Introduction
by Tim McCarthy
 
 

Firstly and most importantly can I wish you a happy, safe and peaceful Easter.

 

I hope that you are getting the benefit of the extraordinary times that we are all living through, to achieve goals and interests with your family that you may not have been able to accomplish before.

 

The articles that we have included in our newsletter for this quarter are subjects that we have focused on, that are topical at the moment and which are based on feedback and questions from our clients. We hope that you find these articles interesting and of relevance to you and your business.

 

As always if you have any queries or questions on any topic please contact any member of the team at Quintas.

 

Happy Easter, I hope we get some sunshine over the weekend and that you get to take advantage of this break for some downtime.

 

Regards

 

Tim McCarthy


 
 
 
Negative Interest Rates
by Anne O'Doherty
 
 

The Challenge

 

Deposit rates have been at all time lows for a sustained period and investors are starting to see the effects of this on their annual deposit return statements – which are showing zero!!

 

At the same time we have seen the perfect storm with Covid where customers have been unable to spend on holidays, meals out and in physical retail stores. The graph below shows the net household deposits since 2004, in rolling 12 month periods. You can during the 2000’s there was a strong level of money being put on deposit and then following the financial crash this turned negative as people needed to access their cash deposits – the rainy day funds we so often speak about.

 

 


The Challenge

 

Deposit rates have been at all time lows for a sustained period and investors are starting to see the effects of this on their annual deposit return statements – which are showing zero!!

 

At the same time we have seen the perfect storm with Covid where customers have been unable to spend on holidays, meals out and in physical retail stores. The graph below shows the net household deposits since 2004, in rolling 12 month periods. You can during the 2000’s there was a strong level of money being put on deposit and then following the financial crash this turned negative as people needed to access their cash deposits – the rainy day funds we so often speak about.

 

However you can also see that up towards the end of 2020 we have had the most money deposited in any 12 month period we have on record.

 

 

 

We have seen headlines and spoke about this “wall of money” on deposit for the last number of years and this figure of €100bn of household money on deposit has often been used. However this figure of €100bn has been well surpassed at this stage and the latest graph below demonstates how this has now hit €125 billion. There is also approximately another €20bn within Post Offices and State Savings Certs (whose rate of return is being cut also this week). This is a phenomenal amount of funds not working hard enough for your clients.

 

 

A Possible Solution!

 

Unit linked regular savings plans are an excellent way for clients to gradually drip feed into the markets to benefit from potentially greater returns over the medium to long term. There are numerous muti-asset funds available to suit every risk profile and the benefit of Unit Cost Averaging in dampening volatility is also a huge advantage to this gradual approach.

 

These unit linked regular can be set up personally or  through a company as corporate savings plans. The main goal of such a savings strategy is to garner a better return than available through the deposit channels we have outlined above.

 

In demonstrating the effectiveness of monthly savings plan to dampen the volatility and riskiness of markets I have also used 2020 as the perfect example. If a client had €6,000 to invest at the start of 2020 they could have invested it as a lump sum or saved it as €500 a month over the course of the year. Despite an incredibly volatile year, thankfully, both methods of investing gave positive returns but the journey was very different.

 

 

 

The gradual savings strategy on the right hand sides leads to a much smoother customer journey in volatile markets.

 

 

In Summary:

 

In last 12 months Irish Households have saved on deposit almost as much as we did in  5 years of the SSIA campaign back in the 2000’s. These funds aren’t getting any sort of real return for your clients and Quintas Wealth Management would love to support you in addressing this.

 

Please feel free to contact me to discuss if you need any further information.

 

Anne O'Doherty

021-4641480

aodoherty@qwm.ie

 
 
 
Ulster Bank Customers – what to do now?
by Mark Ryan
 
 

In late February Ulster Bank announced that after 160 years they are exiting the Republic of Ireland. This will have a significant impact on their 1.1 million customers, 2,800 staff and a loan book of € 20.5 billion.

 

The main point I would like you to take from this article is that your loan with Ulster bank has protections under the Central Bank of Ireland regulations. This means that the new loan owner must honour the terms of that contract. In some cases, the new loan owner will try to find a way out of this obligation but I deal with this scenario in more detail below.

 

 


I would also like to empathise with the thousands of employees who work for Ulster bank and who have been impacted by the announcement that the bank is exiting the Irish market after over 160 years. Some of these employees would be family members and friends of mine so it is a tough time for anyone connected with the bank.

 

Unfortunately, the story of Ulster Bank ceasing their business in Ireland has been rumbling along since the banking and economic crash of over 10 years ago now.

 

In addition to the concern of their employees this decision to exit the Irish market will have a significant affect on customers of the bank.

 

At a basic level and just from an administration perspective this will mean moving their day to day affairs to another bank. I would take a more strategic view when making this decision rather than just move to the easiest option (AIB/BOI/PTSB/KBC etc). Each bank would have different incentives for new customers, fees structures, banking online apps, terms, and conditions etc so it is well worth taking your time making this choice.

 

It looks like the breakup of the Ulster bank will be split into several parts. The vast majority of the performing loans section will be moving to AIB and PTSB. The non-performing loans will be sold to investment banks or Vulture funds to give them their more familiar title.

 

Regardless of who a customer’s loan is sold to, the new owner must still follow and comply with all of the regulations and protections that are set out by the Central Bank of Ireland

 

For the purposes of this article I will give you an idea of some of the calls and enquiries that we have been getting prior to and following the official announcement confirming the Ulster bank exit.

 

Although certain loans will have different protections and procedures that need to be followed (home loan, residential property loan, commercial loan, personal loan etc) I am writing this article under the following scenarios:

  1. The Loan is fully up to date and no arrears at any stage – there will be no issues here as the new bank must honour the original agreement and the contract that was sanctioned and signed with the customer,
  2. The Loan had fallen into arrears and a restructure or discussion is in progress with Ulster Bank – the customer is entitled and should be encouraged to complete these discussions and the restructure where possible in advance of the formal sale of the loan by Ulster,
  3. The Loan is unsustainable, and no restructure is possible – it is highly likely that this loan will be sold to a vulture fund. Settlement discussions can continue to be had with Ulster prior to the transition to the new loan owner.
  4. Read the small print – in some existing loan agreements that on paper are fully up to date there are certain conditions that can allow the bank to review the facility. This could simply be to maintain a certain loan to value %. The new bank may have the option to challenge the sustainability of the loan contract in this case.
  5. Options for non-performing/unsustainable loans - This could lead to the possibility of reaching a settlement with the new loan owner as regards the sale of the property or the possible refinance of same with another bank.

The above points are non-exhaustive and there are plenty of other scenarios that we could outline that might or will occur when the loan transitions to the new loan owner.

 

My advice would be to request a copy of your file from Ulster bank now under the Data Protection legislation.  This is a very simple process, and you are entitled to all of the data that the bank holds on your loan. Depending on the circumstances this can be a substantial file so I would encourage you to read it or ask an experienced advisor to review it for you. There maybe something on your file that is essential when it comes to the negotiations with the new loan owner further down the line.

 

It is best to be prepared for what is coming rather than reacting in 6- or 12-months’ time when the letters from the new bank start to arrive in the post.

 

In a lot of the cases that we look after we would have our review completed and the solution lined up for our client well in advance of the new loan owner taking legal possession of the loan.

 

If you have any questions or concerns, please contact me on the details below.

 

Regards

 

Mark Ryan

Banking and Insolvency Partner – Quintas

mryan@quintas.ie

021 4641400

 
 
 
Brexit Vat Overview: Irish Businesses Providing Services Abroad
by Kevin Canning
 
 

Part 1 of our Brexit Series focuses on Irish Business providing services abroad. For example, this post would be relevant for an accountancy firm like Quintas providing services to a UK based customer.

 

You should note the following in relation to the supply of service as a result of Brexit:


Part 1 of our Brexit Series focuses on Irish Business providing services abroad. For example, this post would be relevant for an accountancy firm like Quintas providing services to a UK based customer.

 

You should note the following in relation to the supply of service as a result of Brexit:

  • Northern Ireland (“NI”) and the rest of the UK are not considered part of the EU for the supply of Services
  • There are no Customs on the supply of services (thankfully for Quintas and other service providers). However, work visas should be considered for business travel.

The following is a summary of the VAT considerations comparing Irish, EU and NI & UK Supply of Services by an Irish business:

 

 

Business to Business (“B2B”) Supply of Services

 

In general, the place of supply for B2B supply of services is where the business receiving the service is located. Using Quintas as an example, this would mean that the place of supply is dependant on where the customer is located. Continuing with this example, the following is an overview of the VAT consequences of supplying services to:

  • Irish Business Customer: Irish VAT applicable

 

  • EU Business Customer: The EU customer would provide Quintas with its EU VAT number. Quintas would quote this number on the Invoice and Zero rate the invoice. The customer is liable to self account for VAT then.

 

  • NI & UK Business Customer: Given that NI & the UK is no longer part of the EU, there is no longer VAT on supply of services to businesses in those countries.  It is similar to Quintas providing a service to a US business customer. Quintas will quote on the invoice “not within the scope of VAT” and not charge any VAT. An important point to note here is that Quintas would need proof that the customer is a business. This does not have to be the customers VAT number but could be proof that the customer has a business website or something similar.

Business to Consumer (“B2C”) Supply of Services

 

In general, the place of supply for B2C services is where the business providing the service is located. Using Quintas again as an example, this would mean that the place of supply is where Quintas is located (i.e. Ireland). Continuing with Quintas as the example, the following is an overview of the VAT consequences of supplying services to:

  • Irish Customer: Irish VAT applicable

 

  • EU Customer: Irish VAT applicable

 

  • NI & UK Customer: Given that NI & the UK is no longer part of the EU, there is no longer VAT on supply of services to consumers in those countries.  It is similar to if Quintas provided a service to a US customer. Quintas will quote on the invoice “not within the scope of VAT” and not charge any VAT. One exception to this rule is the Use & Enjoyment provisions (see details below) which would result in the place of supply being Ireland and therefore Irish VAT being charged.

Use & Enjoyment Provisions

 

The Use & Enjoyment Provisions apply when NI/UK customers are provided with any of the following services and those services are used in ROI:

  1. Hiring of movable goods – goods hired to NI consumer and used in ROI
  2. Hiring out of means of transport – vehicle hire to NI consumer used in ROI
  3. Telecommunications services – radio, television and broadcasting services, telephone cards
  4. Financial services- banking, insurance, reinsurance, money transfer intermediary and financial fund management services.

Please note that the above is provided for informational purposes and should not be considered tax advice. if you would like to speak to Quintas about any Brexit issues, please contact either Kevin Canning (Kevin.canning@quintas.ie) or Dave O’Brien (Dave.obrien@quintas.ie)

 

 
 
 
Brexit Vat Overview: Exports - Irish Businesses Selling Goods Abroad
by Kevin Canning
 

Part 2 of our Brexit Series will focus on Irish Businesses selling goods abroad. Brexit has made this far more complicated than in the past and therefore, we aim to provide an overview of the considerations here.

 

An important point to note in relation to the supply of goods between Ireland and the UK is:  


Part 2 of our Brexit Series will focus on Irish Businesses selling goods abroad. Brexit has made this far more complicated than in the past and therefore, we aim to provide an overview of the considerations here.

An important point to note in relation to the supply of goods between Ireland and the UK is:  

  • NI is considered part of the EU for an initial period of 4 years
  •  
  • UK is not considered part of the EU. Therefore, all supply of goods between the EU & UK are now considered exports/imports

The following is a summary of the VAT & Customs considerations for Irish Suppliers to selling Goods to Irish, EU, NI or UK customers:

 

 

We will use the example of clothing producer (ABC Clothes) to describe the VAT issues for the supply of goods abroad. In this example, ABC Clothes provides boxes of clothes to shops for sale (B2B – Wholesale) and ABC also sells directly to customers through online channels (B2C)

 

ABC’s products are subject to standard rate of VAT when sold in Ireland.

 

Business to Business (“B2B”) Supply of Goods

 

The following are the Irish VAT consequences for ABC wholesale selling goods to businesses:

  • Irish Business Customer: Irish VAT applicable

 

  • EU Business Customer: The EU customer would provide ABC with its EU VAT number. ABC would quote this number on the Invoice and Zero rate the invoice. The customer is liable to self account for VAT then. This would be considered an intracommunity sale for ABC

 

  • NI Business Customer: As NI is still considered part of the EU for VAT on Goods, the same treatment would as an EU customer. Generally, customs will not be considered as NI are part of the EU. However, customs might apply if you are using NI as a vehicle to transport goods to or from the UK (anti-avoidance measures).

 

  • UK Business Customer: Given the UK is no longer part of the EU for the supply of goods, this would be considered an Export and not be included in ABCs VAT return. ABC can zero rate the sale if ABC obtains proof that the customer is in fact a business. This does not need to be a UK VAT number - proof could be as simple as checking the Company has a website or the Company’s House in the UK (UK version of the CRO). Custom declarations and possible custom duties will apply to these transactions.

Business to Consumer (“B2C”) Supply of Goods

 

The following are the Irish VAT consequences for ABC selling goods directly to end consumers (i.e. via a Shopify Store):

  • Irish Customer: Irish VAT applicable

 

  • EU Customer: Irish VAT applicable unless distance selling breached in the other EU country (generally around €75k but varies from country to country). Please note that there is a major overhaul of the B2C VAT rules within the EU coming on 1 July 2021. We will provide guidance on this shortly.

 

  • NI Customer: As NI are still considered part of the EU for VAT on Goods, the same treatment would as an EU customer. The distance selling threshold for NI is £70k. Customs does not apply as NI are still considered part of the EU.

 

  • UK Customer: Given that the UK are no longer part of the EU for the supply of goods, B2C sales of goods to UK consumers is now very complicated and in some cases, not worthwhile. This has become so complicated, that it should be considered on a case by case basis. I have provided more detailed analyses on this below. Please note custom declarations and possible custom duties will apply to these transactions.

B2C - Exporting to the Mainland UK  

 

It is important to point out that I am not a UK tax advisor. I am providing my understanding of the current situation; this does not constitute tax advice.

 

In the case of ABC, the company would have to register for VAT in the UK. It is important to note that distance sales thresholds no longer apply in the UK and therefore most exporters of goods to end consumers in the UK will have register for VAT in the UK regardless of how much UK sales the exporter has. In many cases, this will make it pointless for smaller exporters to sell in the UK.

 

The UK introduced new VAT Rules from 1 January 2021 (in line with rules expected rules to come into effect in the EU on 1 July 2021). There is now a distinction between shipments worth over £135 and under £135 (€150 equivalent). Our understanding is currently:

  • Shipments under £135: Must charge UK VAT at the point of sale (i.e. on a Shopify store) and Irish company would have to register for and pay UK VAT.

 

  • Shipments over £135: Option to either register for UK VAT and charge VAT at the point of sale or rely on a courier/importer (such as DHL) to charge VAT when the item arrives at the customers house – however, there is a commercial aspect here and no customer wants to pay VAT when a delivery arrives at their house. In any case, you may still have to register for UK VAT here.

Further to the above, there is some good news for smaller exporters to sell in he UK via online marketplaces such as Amazon. The new UK VAT rules force online marketplaces to become the person responsible to charge and remit VAT as opposed to the seller. This would apply for selling goods on Amazon UK, however, it should not apply to Shopify Stores even though all stores are bundled together in the Shop app.

 

There is still quite an amount of confusion around the new VAT rules for Irish businesses selling goods to end consumers in the UK. We will provide further updates when available. However, if this affects you, I advise you start thinking about your UK sales strategy. We would be happy to speak to you on this.

Please note that the above is provided for informational purposes and should not be considered tax advice. if you would like to speak to Quintas about any Brexit issues, please contact either Kevin Canning (Kevin.canning@quintas.ie) or Dave O’Brien (Dave.obrien@quintas.ie)

 
 
Brexit Vat Overview: Imports - Irish Businesses Purchasing Goods from Abroad
by Kevin Canning
 

Part 3 of our Brexit Series will focus on Irish Businesses purchasing goods from Abroad. Brexit has made this far more complicated than in the past and therefore, we aim to provide an overview of the considerations here. There is some good news for seasoned imports with the new Postponed Accounting scheme creating a simplifying importing process.


Part 3 of our Brexit Series will focus on Irish Businesses purchasing goods from Abroad. Brexit has made this far more complicated than in the past and therefore, we aim to provide an overview of the considerations here. There is some good news for seasoned imports with the new Postponed Accounting scheme creating a simplifying importing process.

 

An important point to note in relation to the supply of goods between Ireland and the UK is:  

  • NI is considered part of the EU for an initial period of 4 years
  • UK is not considered part of the EU. Therefore, all supply of goods between the EU & UK are now considered exports/imports

The following is a summary of the VAT & Customs:

 

We will use the example of clothing shop (ABC Clothes) to describe the VAT issues for the purchasing of goods from abroad. In this example, ABC Clothes purchases boxes of clothes from wholesalers (B2B – Wholesale) and then ABC also sells directly to Irish consumers through its shops (B2C). The B2C process has not changed and therefore, we will not focus on this here and instead focus on the importing of goods wholesale.

 

ABC’s products are subject to standard rate of VAT when sold in Ireland.

 

Business to Business (“B2B”) Supply of Goods

 

The following are the Irish VAT consequences when the goods are purchased from:

  • Irish Wholesaler: Irish VAT applicable, ABC claims are input VAT credit if fully VATable.

 

  • EU Wholesaler: ABC would provide the EU wholesaler with its EU VAT number and the purchase would be zero rated. ABC would then self account for VAT. This would be considered an intracommunity acquisition for ABC.

 

  • NI Wholesaler: As NI are still considered part of the EU for VAT on Goods, the same treatment would as an EU customer. The purchase would be considered intracommunity acquisition for ABC. However, customs might apply if you are using NI as a vehicle to transport goods to or from the UK (anti-avoidance measures).

 

  • UK Wholesaler: Given the UK is no longer part of the EU for the supply of goods, purchases from Mainland UK would now be considered an Import and not be included in ABCs VAT return. Purchases from the UK would now be considered the same as any other import such as from the US. Previously, ABC would have to pay import VAT at the point of entry and claim the VAT back in their VAT return causing a cashflow issue. However, Ireland has introduced a new “Postponed Accounting” system for all imports. This is discussed further below. Custom declarations and possible custom duties will apply to these transactions.

Old System for Importing:


For an Irish company importing from the US, import VAT was paid at the point of import. This VAT would then be reclaimed in the Irish company’s VAT return as input VAT if the product is sold as a VATable good. This created a cashflow issue for company’s importing goods.

 

New: Postponed Accounting:


Allows for importers to defer paying VAT at the time of import and instead self account for the VAT (reverse charge) when filing their VAT return. This is a major positive for cashflow and possibly the only good thing to come out of Brexit in terms of VAT.

 

Postponed accounting is available to all VAT registered importers. To qualify, companies have to be registered for VAT & obtain an EORI number and will be automatically be entitled to use it. 

 

Please note that the above is provided for informational purposes and should not be considered tax advice. if you would like to speak to Quintas about any Brexit issues, please contact either Kevin Canning (Kevin.canning@quintas.ie) or Dave O’Brien (Dave.obrien@quintas.ie)

 

 
 
 
Brexit Vat Overview: Irish Consumers Buying Goods Online
by Kevin Canning
 

Part 4 of our Brexit Series will focus on Irish Consumers purchasing goods from Abroad. In my experience, most Irish people can relate to the annoyance of ordering goods online only to be told when it arrives at you door that you owe additional money in either Customs or VAT – why is that you might ask?

 

An important point to note in relation to the supply of goods between Ireland and the UK is:  


Part 4 of our Brexit Series will focus on Irish Consumers purchasing goods from Abroad. In my experience, most Irish people can relate to the annoyance of ordering goods online only to be told when it arrives at you door that you owe additional money in either Customs or VAT – why is that you might ask?

 

An important point to note in relation to the supply of goods between Ireland and the UK is:  

  • NI is considered part of the EU for an initial period of 4 years
  • UK is not considered part of the EU. Therefore, all supply of goods between the EU & UK are now considered exports/imports

The following is a summary of the VAT & Customs:

 

 

For an Irish Consumer ordering goods online, the following should be the VAT rules depending on where you order from:

  • Ireland: Normal VAT as if you bought in a shop

 

  • Other EU Country: Irish Customer will be charge other EU country’s VAT rate unless that company sells more than €75k worth of goods in Ireland per annum. If that is the case, Irish VAT will be charged. From 1 July 2021, Irish VAT will be charged all the time.

 

  • NI: Given that NI is still considered part of the EU, the same rules will apply as if NI was still an EU country for Irish customers ordering good from a NI online store.

 

  • The UK: Irish customers will be charged Irish VAT if the value of the goods is over €22. There is no VAT on goods under €22. Whether you pay the VAT on delivery or when you order online depends on seller. Therefore, you should check online when making purchases to ensure Irish VAT has been charged. From 1 July, it is expected that Irish VAT will be charged on all sales. Custom declarations and possible custom duties will apply to these transactions. The delivery company will normally manage the declaration but might request funds from the buyer to cover VAT or duties before releasing goods.

Please note that the above is provided for informational purposes and should not be considered tax advice. if you would like to speak to Quintas about any Brexit issues, please contact either Kevin Canning (Kevin.canning@quintas.ie) or Dave O’Brien (Dave.obrien@quintas.ie)

 
 
Brexit: Customs Overview
by Eddie O'Shea
 

Part 5 of our Brexit Series will discuss an overview of the customs procedures coming in and out of Ireland. It is important to note that Irish customs law is very complex since Brexit. Therefore, please be aware that this article only discusses a general overview and advice should be sought on a case to case basis.

 

Overview – Customs Three Pillars


Part 5 of our Brexit Series will discuss an overview of the customs procedures coming in and out of Ireland. It is important to note that Irish customs law is very complex since Brexit. Therefore, please be aware that this article only discusses a general overview and advice should be sought on a case to case basis.

 

Overview – Customs Three Pillars

 

Origin

  • Origin is the "economic" nationality of goods in international trade and origin of every product is extremely important, this determines possible Duties / charges or any customs restrictions or obligations applicable to goods will depend on their origin.

 

  • The origin of goods is the country where they last underwent a significant transformation. Example: a car part from S. Korea incorporated into a car in Germany origin of car is Germany.

 

  • The origin of goods will determine whether they can benefit from trade agreements and can affect the level of perceived risk and the level of checking and certification required.

 

  • Once goods are cleared for free circulation, their origin ceases to matter, unless they are being re-exported.

 

Classification

  • Product classification is determined by the "Commodity Code" (up to 10 digits) assigned to each item.  There are well over 10,000 codes, and it is still quite difficult at times to precisely categorise a product.

 

  • We use the TARIC system to determine the rules around different products. The system not only gives the code, but also shows the rates of duty, rules and other requirements depending on which country the goods are coming from.

 

  • TARIC website can be found here.

 

Valuation

  • Valuation of goods determines the level of duty and VAT which is applied to each declaration. Important to note that the transactional value includes “product cost, insurance and freight” value.

 

  • The commercial invoice is a vital starting place to support valuation but amendments to the valuation are necessary for currency changes, surcharges or discounts not shown, or anything else that affects the total cost to the buyer.

 

  • Incoterms directly effect a products valuation, as they are the commercial terms which details the tasks, risks and costs involved during the transaction of goods from seller to buyer.

 

Brexit

 

Sadly, for some businesses Brexit will deliver increase costs, delays, customs and possible tariffs along with new cashflow demands.

 

 

Customs Imports

 

Imports into EU

 

Imports in Northern Ireland

No custom requirements if Irish company transports goods directly into the EU. The UK landbridge could cause issues. Potential solutions for these issues would be;

 

- use the new ferry services direct to France,

- apply for customs transit exemption in the UK,

- use the returned goods relief for product traveling through the UK.

 

UK companies transporting directly into the EU are required to complete and file custom declarations.

 

 

Northern Ireland currently are apart of the EU and the UK, so can benefit from custom exemptions.

 

Imports EU (Ireland) to NI

  • No change in protocols, as there is no customs border.
  • Goods traveling via UK landbridge might encounter customs requirements in the UK first.

 

Imports NI/ GB

  • Unfettered access granted under the NI Protocol.
  • Free circulation of goods between NI & UK. But, anti-avoidance rules in place to stop businesses using NI as a vehicle to avoid duties.
  • NI Protocol outlined that goods from UK which are not deemed to be at risk of leaving the UK customs territory will not pay any duties. However, goods ‘at risk’ of entering the EU’s single market will pay EU tariffs.

 

Detailed rules being released in 2021.

       

 

Imports into UK (excluding NI)

 

Customs process has been split into three steps;

 

1) January to March 2021

No requirement to submit full customs declarations for most imported goods. You must keep sufficient records of imported goods and file paperwork and duties after six months.

 

2) April to June 2021

Animal & plant products will now require pre-notification and relevant heath certifications. Reduced physical checks will start to take place.

 

3) July onwards

Full customs procedures to be followed and duty payments to be made. Increased physical checks.

New UK global tariff costs available for imports not qualifying for preferential duties under Free Trade Agreements.

 

Custom Reliefs

 

Below are a list of the common customs reliefs which could help to avoid custom and duty charges,

 

Returned goods relief

 

You can re-import goods into the European Union (EU) without payment of Customs Duty and VAT. These goods:

  • must have been originally exported from the EU
  • can include parts or accessories belonging to other products previously exported.

 

Inward/Outward Processing

 

Exporting/importing goods in order to add value to the product. Processing would mean anything from repacking and sorting to the most complicated manufacture.

 

Transit relief

 

Goods could be exempt from customs when goods are transported from warehouse to warehouse. For example, there would be no UK customs charged on goods travelling from France to England and then onwards to Ireland if the goods are stored in an UK warehouse. Please note, there are certain conditions that the receiving warehouse must abide by, but the relief will help to avoid delays at the ports.

 

What to do now?

 

 

Please note that the above is provided for informational purposes and should not be considered customs advice. if you would like to speak to Quintas about any Brexit issues, please contact either Kevin Canning (Kevin.canning@quintas.ie), Dave O’Brien (Dave.obrien@quintas.ie) or Eddie O’Shea (Eddie.oshea@quintas.ie)

 
 
 
2021 EU VAT One-Stop Shop Rules for E-Commerce
by Adam McCarthy
 

From 1 July 2021 the VAT rules around selling good & services online into Europe will change considerably.  These changes only relate to businesses selling direct to consumers in the EU and does not apply to business to business transactions. Essentially the change is that now the consumer will be charged VAT in the country where these goods are consumed.


From 1 July 2021 the VAT rules around selling good & services online into Europe will change considerably.  These changes only relate to businesses selling direct to consumers in the EU and does not apply to business to business transactions. Essentially the change is that now the consumer will be charged VAT in the country where these goods are consumed. These changes are part of an overall drive by the European Commission to move the VAT system to a ‘destination principle’.  The seller will have to charge VAT in the country where the consumer has bought the goods. While this sounds like a nightmare for businesses – it’s not as bad as first thought. Businesses will not have to register for VAT in each individual country but instead sign up to a One Stop Shop system in Ireland where all the foreign VAT will be paid to the Irish Revenue and the Revenue will send it out to each EU country.

 

The system mirrors the current way of dealing with the supplies of digital services which has been in place since 2015. The new process will include all sales of goods and services over the internet. The new name for this scheme is the One Stop Shop (OSS). At present, distance selling requirements mean that businesses who sell goods in the EU directly to consumers are required to register for VAT in each EU country once they go over a certain threshold. For instance, if a company sells goods online into Ireland the threshold is €35,000. Once the seller goes over this amount they need to register for VAT in Ireland. If they do not breach this amount, they can charge local VAT. This is called distance selling and this method is being abolished from 1 July 2021.

 

In order to ease this administrative burden, the OSS will allow businesses who sell directly to consumers to file one OSS return that declares all EU-wide sales. The seller then remits the VAT due to their home VAT authority, which then forwards the taxes to the appropriate countries. Non-EU businesses can also avail of the OSS and will just need to nominate a single EU state in which to register and file the OSS. The introduction of the OSS scheme means that the “distance selling” thresholds are no longer applicable. The seller will still be required to file a domestic VAT return in their home country alongside the OSS return. There is also an exemption from registering for OSS for small businesses where their EU sales for the year in total are under €10,000

 

Non-EU Seller

 

Sellers who are not EU resident are also entitled to use the OSS scheme. All they need to do is register as a “non-union” business in any EU member state of their choice. They will then be able to file an OSS return the same as any other “union” business. They will also be required to file one domestic VAT return alongside the OSS return in any EU member state of choice.

 

The above “non-union” OSS scheme applies to the UK as they are no longer part of the EU. Therefore, a UK entity will need to comply with the “non-union” rules in order to avail of the OSS scheme

 

Import One Stop Shop (IOSS)

 

Currently, goods imported into the EU with a value of less than €23 are exempt from VAT. This ends 1st July 2021, and all imports will be subject to EU VAT. This IOSS scheme is specifically available for the sale of goods not exceeding €150 in value from businesses outside the EU to buyers inside the EU. The scheme operates by allowing the seller to charge and collect VAT at the point of sale and then declaring and paying that VAT to the appropriate Member State via an IOSS return. Therefore, by using the IOSS scheme there is no VAT charged at the time of importation. If the value of the goods exceeds €150 then the traditional import rules apply.

 

Businesses established in EU member states can also avail of this scheme by applying to register in their own member state.  Again, for the purposes of the IOSS scheme any UK business will be regarded as “non-union”

 

If you would like to discuss the applicability of either of the above schemes for your business please feel free to contact Dave O’Brien (Dave.obrien@quintas.ie), Kevin Canning (Kevin.canning@quintas.ie) , Adam McCarthy (Adam.mccarthy@quintas.ie) or Kyle Baxter (Kyle.baxter@quintas.ie).

 
 
 
Quintas News
by Emma Kelly
 

Quintas are taking on a 40 day step challenge. We have all been hard at work over the past 2 weeks with 6 million steps reached so far! Go Team Quintas!

 

 

We would like to take this opportunity to welcome Paul Ray who recently joined the Quintas team as a trainee accountant. If you ever wondered what the journey is like from a trainee to a fully qualified account here at Quintas, Jennifer Kelly has wrote an article on the subject which you will find here.

 

Ciarán Geary has also joined the Quintas team from Munster Technological University for his work placement. 

 

Our staff like everyone, have been trying to get out and get some fresh air especially now spring has sprung and the sun has started to shine. One staff member Catherine Caplice was out and about and managed to capture this picture. Can you guess which famous cork landmark this is?