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Customs Manual on Import VAT

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Customs Manual on Import VAT Tax and Duty Manual Customs Manual on Import VAT Customs Manual on Import VAT A Guide for Staff on Value Added Tax payable on goods imported from outside the European Union. (This document does not purport to be a definitive legal interpretation of the law on this matter and it should be read in conjunction with the relevant legislation.) Document last updated July 2021 ________________________________________________________________________ The information in this document is provided as a guide only and is not professional advice, including legal advice. It should not be assumed that the guidance is comprehensive or that it provides a definitive answer in every case. 1 Tax and Duty Manual Customs Manual on Import VAT Table of Contents 1 Introduction..........................................................................................................................................3 1.1 General .........................................................................................................................................3 1.2 Circumstances giving rise to Import VAT......................................................................................3 1.3 Import VAT similar to Customs Duty in Operation .......................................................................5 1.4 Goods from within the European Union.......................................................................................5 1.5 Registered and Unregistered Traders...........................................................................................6 1.6 VAT Rates......................................................................................................................................6 2 The Basics of the Import VAT System...................................................................................................6 2.1 AEP / Automated Import System (AIS) .........................................................................................6 2.2 Payment of Import VAT ................................................................................................................8 2.3 Value for Import VAT Purposes ....................................................................................................9 2.4 Overpayments ............................................................................................................................11 2.5 Miscellaneous Refund Schemes .................................................................................................13 3 Relief from Import charges.................................................................................................................14 3.1 Reliefs that apply to both Customs Duty & Import VAT ............................................................14 3.2 Other Reliefs which only apply to Import VAT...........................................................................15 3.3 Application of these Reliefs ........................................................................................................15 3.4 Relief under temporary admission .............................................................................................16 3.5 The VAT 56A Scheme..................................................................................................................16 3.6 Onward Supply Relief (Also known as customs procedure 42 or cp42) .....................................17 3.7 Re-importations..........................................................................................................................19 3.8 Customs-free airport ..................................................................................................................20 3.9 Waiver of small amounts............................................................................................................20 4 Modes of importation ........................................................................................................................21 4.1 eCommerce ................................................................................................................................21 4.2 Merchandise in Baggage.............................................................................................................21 4.3 Personal travellers......................................................................................................................21 4.4 Centralised Clearance.................................................................................................................22 5 Import VAT in specific situations ........................................................................................................23 5.1 Aircraft........................................................................................................................................23 5.2 Ships, boats and other vessels....................................................................................................24 5.3 Clothing.......................................................................................................................................25 5.4 Cinematograph films, sound and video tapes, CD’s and DVD’s..................................................25 5.5 Electronic data............................................................................................................................25 5.6 Motor Vehicles ...........................................................................................................................26 6 Conclusion ..........................................................................................................................................27 6.1 Fraud...........................................................................................................................................27 6.2 Doubts and difficulties................................................................................................................28 Appendix A - Goods diverted to home use.................................................................................................29 Appendix B - Onward Supply Relief............................................................................................................30 Appendix C - Legislation .............................................................................................................................31 2 Tax and Duty Manual Customs Manual on Import VAT 1 Introduction 1.1 General In accordance with the Value-Added Tax Consolidation Act 2010 VAT is, broadly, payable a) on the supply of goods and services effected within the State for consideration by a taxable person in the course or furtherance of business. b) on the Intra-Community acquisition of goods effected within the State for consideration by a taxable person; and c) on goods imported into the State from outside the European Union. This Manual deals with the situation at (c) above and gives a general overview of the arrangements in place in relation to VAT payable on goods imported into the State from outside the EU (usually referred to as “Import VAT”). The relevant legislation is contained in Council Directive 2006/112/EC (often referred to as the VAT Directive) and the Value-Added Tax Consolidation Act 2010 (hereinafter referred to as the VAT Consolidation Act) and the Regulations made under that Act. A full list of the relevant legislation is set out in Appendix C. The detailed circumstances under which Import VAT is payable are set out in the following paragraphs. AIS Changes: Since 23 November 2020 AEP for imports was replaced by Revenue’s Automated Import System (AIS). You will find further information in the Automated Import System (AIS) section on the Revenue website. The majority of import procedures will not change. However, where AIS impacts a procedure it will be noted in this manual and full details can be found in the AIS trader guide. In AIS, information is contained in 8 Groups, each with its own Data Elements (DE). The reference is expressed as DE; X/XX. For example, DE 1/1, denotes Group 1, Data element 1. 1.2 Circumstances giving rise to Import VAT 1. Third Countries and Third Territories - Goods which enter the State from a territory outside the European Union (usually referred to as ‘Third Countries’) are subject to Import VAT. There are several places within the European Union which are not governed by the Principal VAT Directive and imports of goods from these territories may also be subject to Import VAT. These territories are referred to as ‘Third Territories’ or ‘Non-Fiscal Territories’ to distinguish them from ‘Third Countries’ and include the following: - Mount Athos - The Canary Islands - The French overseas departments 3 Tax and Duty Manual Customs Manual on Import VAT - The Åland Islands - The Channel Islands In general, we can say that these territories are part of the Customs Territory of the European Union but not part of the Fiscal Territory of the European Union. For a complete list of places which do not fall neatly within the Customs Territory or the Fiscal Territory of the EU please refer to Articles 5 to 8 of the VAT Directive.2 Imports from the Third Territories are denoted on the import Customs Declaration by the code ‘CO’ in DE 1/1. AIS Data Element Customs code Narrative 1/1 CO Import VAT does not apply to Services. 2. Other Member States – As a general rule, EU goods brought into the State from another Member State are not subject to Import VAT (see paragraph 1.4). However, goods (originally
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