After Brexit, since January 1st the UK is now considered to be a ‘third country’ by the EU. Hence there are implications for any transactions of trade with the UK
Brexit has caused additional costs for businesses and private individuals to import second hand cars into the Republic of Ireland. New changes have triggered a Custom Duty of 10% (Subject to Whether Vehicles is UK origin or Not) and Irish VAT on Sales for 21% (Jan /Feb 2021) and its rise to 23% subsequently. The burden for VAT and Customs Duties is hard to pass on to the customers who will refuse to pay the additional costs hence Dealers or sellers have to factor in this additional cost when submitting their return with Revenue.
As per Revenue Guidance.
From 1 January 2021 vehicle imported from Great Britain are liable to:
Customs duty, if applicable
Vehicle Registration Tax (VRT)
VAT at the current standard rate.
VAT
If a person imports a car from the UK to Ireland, VAT on purchase becomes payable at 23%.
Customs Duty
Any vehicle imported from the UK into Republic is required to complete a customs declaration.
Custom Duty is 0% if the vehicle is originated in the UK.
Duty is 10% if the vehicle originated outside the UK.
Given below example helps you to understand the procedure
For example, if a car dealer sells a car in Ireland that was imported from the UK (Assuming vehicles qualifies Zero Custom Duty) Still a cost of VAT applies at the rate of 23%. Say the Car sale price is 20,000 Euros. This means there is a VAT element in it worth 3,739 Euros making it Dear for the dealer to pay this VAT means eating the viability of importing. Previously Car dealers had to pay on the second-hand UK imported cars VAT on Profit margin which is changed since the Brexit hence full VAT of 23% on the price of the car is required to be charged.
If you are a motor dealer and need help in compliance with Taxes for second-hand car transactions, contact us or fill the form below.
Contact us today
Phone: +353 1 44 28230
Mobile/WhatsApp +353 85 1477625
Year-End Accounts
Company Registration
Accounting Solutions
Capital Gains Tax
Payroll
Tax Returns
Business Advisory
Inheritance Tax
Other Services
Happy Clients
Years of Experience
Affiliations
Recent Blogs
How to run an Irish Payroll?
Running a payroll in Ireland involves several steps to ensure compliance with Irish tax laws and regulations. In this blog post, I will provide a general overview of the process for running a payroll in Ireland, including the necessary registration,...
Streamlining Business Operations: The Benefits of Payroll Services in Ireland
Managing payroll can be a complex and time-consuming task for businesses of all sizes. From calculating wages and deductions to ensuring compliance with constantly evolving tax laws, payroll processing demands meticulous attention to detail. In Ireland,...
The Essential Guide to Value Added Tax (VAT) in Ireland
Value Added Tax (VAT) is a consumption tax that plays a crucial role in Ireland's tax system. As a business owner or consumer, understanding the basics of VAT is essential for making informed financial decisions. In this article, we will explore the ins...
Ireland’s Taxation Reforms: Navigating the Shifting Landscape in Accounting
Ireland has long been recognized as a thriving hub for international business, attracting numerous multinational corporations with its favorable tax policies. However, recent developments in the realm of accounting and taxation have placed the country...
Criteria for Directors Not Possessing a PPS Number in Ireland.
In Ireland, a Personal Public Service (PPS) number is a unique identifier issued to individuals who wish to access public services. The PPS number is used by a range of organizations, including employers, social welfare agencies, and the Revenue...
What Is A Directors’ Loan?
How do Director's Loans Work? In most cases, director's loans are interest-free loans that are provided by the company to the director or shareholder. The loan is recorded in the company's accounts as a liability and must be repaid within a certain...
The basics of corporation tax explained
Corporation tax is a tax on the profits earned by companies and other types of businesses. It is a direct tax and is imposed by Revenue (Ireland Tax Departments). Company must be trading and earning profit then Corporate tax is calculated. If a...