Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 41:

In page 35, between lines 3 and 4, to insert the following:“Amendment of section 58 of Act of 2010

53. Section 58(2) of the Act of 2010 is amended—

(a) by the substitution of the following paragraph for paragraph (a):

“(a) the supply of a traveller’s qualifying goods, where the total value of that supply of goods, including tax, is more than €175, and”,

and

(b) by the insertion of the following paragraph after paragraph (iii):

“(iiia) has, in respect of a traveller whose domicile or habitual residence is in the United Kingdom, proof that—

(I) the goods have been imported into the United Kingdom by or on behalf of the traveller, and

(II) value-added tax and duties of customs and excise, chargeable by virtue of the law of the United Kingdom, have been paid on the importation of those goods,”.”.

This amendment amends section 58 of the Value Added Tax Consolidation Act which relates to the retail export scheme. Two amendments are proposed. The first amendment provides that the value of qualifying goods must exceed €175 in order to be eligible for a refund under the scheme. This monetary limit will apply in respect of all third country travellers who apply for a refund under the scheme post the commencement of the section.

The second amendment introduces a new requirement of proof of importation of the goods into the UK and the associated proof of purchase, where applicable, of relevant UK VAT and duties for the goods purchased under the scheme. The retail export scheme enables travellers who are resident outside the EU to benefit from VAT relief on goods purchased in Ireland and subsequently exported outside the EU. The UK's status as a third country will render UK residents eligible for VAT refunds on purchases of qualifying goods under the scheme post-Brexit.

The purpose of the amendments to the operation of the scheme is to provide a legal basis to control and minimise the scope for abuse and also to minimise the possibility of diversion in retail consumption from Ireland to the UK post-Brexit. This is as a result of the volumes of passenger traffic between the UK and Ireland.

To date the UK has not publicly confirmed its intentions on the availability of a VAT retail export scheme to EU passenger traffic post-Brexit. The amendment to the Bill is, therefore, a precautionary measure which will be subject to a commencement order. The amendments provides Ireland with the legislative basis to trigger a reciprocal protectionary measure should the UK publicly commit to not applying a VAT retail export scheme in the coming weeks. If the UK proceeds with applying a VAT retail export scheme to UK-EU passenger traffic, then Ireland will not commence the sections.

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