response was his interpretaion of the text i presented or if he has a practical knowledge of the subject (my original request was for an interpretation of the text so I was just wondering)

I have got conflicting answers from all sides frieght forwarders, tax office, customs so that is why I am probably going over the top here.

Thanks again though for those you did help.
 
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