Given the unique situation facing the Irish economy as a result of the worldwide COVID-19 pandemic, a number of clarifications have been made and relieving measures introduced in relation to VAT, customs and international trade.
Temporary zero rating of supplies of personal protective equipment, ventilators and other medical products
From 9 April 2020 until 31 July 2020, Revenue will allow the application of the zero rate of VAT to the supply to the HSE, hospitals and other health care settings of personal protection equipment and medical equipment for use in the treatment of patients with Covid-19.
Zero rated goods
The zero rate of VAT will apply to the supply and intra-Community acquisition of the goods listed below when supplied to or acquired by the HSE, hospitals, nursing homes, care homes, GP practices and the like, for use in the delivery of COVID-19 related health care services to their patients:
- personal protection equipment (PPE);
- hand sanitiser;
- medical ventilators and specialist respiratory equipment such as respirators for intensive and sub-intensive care and other oxygen therapy apparatus including oxygen tents; and
Supplies of these products to any other operators even if they are intended for onward supply to a health care provider are liable to VAT at 23%.
VAT deductibility entitlement
The entitlement to VAT deductibility of the suppliers of this equipment will not be affected by this relieving measure. Suppliers can continue to deduct VAT on their business input costs in the normal way.
Record-keeping and compliance
The goods being supplied at the zero rate of VAT should be clearly identified and described on the invoice.
In addition to the normal record keeping requirements, suppliers of these goods will need to satisfy themselves that their customer is eligible to receive zero rated supplies i.e. that the customer is directly involved in the provision of health care services to patients and that the goods are for use by the customer in the delivery of those services.
Suspension of import VAT and customs duties on certain medical products
The European Commission have suspended import VAT and customs duties on certain medical equipment by certain bodies. This will last for six months and will also be back dated to 30 January 2020. Authorisation from Revenue is required to avail of this.
While this applies to the importation of finished goods, there is an opportunity for any companies manufacturing these products in the EU and importing raw materials to do so by applying, amending or utilising an existing Inward Processing Relief when supplying to approved bodies and meeting required criteria.
VAT rate on emergency accommodation
The supply of temporary emergency accommodation is exempt from VAT and the Revenue have clarified that the exemption applies to the supply of emergency accommodation to the State/HSE/State Agencies for the purposes of being used as emergency accommodation as necessary to combat COVID-19.
Customs and International Trade
New measures have been recently introduced from a customs and international trade perspective.
Customs Value Authorisations
EU Customs authorities may now authorise elements of the customs value declared by importers to be determined on the basis of specific criteria where certain elements of the customs value are not quantifiable on the date when the import declaration is accepted.
This will lead to a more efficient import process at the point of entry, but increase risk if not managed correctly. Authorisation for this must be obtained from the competent national authorities in advance.
Restrictions on the exportation of medical equipment
This restriction applies to products such as protective spectacles and visors, face shields, mouth-nose-protection equipment, protective garments, and gloves.
In order to export such products, an authorisation must be obtained from the relevant authorities. Without such authorisation, the export of the controlled products is prohibited and this is currently planned to remain in place until the 25th of April. It is proposed that a new regulation will come into effect for a limited period of 30 days (as of 26 April 2020), which will cover protective masks.
Changes to Inward Processing/Customs Warehousing Procedure where products are re-exported
Revenue have provided that where a product has been manufactured in the European Customs Union under Inward Processing, then transferred to a Customs Warehouse and is now being exported from the EU, the export SAD will now need to reference the original Inward Processing procedure, not the intermediary Customs Warehouse procedure.
The Inward Processing authorisation number will now also need to be included on the export declaration.