Depending on the type of goods, as discussed in our Classification article in May, customs duty is generally 0-17% (more for agricultural goods or foodstuff) and import VAT is levied at 23%. This could also be the case for goods brought into Ireland from the UK and Northern Ireland after Brexit.
Many forward thinking businesses have put in place procedures to suspend, reduce or eliminate this additional cost. By doing so they protect themselves from newly introduced customs duties, which could be the case with Brexit and allow themselves to shop around for the most competitively priced goods, without having to rely solely on EU producers in order to avoid paying customs duty.
Special procedures or Customs Procedures with Economic Impact (CPEI) as they were previously known, allow goods to be imported without payment of customs duty and in some cases import VAT. The procedure or combination of procedures that applies, depends on the intended purpose of the goods post import. Activities that can avail of suspension range from; transporting goods across borders (think moving goods from mainland Europe across the UK to Ireland), to the storage and processing of goods.
In most cases prior authorisation from Revenue will be required to avail of Special Procedures but it can be possible to avail of duty suspension for “once off” or occasional imports. In all cases security will need to be provided by way of a bond, however this requirement can be waived if a business is AEO certified. The process of obtaining an authorisation can take a number of months and can vary depending on a number of different elements such as number of locations involved, the goods and the effectiveness of the current customs operating procedures within the business.
Once authorised, the importer is able to import their goods without payment of duties, so the customs duty (and import VAT in some cases, for example Inward Processing or Customs Warehousing) is suspended, pending the use of the goods as set out in their authorisation. This can have the effect of either delaying, reducing or eliminating the payment of duty. How it will operate will very much depend on the type of operation and is best considered as part of an overall duty mitigation strategy.
Revenue are introducing an online facility to submit applications. This commences on 2nd October 2017 and is known as the Customs Decisions System (CDS). This is aimed at streamlining the process going forward and assisting the consultation process amongst other EU member states. Future customs procedures will be completed through ROS and will require businesses and their agents (if completing applications on their behalf) to have a valid ROS certificate.
We encourage businesses to review their supply chains to map out current and future duty points, the potential financial impact of customs and other duties and if required, explore different ways to mitigate their duty costs.
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