For Value-Added Tax (VAT) purposes, imports are goods arriving into the European Union (EU) VAT area.
This section will explain:
- when VAT is payable and not payable on importation
- clearing taxable goods through Customs
- Customs-free airport and VAT.
When is VAT payable on importation?
Value-Added Tax (VAT) is payable at point of importation into the State. Imported goods are liable to VAT at the same rate as applies to similar goods sold within the State. Goods which are zero-rated on sale within the State (for example, most food, children’s clothing and printed books) are zero-rated at importation.
There are exceptions to this general rule and a list of these goods can be found in Works of art.
VAT, along with Customs Duty, is payable at the point of importation, though in practice most traders have a deferred payment account. In such cases, the amount due is not debited from a traders TAN account until the 15th of the month following importation.
How is the VAT liability on imported goods calculated?
The value of imported goods for the purpose of VAT is their value for Customs purposes increased by:
- the amount of any Customs Duty, Anti-dumping Duty, Excise Duty (excluding VAT) payable in relation to their importation
- any transport, handling and insurance costs between the place of introduction into the European Union (EU) and the State
- onward transportation costs to the place of final destination, if known, at the time of importation.
Input credit in your VAT return for VAT on imported goods
You are entitled, as a VAT registered trader, to take credit for VAT paid on goods imported for the purposes of your business. You must claim this credit in your return in the taxable VAT period concerned, subject to the normal restrictions.
When is VAT not payable on importation?
Import Value-Added Tax (VAT) is not payable on goods that are imported by a VAT registered trader who:
- is based in a Customs-free airport
- holds a VAT-free authorisation
- places the goods under any of the following arrangements:
Relief from Import VAT may also be available where the characteristics of the goods, or the circumstances of their importation, meet the criteria for certain reliefs.
VAT on imported alcohol products
VAT is not payable at importation in respect of imported alcohol products placed under an Excise Duty suspension regime (for example, excise warehouse).
Zero-rated scheme for certain persons
A trader with 75% or more of annual turnover from zero-rated intra-Community supplies of goods or exports can apply for a VAT-free authorisation . This enables the trader to import goods at the zero rate of VAT.
VAT-free importation of goods destined for another EU Member State
Goods from outside the European Union, intended for onward supply, can be imported to Ireland by a VAT registered trader at the zero rate . The goods must be supplied or transferred to a VAT registered customer in another Member State.
This scheme is known as ‘Onward Supply Relief’ or ‘Procedure 42’. Full details of the scheme and the conditions which apply are available in the Customs manual on import VAT.