PN 1775 - Relief from Customs Duty and VAT when Transferring Business Activities from a Country Outside the European Community

1. General

Capital goods and other equipment belonging to undertakings established outside the European Community (EC) which definitively cease their activity and move to the State in order to carry on a similar activity here, may be imported free of import charges, subject to compliance with the conditions and procedure set out in this notice.

Where the undertaking transferred is an agricultural holding, its livestock may also be admitted free of import charges.

The exemption does not apply to importations by undertakings established outside the State the transfer of whose business to the State is consequent upon or is for the purpose of merging with, or being absorbed by, an undertaking established in the State, without a new activity being set up. In this context, a new activity must consist of an effective change in the current activities of an undertaking i.e. the new activity must not have been carried out previously by the undertaking already established in the State with which the foreign undertaking has merged or been absorbed by.

Note: The exemption applying to capital goods and to other equipment does not extend to VAT in the case of:
a. persons engaged in a liberal profession, provided such persons are authorised to engage in their profession in the State; and
b. bodies engaged in a non-profit making activity who transfer this activity to the State.

2. Definitions

"Import charges" means Common Customs Tariff (CCT) / Customs Duty, charges under the Common Agricultural Policy (CAP) or on processed agricultural products and value-added tax (VAT) chargeable on imported goods.

"Liberal profession" includes professions such as that of a doctor, advocate, notary, etc.

"Undertaking" means an independent economic unit of production or of the service industry.

3. Conditions

  1. Relief is limited to capital goods and other equipment which:
    1. Except in special cases justified by the circumstances, have actually been used in the undertaking for a period of at least 12 months prior to the date on which the undertaking ceased to operate in the country from which it has transferred its activities;
    2. Are intended to be used for the same purposes after the transfer;
    3. Are, in relation to relief from VAT, for use in the State in an agricultural activity or in an activity in respect of which it will be accountable for VAT.  Accordingly, VAT relief will not extend to goods for use in exempt activities such as banking, insurance, medicine, education – further information on exempt activities may be obtained from your Local Revenue Office. Alternatively, a detailed listing of the rates of VAT applicable to your products is available - VAT rates;
    4. Are appropriate to the nature and size of the undertaking; and;
    5. Are imported before the expiry of a period of 12 months from the date when the undertaking ceased its activities in the country of departure, except in special cases justified by the circumstances
  2. In the case of livestock imported by a farmer on the transfer to the State of an activity carried out in an agricultural holding, relief will be allowed provided the livestock were owned by the farmer for at least 12 months or such shorter period as Revenue considers reasonable prior to the importation and are intended to be used for farming after importation and their number is appropriate to the nature and size of the farming enterprise being undertaken by the person in the State.
  3. Capital goods and other equipment which have been admitted duty-free may not be lent, given as security, hired out or transferred, whether for a consideration or free of charge, within one year from the date of importation unless payment of the import charges (other than VAT) has been made. The import charges (other than VAT) payable will be calculated by reference to the rates of duties applying on the date of such loan, giving as security, hiring out or disposal on the basis of the type of goods and the customs value ascertained or accepted on that date by Revenue.

4. Documentary Evidence Required

The documentary evidence required to support a claim to relief from import charges shall consist of –

  1. Evidence of transfer of business activities such as proof of the sale of the undertaking’s premises to show that the undertaking has ceased activity outside the State, proof of acquisition or construction of a permanent business premises in the State, any State or local authority approval or consent relating to such acquisition or construction or the carrying on of a similar activity in the State; or
  2. Evidence that the goods concerned have been used in the undertaking for the specified period such as sales invoices or receipts of purchase (in the case of a motor vehicle the vehicle registration and insurance certificate(s)); or
  3. Any other evidence that Revenue may deem acceptable.

5. No Relief for Certain Goods

Exemption shall not be granted in respect of:

  1. Means of transport which are not used in the production process of the business nor, in the case of a service business, used directly in the provision of the service;
  2. Food supplies of all kinds intended for human consumption or for animal feed;
  3. Fuel and stocks of raw materials or finished or semi-finished products; and
  4. Livestock in the possession of dealers.

6. Relief from Vehicle Registration Tax on vehicles brought into the State on transfer of business activities

Relief from vehicle registration tax will be allowed in respect of motor vehicles being brought permanently into the State as part of the capital goods and other equipment of a business undertaking that definitively ceases its activity outside the State and moves to the State in order to carry out a similar activity here.

The relief does not extend to vehicles brought into the State by business undertakings the transfer of which to the State is consequent upon or is for the purpose of merging with, or being absorbed by, a business undertaking established in the State, in circumstances in which a new activity is not, or is not intended to be, commenced.

Further information regarding relief from VRT may be obtained from the VRT Guide.

7. Procedure at importation

pdfForm c&e 1078 (PDF, 28KB) is to be completed by the importer (owner) of the goods and all the goods, equipment and/or livestock to be imported are to be listed and enumerated thereon and on such additional sheets as may be necessary. The total value, approximately of all the articles enumerated on the list must be shown thereon. The form must be presented to a Revenue official at the time of importation. Where total exemption is not applicable (e.g. where VAT is payable) a SAD (import entry) must also be presented. If more than one importation is required to bring all the goods into the State and if, on the occasion of the first importation, the inventory listing all the goods to be imported is presented, then only a copy of that inventory need be presented on the occasion(s) of the subsequent importation(s). Where the contents of any package listed are not shown on the list, a separate list, signed by the importer, containing such information is to be presented.

The documentary evidence of the transfer of the business activity and use of the goods for the requisite period, as set out in paragraph 4 above, must be lodged with the import declaration(s)/entry.

Part III of Form No. 1078 provides for two declarations to be completed at the time of importation. The first declaration includes a claim for relief from relevant charges in respect of the goods/equipment/livestock being imported and is to be made by the importer or by the person or firm (e.g. Customs Clearance Agent, shipping company etc.) whom the importer has authorised to act on his/her behalf. The second declaration relates to the loading of the vehicle or container in which the goods are packed and is to be completed, except in cases where a SAD is required to be presented, by the carrier of the goods (i.e. by the haulier or transport company responsible for delivering the goods to the place of unloading or by the importer where the goods are packed and transported by him/her).

Where a SAD is presented it should be endorsed along the following lines:

"Exemption from import charges excluding VAT claimed – Capital goods and other equipment (or livestock, as the case may be) imported on a transfer of a business undertaking".

8. Removal for Examination at Owner’s Premises

Except in the case of very small consignments which a Revenue Official is satisfied can be examined at the place of importation, any necessary examination of property imported on transfer of a business activity will normally be carried out, at the written request of the owner or his/her agent at the owner’s premises or other suitable premises where the goods can be fully unloaded from the vehicle or other container in which transported. The importer, or his/her agent, must also make arrangements for the removal of the goods to the place of examination and he/she will be required to pay any expense which arises in connection with the attendance of a Revenue official at such place.

9. Prohibited/Restricted Goods

Certain goods may not be imported/brought into the State or may be imported/brought into the State only under licence. The principal items are firearms, ammunition, explosives, and dangerous drugs, indecent or obscene books. A full list of prohibited and restricted items is contained in the Customs and Excise Tariff of Ireland.

10. Other Legal Requirements

The relief from import charges under the transfer of business provisions does not exempt the importer/owner from compliance with any legal requirement, obligation, restriction or prohibition other than the requirement of paying at the time of importation/transfer the import charges and/or vehicle registration tax which would otherwise be payable on the goods.

11. Transfer of Personal Property

The terms of Notice No. 1875 - Transfer of Residence which relates to relief from Customs Duty and VAT available to individuals in respect of personal property imported/brought into the State on a transfer of residence to the State, are not affected by this Notice.

12. Further Information

Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for your tax affairs.  Contact details for all Revenue Districts can be found on the Contact Details Page.

Customs Division.
Notice No. 1775
June 2011

Legal Disclaimer

While every effort is made to ensure that the information given in this guide is accurate, it is not a legal document. Responsibility cannot be accepted for any liability incurred or loss suffered as a consequence of relying on any matter published herein.

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