I am advised by Revenue that as a result of the UKs departure from the EU, the import of a vehicle from the UK is treated as an import from a third country. As a result, the importer is required to complete a Customs import declaration and pay Customs duty, if applicable, and import VAT at the standard rate of 23% prior to presenting the vehicle for registration.
The Customs Duty rate for the import of new and second-hand passenger cars into the EU is 10%. Customs duty rates are determined by the EU and as Customs is an EU competence, it is not possible for Ireland to apply a different rate as Customs duty rates are common across all Member States. However, I am advised that in certain circumstances, relief from Customs duty and / or import VAT may be available to importers and in these circumstances, documentation must be provided to Revenue to show that the vehicles meet the specific conditions set out in the EU Customs legislation, the Union Customs Code (UCC) or in the EU-UK Trade and Cooperation Agreement (TCA).
Importers of new and second-hand passenger cars from the UK into Ireland can claim a preferential tariff rate of 0% under the TCA where they can provide documentary proof that the vehicle is of UK origin. The documentation proving UK origin should be included with the Customs import declaration to allow the vehicle to be released to its owner in a timely manner. The proofs required to claim preferential origin are detailed in the TCA and are the same as the proofs required in other trade agreements that the EU has entered into, and generally come from the exporter, via the vehicle supplier or manufacturer.
There is also a Returned Goods Relief which may be available for second-hand passenger cars if the vehicle was originally exported from the EU to the UK, has not been altered and is being re-imported within three years of export to the EU. There are specific proofs required under the UCC to qualify for the relief from Customs Duty and import VAT. In this regard, Revenue works closely with SIMI and the trade to simplify compliance with the UCC and TCA requirements. Simplified guidelines to the trade are updated regularly on the Revenue website and through Revenue’s direct communication to the trade via eCustoms Notifications.
Proofs for the 0% preferential rate or for Returned Goods Relief may be assessed by Revenue at the point of import or may be checked post-clearance. If the check is undertaken at the point of import, then the vehicles will be held until the necessary proofs are provided. Under EU legislation, post-clearance interventions can be carried out up to 3 years after the importation of the vehicles and importers are obliged to maintain books and records for this period. The proof requirements for both the 0% preferential rate and for Returned Goods Relief have not changed so the importer should have the proofs available to confirm the entitlement to either the preferential rate or to the relief, as appropriate. However, if during the post-clearance intervention, the proofs cannot be provided, then Revenue is obliged under EU law to collect the correct amount of Customs Duty and VAT owed. This is essential to ensure a level playing field for compliant importers but also because 75% of Customs Duty collected is remitted to the EU and Ireland is audited on an annual basis to ensure that it is carrying out this function effectively and that it remits the correct amount of Customs Duty to the EU.
The guidance on the Revenue website has changed in relation to the simplified Supplementary Import Declaration (SID) which was required for some vehicles imported via Northern Ireland. Since 1 May 2023, the UK Government has introduced a new scheme – known as the Second-Hand Motor Vehicle Payment Scheme (SHMVPS) – which replaces the Margin Scheme for second-hand vehicles that dealers buy in Great Britain, move to Northern Ireland, and then resell. When the Windsor Framework was announced on 27 February 2023, the UK Government’s guidance material on the Framework referred to the SHMVPS. The new scheme allows car dealers who are VAT registered in Northern Ireland and other Member States to reclaim the VAT element of the vehicle cost if the vehicle is purchased in Great Britain and removed or exported from there by the purchaser or by the Great Britain dealer. This means that Irish car dealers will now be in the same position as Northern Irish car dealers when purchasing a qualifying vehicle from Great Britain. The UK Government’s introduction of the SHMVPS from 1 May 2023 and winding down of the previous margin scheme arrangement by 30 October is very welcome as it will unwind the tax avoidance risk created by their previous approach and as a result a SID will no longer be necessary. Guidance material on this issue will be published on the Revenue website shortly.
Comprehensive information on the importation of vehicles from the UK to Ireland, including reliefs from duty and import VAT, is available on the Revenue website at www.Revenue.ie. In addition, Revenue’s Import Policy Unit can be contacted by emailing importpolicy@revenue.ie .
