Revenue has provided guidance on how customs duty and VAT will apply to tractor and equipment imports from the UK after a no-deal Brexit.

Customs duty is chargeable at importation on new and used machines imported from outside the EU by a dealer or private individual, it told the Irish Farmers Journal.

It is charged on the invoice price plus insurance and freight costs. If a used tractor is valued at €75,000 and freight/insurance is €5,000, then duty is charged on €80,000.

The different tariffs that currently apply are available on the TARIC database.

VAT

Post-Brexit, machines purchased from a UK VAT-registered business will be treated as imports. Irish VAT will be chargeable at the time customs duty arises. All EU member states have a general rule that VAT is payable at that time.

However, importers approved for the current deferred payment system can defer payment of certain charges, including customs and VAT, until the 15th of the month following importation.

If a system of postponed accounting for import VAT is introduced for all VAT-registered traders in the event of a no-deal Brexit, then such importers will not pay import VAT at the point of entry but will instead account for it through their VAT return. There will be no cashflow cost for the Irish importer.

Otherwise, they would pay the import VAT and then wait until submitting their VAT return to recover it.

Assuming the UK continues to apply the zero rate of VAT to exports no double taxation will arise, ie a buyer would not have to pay both UK and Irish VAT.

If the Irish-registered buyer purchases a machine from a seller who is not registered for VAT in the UK, no UK VAT will be charged. Irish VAT will be liable.