Written answers

Tuesday, 12 March 2019

Department of Foreign Affairs and Trade

Brexit Issues

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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83. To ask the Minister for Foreign Affairs and Trade if he has received an update on the meetings that the British Attorney General has been having with EU officials on the withdrawal treaty and the backstop in particular. [11928/19]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I spoke with Michel Barnier over the weekend, during his visit to Dublin. I also remain in contact with my UK counterparts, and spoke with David Lidington during my visit to London late last week.

There have been an intensive series of meeting between the EU and the UK over the past few weeks, including between the British Attorney General, Geoffrey Cox, the UK Brexit Secretary, Stephen Barclay, and the EU Chief Brexit Negotiator Michel Barnier. The Commission has been working with the UK to agree language with a view towards the meaningful vote in Westminster, without reopening or contradicting the Withdrawal Agreement, including the backstop.

On 11 May Prime Minister May and President Juncker agreed a package of measures comprising of an “Instrument relating to the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community” and a “Joint Statement supplementing the Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom of Great Britain and Northern Ireland.” There was constant contact between our team and the Commission's team over the last number of days as these documents were being developed. The Taoiseach also spoke by phone with President Juncker before the package was agreed with Prime Minister May.

These documents are complementary to the Withdrawal Agreement and Political Declaration and aim to provide an additional layer of interpretation, clarification and elaboration to the United Kingdom. They provide the legal assurances sought by the UK on the temporary nature of the backstop, as well as additions to the political declaration on the future relationship setting clearly our commitment to finding alternative arrangements to the backstop.

The Government welcomes this agreement, and is prepared to back this package of measures in the interests of securing an overall deal. As we have said all along, the backstop is an insurance policy. We have no intention of wishing to trap the UK into an arrangement against its will. The Withdrawal Agreement and the backstop does not do this, but does provide the guarantees that a hard border will be avoided and that the Good Friday Agreement is fully protected.

The EU is fully committed to exploring alternative arrangements so that the backstop is never used, or would only apply temporarily if it ever needs to be used. The agreed package makes clear that work on these alternative arrangements will begin as soon as the Withdrawal Agreement is signed.

This has not been an easy process and compromise has been shown on both sides. We hope that with these further assurances the House of Commons will approve the Withdrawal Agreement. This is the best and only way to ensure an orderly withdrawal that fully protects the Good Friday Agreement and the peace process.

Photo of Joan CollinsJoan Collins (Dublin South Central, Independent)
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84. To ask the Minister for Finance if a response will issue to a query (details supplied) regarding a no-deal Brexit. [11897/19]

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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112. To ask the Minister for Finance if cars will be tariff free in the event of a no-deal Brexit (details supplied); and if he will make a statement on the matter. [11895/19]

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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113. To ask the Minister for Finance the position regarding vehicles (details supplied) in the event of a no-deal Brexit; and if he will make a statement on the matter. [11896/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 84, 112 and 113 together.

I am advised by Revenue that they have had extensive engagement with businesses and trade representative bodies throughout the State over the last number of months to assist them in their preparations for Brexit.

I am advised by Revenue that, subject to documentary evidence, a car dealer who has new vehicles in stock that were imported through the UK, which were pre-registered with VRT quotations and are in the State before 29 March, will not be subject to differing rules on tariffs, VAT or VRT.

If a car dealer sells vehicles that are manufactured and invoiced from Italy but are transported to Ireland via the UK, Revenue have advised that these are EU goods which may be transported directly to Ireland via direct shipping routes or alternatively may be transported through the UK under the control of a customs procedure called the Customs Transit procedure.

EU goods moving under the Customs Transit procedure, from one Member State to another, through a third country, are treated as EU goods upon re-entry to the EU and therefore incur no additional import duties or taxes upon arrival into the State.

I am advised by Revenue that new and used vehicles and/or parts imported from the UK post-Brexit, having been manufactured in the UK, would be subject to Common Customs Tariffs (CCT) in the event of the UK leaving the EU without an agreement. A complete description of the item being imported would be required in order to give a full customs tariff classification, this is particularly important for the importation of car parts and accessories. In the case of new or used vehicles imported from a third country, customs duty is chargeable at importation in the normal way, unless the trader has been authorised by Revenue for the deferral of taxes and duties.

Full details of the customs procedures are available on Revenue’s dedicated Brexit website www.revenue.ie/brexit. If further information is required in relation to customs procedures, these can be addressed to brexitqueries@revenue.ie.

In relation to VAT, vehicles that are acquired from Italy and transited through the United Kingdom will be subject to the current VAT rules. Vehicles imported from the UK will be subject to VAT at the point of importation.

In order to alleviate the cash flow burden on Irish businesses post Brexit, I have legislated for postponed accounting for import VAT. Under this system, importers will not pay import VAT at the point of entry but will instead account for import VAT through their VAT return, so that it is reclaimed at the same time that it is declared - a straightforward simultaneous in/out accounting transaction, without the need to pay the import VAT at the point of entry to the State. Use of postponed accounting will be optional and will be available to all traders in Ireland who trade with operators in countries outside of the European Union for a time after Brexit, after which continuation of the facility will be subject to conditions, to be set by the Revenue Commissioners at a later date.

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