There are many effects of Brexit that are constantly emerging and will continue to evolve in the coming years.
With the special rules that apply to Ireland and Northern Ireland, it is especially important for Irish businesses to be capable of dealing with any such measures as they arise.
One such aspect is the Postponed Accounting for VAT facility that the Irish Revenue Commissioners allow to be applied to imports from all ‘third countries’, i.e. non-EU countries, to ease the VAT burden associated with Brexit. To make things even more complex, Postponed Accounting for VAT applies to GB transactions but not to Northern Ireland transactions.
Teamsoft can help you deal with issues such as these in the SAP Business One ERP system that is built to work in a changing world.
What is Postponed Accounting for VAT and how does it work?
Postponed Accounting allows for VAT on imports to be included on a company’s VAT return rather than having to pay it immediately on point of entry. This neutralises the cash flow cost that would otherwise arise.
VAT on Postponed Accounting transactions can be dealt with under the Reverse Charge procedure. The facility can be applied to imports from all ‘third countries’ including Great Britain (UK excluding NI – different rules apply to NI).
There is a requirement to identify the value of goods imported under Postponed Accounting on the VAT 3 and VAT RTD returns to the Irish Revenue Commissioners. It is recorded on your VAT return as VAT which is simultaneously deducted on a purchase and charged on a sale, similar to the way in which intra-community acquisitions are recorded.
Can Postponed Accounting for VAT be dealt with in SAP Business One?
Yes, the flexibility of SAP Business One means you can efficiently take advantage of this cash flow alleviating measure in your business. You can configure items such as VAT Codes and tax reporting to enable you correctly account for postponed VAT in your ERP system.
As measures such as these emerge and change, the configurability of SAP Business One allows you deal with them effectively. This includes any special rules that apply between Ireland and Northern Ireland.
If you need help with Postponed Accounting in your SAP Business One ERP system, or wish to find out more about how Teamsoft can implement this flexible ERP system in your business, contact us today.
Note: This information does not constitute professional financial or legal advice around the correct treatment of VAT. Companies should satisfy themselves about the appropriate application of VAT regulations to their company.