Importing vehicles from Great Britain and Northern Ireland

VAT implications of importing vehicles from Great Britain and Northern Ireland

New vehicles brought into the State from another European Union (EU) Member State and from Northern Ireland (NI), are subject to Value-Added Tax (VAT). A new vehicle is one which is 6 months old or less, or has travelled 6,000 km or less. The VAT is normally payable at registration in the State. Further information is available at Acquisitions of new means of transport from other Member States.

New vehicles brought into the State from outside the EU are subject to VAT on import and will not be liable to a further VAT charge at registration.

For Business to Business sales:

• used vehicles which are qualifying vehicles for VAT purposes
• and
• are zero rated by the dealer in NI
• or
• on export from Great Britain (GB)

may be treated the same as previously.

This means that the dealer in the State will complete an import declaration and can opt to account for VAT on import on a postponed accounting basis. This allows the dealer to account for the VAT at import in their normal VAT return and take a simultaneous input VAT deduction.

When the vehicle is sold, the dealer accounts for the VAT at that stage, but must charge VAT at 23% on the full value of the sale (excluding Vehicle Registration Tax). In this way, VAT liability will only arise when the vehicle is sold.

Private imports are subject to VAT at import which will be charged at the standard rate, currently 23%, on the customs value of the vehicle. Usually this will be the purchase price, plus the cost of transport and insurance, plus any Customs Duties payable. For further information, please see Customs valuation.

The United Kingdom (UK) has introduced legislation to provide for the Second-Hand Motor Vehicle Payment Scheme (SHMVPS). The new scheme will allow car dealers who are VAT registered in NI and in EU Member States to reclaim the VAT element of the vehicle cost:

• if the vehicle is purchased in GB
• and
• removed, or exported, from there for resale in NI or an EU Member State.

The new rules apply from 1 May 2023 and claims can be made from August 2023 onwards. Detailed guidance is available from His Majesty's Revenue and Customs (HMRC).

Next: Registering a vehicle purchased in Great Britain (GB)