The EU should hand back tax payments it would receive on Irish imports from the UK if there’s a no deal Brexit, a leading accountants’ group has warned.

If there’s no deal the EU will get 80pc of the VAT paid by Irish firms on UK imports under WTO rules, the Association of Chartered Certified Accountants (ACCA) said.

The ACCA said this money should be returned to Ireland as part of a support package if no deal arises.

Stephen O’Flaherty, chair of ACCA Ireland, said: “Many people will be surprised that under international WTO rules, imports into the EU from any other international region sees only 20pc being retained by the country of entry.”

“While Ireland was a net benefactor of EU investment during the financial crisis over 10 years ago, with Brexit it now finds itself in the eye of an international storm and the EU must maintain its flexible support.

“It can do this by ensuring that the revenue from UK WTO trade tariffs form an integral part of a far reaching economic support package that can help offset some of the financial upheaval of Brexit on businesses, communities and families.”

Separately, a series of business representative groups have called for a three-month extension for Irish businesses on their import VAT payments. After Brexit Irish firms will have to pay VAT upfront on their imports from the UK, resulting in a new squeeze on cashflows.

Finance Minister Paschal Donohoe has proposed that companies could wait until they make their VAT returns (due every two months) before paying, but business groups Ibec, the Irish Exporters Association, Chambers Ireland and others are looking for three months of grace.

Article Source: http://tinyurl.com/kbwqb42

Source: Practicenet