Sunday, February 5, 2012

V.A.T. - The Retail Scheme for "Tourists"

The Retail Export Scheme
"Tax Free Shopping For Tourists"
With the Recent Changes in VAT Rates
I decided that it is a good time to
return to the very clear rules laid down by
the The Irish Tax Authorities.
 Supplies of goods at a zero per cent rate of VAT

"Goods can be sold VAT-free (zero percent rate) if they are exported by or on behalf of the supplier - that is, where the retailer or VAT refund agent posts or dispatches the goods to an address outside the E.U. This is subject to proof in the form of postal or shipping documents showing that the goods have left the E.U.

If the goods are exported by or on behalf of the tourist/traveller, then the supplier does not have proof of export at the time of supply, and the supply should not be zero-rated. If the supplier nonetheless chooses to zero-rate a sale to a tourist/traveller (for example where payment is by credit card), the supplier must account for the VAT due on the sale in the VAT return for the period following the sale unless, at that stage, he/she is in possession of documentary proof that the goods have been exported.
A supplier who zero-rates a sale, and subsequently accounts for the VAT in the next return may claim an adjustment in the following VAT return to account for this if he/she subsequently receives proof that the goods were exported within the three months limit. It is important to note that the traveller has no liability to pay VAT following a zero rated sale, even if he/she fails to provide the necessary proofs of export. The liability to account for VAT on the sale remains with the supplier, whose entitlement to apply the zero rating to a particular sale is retracted if the conditions attached to the scheme are not complied with."
The Above paragraphs are taking directly from The Legislative document on the Export Scheme for Tourists
As I have family Members with Expertise in this very Area  ... I will be happy to
pass on any questions a retailer may have for clarification