Advice on treatment of Irish VAT

I wonder if you are able to assist with my enquiry – I have written a brief overview below of the situation I would be grateful for guidance on . A UK customer asked our company to supply our products to a delivery location in Eire on DDP terms. No duty was applicable, as the goods are classified as “duty free” but, since the UK customer doesn’t possess an Irish EORI, they asked us, as their supplier, to pay the Irish VAT at 23% and recharge this 23% to them, when submitting our invoice . We were advised by a customs agent in Eire that the best way to handle this situation was for them to act as an entity, allowing use of their Irish EORI to facilitate the transaction, and subsequently invoicing us the 23% Irish VAT, which we would then pass onto the customer. With this scenario in mind, could you please advise how this should be accounted for on the VAT return, once the UK customer has paid the invoice with the 23% VAT added ? Your advice regarding the above, and any other additional information you believe I should be aware of to correctly handle such a transaction, is much appreciated.

You would treat the sales invoice to the UK customer as a zero rated sale as you have proof of export/goods left the UK. The value on your sales invoice would be the gross amount/cost to you, which would be the net price you quoted for the goods plus the 23% Irish VAT and the freight agents handling fee. So for example if the goods were valued at £1,000 we add £230 Irish VAT to give a gross value of £1,230 and this goes into Box 6 of the UK VAT return as the net value and £Nil for Box 1 as it has been treated as a zero rated export in your VAT return. In other words, treat as a zero rated export but make sure you inflate the price to cover the cost of the irrecoverable Irish VAT.

Hi,

This does seem an unusual prodecure to deal with an import of goods into Ireland.

Normally if the importer of the goods is a business, then they would need to obtain a EORI number in Ireland and they would then be the importer of record.

If the importer is not a business, then the shipping agent would not normally use their own EORI to clear the goods but charge out the import VAT to the customer or, in this case, to you.

This transaction is taking place outside the UK so as long as you report the supply as an export in box 6 of your VAT return that would suffice.

Thank you.

Thank you very much for the responses received to my request for advice, and in particular, the working example provided by Jason.