VAT at point of Entry, to tape information technology correctly requires that you setup VAT codes in your accounts organisation/bookkeeping software that are separate to postponed accounting for VAT, EU, and Domestic Purchases.

The master reason for these VAT codes is to let you to be able to enter all the related transaction values on your VAT3 and VAT RTD forms for the Revenue Commissioners.

Under Irish VAT law you lot are required that buy invoices be analysed as resale or non-resale transactions. Therefore, you need at least 6 VAT codes. (see note i beneath)

VAT at Point of Entry imports
Resale VAT codes Due northon-Resale VAT codes
POE01R @ 0%
POE02R @ 13.v%
POE03R @ 23%		 POE01N @ 0%
POE02N @ 13.5%
POE03N @ 23%
suggested vat codes and rates

You must apply the VAT code rate applicable had the appurtenances been bought in Ireland.
Your accounts organization will calculate on each net amount a VAT value of Zero on each transaction
e.g. Cyberspace at 23% = Nix value (23% is indicating the VAT rate that would have been used if the goods were bought from an Irish supplier)
You need to be registered for VAT and accept an EORI number.

Duty (it is not VAT)

Duty must be setup as a General Ledger lawmaking, it is a cost to the business concern, it is non reclaimable.
If there is no duty payable on the import, and then the duty amount is zero

VAT at Point of Entry Example:

Invoice- Chinese Supplier
Goods – Internet $20,000
Customs & Excise Exchange Rate used     i.155 (come across note three beneath)
Chinese Supplier cost in EURO
Appurtenances Internet €17,316.02 ($twenty,000 @ 1.155)

Invoice- Freight Company
Service: Freight China to EU Port – Net €4,000
(Freight from EU port to your warehouse is not counted in the adding of Duty)

Invoice- Customs and Excise (see note ii below)
Total charge for Duty calculation €21,316.02 (€17,316.02 + €4,000)

Duty Rate five%                                       €ane,065.eighty (€21,316.02 x 5%) (run into note 3 beneath)
Customs and Excise will consequence y'all with an invoice for the charge (see note 2 below)

Total cost for VAT adding        €22,381.82 (€21,316.02 + €1,065.80) (run into note 3 below)
(see note 4 beneath on total toll calculation)

VAT at 23%                                           €five,147.82 (€22,381.82 10 23%)

Supplier Invoice Transactions Internet and its VAT code analysis

Invoice one. Communist china Supplier Invoice
Cyberspace €17,316.02
Vat Code: POE03R

Invoice 2. Freight Supplier Invoice
Internet €four,000
VAT code: POE03R

Invoice 3. Community & Excise as a Supplier (Total €six,213.62)
Net: Duty Cost €1,065.lxxx
VAT code: POE03R

Vat: VAT at Betoken on Entry €five,147.82
VAT code: POE03R

Supplier Invoice bookkeeping entry

Line GL Lawmaking Cyberspace Vat Lawmaking VAT Corporeality Total
1 Duty 1065.lxxx POE03R 0.00 1065.lxxx
2 Vat at POE 0.00 POE03R 5147.82 5147.82

Information for VAT 3 Return and RTD (Return of Trading Details)

VAT 3

BOX T2 VAT on Purchases

The VAT paid at point of entry is added to the other values hither (VAT on Domestic Purchases and Postponed Accounting)

In this example €5147.82 is our VAT at point of entry amount
(Duty must not be to claimed back. Simply VAT tin can be claimed back)

RTD

BOX R1

Value of Stock for Resale (purchases, Intra-EU acquisitions, Postponed Accounting & imports)

Each transaction increases the value to be placed in BOX R1

  1. Supplier Invoice People's republic of china    €17,316.02 (Goods) (Come across Notation 4)
  2. Supplier Invoice Shipper  €4,000.00 (Shipping cost To Port)
  3. Supplier Invoice Duty     €1,065.fourscore

The three Supplier Invoices brand up the total cost of importing the appurtenances into the EU.

VAT iii Boxes

VAT at Point of Entry €5,147.82 T2

RTD Boxes (All Net of VAT values and in Euro)

Supplier Invoice Net Value €17,316.02 R1
Freight to EU Port €iv,000.00 R1
Duty €1,065.eighty R1

NOTE 1.
Your software may have other features that allow you to analyse transactions as Resale and Non resale purchases or how to transact VAT at signal of entry. We are going with the simplest method here.
If you practise not import goods at 0% or 13.five% and then you may not need to setup those VAT rates. But it is skilful housekeeping to setup all possible VAT codes for consistency and accuracy.

Notation 2.
The Customs and Excise department of the Revenue Commissioners will effect you with an invoice for the VAT and Duty amount, make sure y'all become it. Or your community clearance agent may issue you lot with an invoice and and then pay the duty charge on your behalf.

Yous tin can also run into these invoices using the Revenue On-Line Service (ROS)

ROS screen shot, how to see Duty and VAT as recorded by the Customs and Excise department

NOTE three.
How is the Duty corporeality and the VAT calculated?

Customs and Excise consider the total cost of getting the goods from People's republic of china, Uk, or other Not-European union Countries to a Port in the EU (usually Rotterdam for Chinese imports and Dublin Port for UK imports). This includes all freight toll to get the costs from the Supplier to the EU. It does not include the cost of freight from an EU port to your warehouse or premises.

That cost of the supplier's invoice and the freight costs together is what the duty is calculated on.
The VAT is and so calculated based on the Product Supplier's Invoice value, the Freight Suppliers invoice and the Duty
Value for Duty calculation               Suppliers Invoice + Freight Invoice
Value for VAT Calculation                Suppliers Invoice + Freight Invoice + Duty Amount
All values must first be converted to EURO, if in another currency, using the exchange rate every bit ready by Community and Excise department at the get-go of each calendar month. For customs clearance no other substitution rate can be used. Not your accounts organisation rate, the rate at which you paid for the goods or any other rate you can think of.

Notation iv.
Exchange Charge per unit Problems

Invoice 1. The VAT calculated on $twenty,000 is $2300 (twenty,000 @ 23%)
This is a USD (The states Dollars) amount
This needs to exist in EURO
An issue arises where the Customs and Excise uses a rate of 1.155 and your accounts arrangement uses a charge per unit of 1.170. Then, y'all end upward with two dissimilar values

$20,000 @ 1.155 = €17,316.02
$xx,000 @ one.170 = €17,094.02

There is a difference of €222.00
You lot should talk with your accounts software support department and inquire them how this tin be dealt with. Your VAT at betoken of Entry calculated past your accounts system may not match the Customs and Excise Values. This is really an authoritative issue and generally is not seen as an issue.

Useful Links:

Customs Import Procedures Manual