IRELAND. In a surprise development, the Irish government yesterday revealed plans to preserve the duty free shopping status quo between Ireland and the UK in the event of a no-deal Brexit.
The UK is scheduled to leave the European Union at 11pm UK time on Friday, 29 March 2019, though political chaos in the country means that several outcomes are possible. These include a no-deal exit; a second referendum; acceptance (perhaps with tweaking) of the Theresa May-EU agreement; or (increasingly likely) a delay to the whole process.
Duty free shopping between the two countries has been prohibited since the abolition of intra-European Union in 1999. If Britain exits the EU on a no-deal (and therefore is not part of any Customs Union – which it would remain part of on an interim basis under UK Prime Minister Theresa May’s deal), it was expected that duty free shopping between the UK and European Union countries would make an immediate return (or on 31 December 2020 in the event of Brexit transition agreement between the UK and EU being passed in the UK).
However, according to Irish media The Journal, Ireland’s Finance Minister Paschal Donohoe yesterday brought two measures to Cabinet, both intended to preserve the current system in the event of a no-deal Brexit. The amendments will be published tomorrow.
A plague on all your Gombeens’ houses “But the UK is a non-EU country,” complains Dermot. “Doesn’t matter. We’re not allowed to sell duty free to UK-bound travellers. Now if you were flying to Ethiopia you’d be fine, mind.”Click to read more from The Moodie Blog |
ETRC President Frank O’Connell said: “The EU published its position on duty free sales to UK-bound passengers on 13 November – in the event of a hard Brexit, the UK will become a third country, and as a result passengers from the UK to EU countries will be able to buy duty free. This is in line with EU legislation dating back to 1993.
“The Irish Omnibus Bill on Brexit was published yesterday and does not mention duty free specifically. The Journal article refers to two amendments to the Bill which apparently will be published tomorrow. We have not seen them yet.
“We are obviously very concerned of these reports, given the high risk of a hard Brexit, and will be following up with the Minister’s office today.”
A spokesman for Dublin Airport said this morning: “The issue will be raised with Government by representatives of the Irish Duty Free Alliance, which represents the interests of companies that operate in the Irish travel retail sector”.
According to The Journal, the two amendments to be included in the Brexit Omnibus Bill at Committee Stage relate to post-Brexit duty free sales at ports and airports, and the operation of the VAT Retail Export Scheme between Ireland and the UK.
As reported, the Irish Duty Free Alliance has argued that the return of duty free sales between Ireland and the UK could spur an additional €60 million in annual travel retail sales (direct and indirect) from airports and ferries alone and generate 450 jobs. The IDFA also said that such a move would be “effectively cost-neutral for the Exchequer”, though the Irish government contends that its move is necessary to protect Exchequer revenues.
Given that full duty free shopping rights apply for all other Ireland and non-EU routes, it will be interesting to see how the Irish government can legally justify applying the status quo. It is worth noting, too, that UK travel retailers would be able to sell duty free to Ireland-bound travellers. The Moodie Davitt Report is seeking clarification on those points from the industry associations.
