Restrictions on post-Brexit VAT refunds for British visitors to be relaxed

Restrictions on post-Brexit VAT refunds for British visitors to be relaxed

Proposed restrictions on post-Brexit VAT refunds for goods purchased in Ireland by visitors from Great Britain are set to be relaxed in a bid to support Irish retailers.

Legislation currently being considered by the Oireachtas would have allowed visitors from Great Britain, after the UK becomes a “third country” under EU law, to benefit from a VAT refund when spending over €175.

However, ministers yesterday agreed to a committee stage amendment reducing the minimum purchase threshold to €75 to help support Irish retailers in light of the Covid-19 pandemic.

The €175 threshold was originally proposed due to concerns that Ireland’s proximity to the UK would lead to “abuse” of the VAT retail export scheme, with knock-on effects for retailers.

The scheme does not apply to visitors from Northern Ireland as EU VAT rules on goods will continue to apply north of the border under the Northern Ireland Protocol.

Finance Minister Paschal Donohoe said: “By excluding goods below a certain value threshold from the scheme and requiring proof of declaration of importation into the UK for any goods for which a refund is claimed by a UK-based traveller, it is my intention to ensure that double non-taxation and scope for abuse of the scheme are minimised.

“This amendment is important for retailers, especially those whose businesses are engaged with the tourism sector. The reduction from €175 to €75 retains protections for the Exchequer while also acknowledging the potential impact that not making this change would have on retailers across the island.

“Cabinet has agreed that the qualifying threshold is to be changed via a committee stage amendment from €175 to €75 in recognition of the challenges facing the sector at this time.”

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