Cormac Devlin (Dún Laoghaire, Fianna Fail)
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284. To ask the Minister for Finance the duties and VAT that apply to vehicles imported into this jurisdiction and registered in cases in which such vehicles were previously imported into Northern Ireland from Britain; if used cars imported into Northern Ireland from Britain prior to 1 January 2021 were not subject to the need to complete a customs declaration and not liable to customs duty or VAT at import in cases in which the vehicle is registered in this jurisdiction; and if he will make a statement on the matter. [7579/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that vehicles imported from Northern Ireland (NI), that were in NI prior to 1 January 2021, when the United Kingdom (UK) left the European Union (EU), are treated as EU goods and no customs formalities are required and VAT on import and Customs duty are not applicable. However, proof of the vehicle’s status in NI prior to 1 January 2021 will be required.

For example:

- A ferry ticket showing the date of arrival in NI, and which clearly identifies the specific vehicle

- A copy of an invoice from a transport company identifying the vehicle and delivery date

- Tax and insurance details indicating use in NI

or

- A copy of the V5C showing the last registered keeper in NI and a date of registration to that keeper prior to 1 January 2021.

I am further advised by Revenue that where a second hand vehicle is imported from GB after 1 January 2021 and the Customs formalities were completed in Northern Ireland, the person wishing to register the vehicle in Ireland should first contact Revenue as there will be a VAT liability that needs to be discharged prior to registering the vehicle for VRT. This measure was introduced as a result of a UK decision to allow the VAT margin scheme to apply to imports of vehicles from GB to NI. A ‘Supplementary Import Declaration – VAT on import’ must be made to Revenue in respect of the VAT margin scheme and qualifying vehicle being imported from NI. Revenue will request verification that the Customs formalities have been completed in NI. Once the VAT, which is charged at the standard rate, is either paid or accounted for (in the case of VAT registered businesses only), Revenue will provide the necessary documentation to the customer for presentation to the NCT centre.

There are two methods of calculating the VAT:

- For vehicles purchased directly from a NI dealer: VAT is charged on the VAT inclusive value shown on the invoice issued by the NI dealer. No additional costs are added for cost of transport and Customs duties because these costs will already be included in the price charged by the NI dealer.

- For vehicles purchased from GB and imported to Ireland via NI by the same person: VAT is charged on the Customs value of the vehicle i.e. the VAT inclusive value shown on the invoice issued by the dealer plus transport costs to the point of importation plus Customs duties paid.

This is a temporary arrangement until the situation regarding VAT at importation is regularised for vehicles imported from GB to NI. This is currently being discussed between the European Commission and the UK Government.

If proof cannot be provided that Customs formalities have been completed in NI for used vehicles where they have been previously imported from GB to NI since 1 January 2021, then an import declaration is required in Ireland. Under the provisions of the EU - UK Trade and Cooperation Agreement, if the imported vehicle is of UK origin, then a preferential tariff rate of 0% Customs duty applies. However, where the vehicle is not of UK origin, Customs duty at a rate of 10% of the value of the vehicle is applicable to the importation. The value of the goods on which VAT is levied at the point of importation is the Customs value of the vehicle. The Customs value consists of the purchase price of the vehicle, plus transport and insurance costs, any handling charges and the Customs duty amount payable on the vehicle. Vehicles are liable to VAT at the standard rate. Finally, Vehicle Registration Tax (VRT) is payable on the open market selling price of the vehicle at registration, with the VRT calculation and collection being undertaken by the NCT centres.