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European Commission proposes to amend VAT rules for Northern Ireland


Tuesday 15th September, 2020

The European Commission has proposed changes to the EU’s VAT Directive rules in Northern Ireland in preparation for the end of the Brexit transition period, according to a news item.

The amendment to the VAT Directive introduces a special identification number for businesses in Northern Ireland, so that EU VAT provisions can be properly applied to goods, in line with the Protocol on Ireland / Northern Ireland.

Under the Protocol, EU VAT legislation will continue to apply when it comes to goods traded in Northern Ireland. This means, amongst other things, that goods sold and transported from Northern Ireland to the EU will be treated the same as cross-border supplies of goods within the EU, including for VAT exemptions and deductions.

According to the EC these provisions will not apply to supplies of services in Northern Ireland, which will be subject to UK VAT rules after the transition period. Supplies of goods and services made elsewhere in the UK will also be subject to UK rules for VAT. These changes to the VAT Directive will require some IT adjustments from Member States.

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