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:

  • 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)