What is Postponed accounting
Postponed accounting for VAT means that when a business imports goods from NON EU countries they no longer have to pay the VAT at point of entry into Ireland as long as you follow the rules and do not abuse the system
Before postponed accounting for VAT was announced, goods imported from China by an Irish company would, in order to get access to the goods when they arrived into an Irish port, the company would have to make an import declaration and pay the value of VAT and Customs Duty as calculated by the revenue commissioners. Usually your business would employ a customs clearance agent to prepare and file all the paperwork to have the goods “cleared” through Irish customs.
Your business would have to pay over to the Revenue Commissioners the VAT and Duty amount calculated, and then you could have a carrier take the goods from the port to your warehouse.
Some businesses have “Deferred” accounts with the Revenue Commissioners. This permits them not to have to pay over the VAT and customs duty immediately, but gives them until the 15th of the following month to pay over the VAT and Duty to the Revenue Commissioners.
For both Postponed accounting and deferred accounting you must be VAT registered and have an EORI number.
Postponed accounting is only for VAT
With postponed accounting you effectively do not have to pay over the VAT on imports at any stage. As VAT is reclaimable no matter which way you proceed with VAT at point of entry, the net effect is always zero. Whatever VAT you are due to pay out, you also get to offset against your VAT liability. For postponed accounting for VAT, on your VAT return you will record a VAT liable/payable amount and a VAT claimable amount, both the same value that offset each other. You must document his on you VAT return. Read more here about documenting VAT: Postponed Accounting – Procedures relating to the Postponed Accounting arrangements for the importation of goods from Third Countries (revenue.ie)
The effect of postponed accounting for VAT will have a very positive effect on the cashflow of businesses as they no longer will have to pay out VAT at point of entry, but they will still have to pay over the duty amount.
UK and NI
Goods that come form the UK now are liable for VAT at point of entry and this is where postponed accounting for VAT will help businesses who import from the UK. There is no VAT at point of entry for imports from Northern Ireland.
Consumer purchasing from NON EU countries cannot avail of postponed accounting.