By Caitlyn Buchanan, 17th September 2020 (Updated 18th January 2021)
Covid-19 has been somewhat of a distraction overshadowing the imminent final chapter of Brexit. However, the transition period did conclude on 31st December 2020 and the United Kingdom has officially left the European Union. A last-minute trade deal was reached allowing the open border to remain between Northern Ireland and the Republic of Ireland. Northern Ireland will continue to be aligned with the European Single Market in a limited way.
Approximately 90,000 Irish businesses are expected to be impacted by Brexit. This article outlines some of the important changes and steps Irish Companies must take as part of their Brexit preparations.
Irish Company Director Requirements
For many UK businesses, having an Irish registered company is an ideal solution to maintain operations and trade within the EU. Under company law, Irish Companies are required to have at least one director who is a resident within the European Economic Area (EEA). Now that Brexit is complete the UK (including Northern Ireland) is no longer a part of the EEA.
Please note: Nationality is not taken into consideration, only residency, so even an Irish national director who is a tax resident in the UK will not meet this requirement.
Any Irish company with only UK resident Director/s must have taken one of the following actions before the 1st January 2021 to ensure compliance with the Companies Act 2014:
- Appoint another director who is a resident in the EEA;
- Put in place the Section 137 Revenue Bond; or
- Provide a ‘Real & Continuous Link‘ to the state. Please note this option will require Revenue approval and several Irish-based employees.
Company Bureau can assist you to implement the required action for your company whether you need to add a company director, organise an Irish resident director or secure a Revenue Bond for Irish Companies preparing for Brexit.
If you are a trader who imports or exports goods into or out of the European Union, you will need to obtain an Economic Operators Registration and Identification (EORI) Number. This Brexit preparation applies to both Irish and UK traders who trade with each other will need to apply for an EORI number prior to Brexit. An EORI number is valid throughout the EU and used as a common reference number for interactions with the customs authorities in any Member State. Irish Revenue uses the number to identify businesses or individuals and collect duty on goods.
If the business was previously registered for Customs and Excise (C&E), it may already have been allocated an EORI number. Some traders may have also been automatically registered for an EORI number by Revenue. Before applying for the EORI number you should check if you were automatically registered on the Economic Operator Identification and Registration system. Search “IE” followed by your VAT/Tax Registration number.
If a number has not been automatically allocated you can apply for an EORI number on Revenue’s EORI online registration service through ‘My Account’ or ‘ROS’.
New National Import System (AIS) from November 2020
The new Automated Import System (AIS) will replace the existing systems for businesses that import goods from outside the EU from November 2020. The existing Automated Entry Processing AEP and eManifest import systems will be replaced. This new AIS System will ensure that businesses can legally import goods from outside the EU using efficient processes. This will significantly change the structure and content of the import declaration by introducing new electronic message formation as well as new data fields.
Businesses will need to ensure their current software systems are updated to meet the change in requirements. Be sure to liaise with your IT team or external systems provider to make the necessary arrangements. Full technical details and Guidance are available on the Revenue website. Additionally, those using a customs agent will need to contact them to ensure you are both prepared for the changes in procedures. For example, importers will need to lodge import declarations using AIS and determine the collection of information required by the new data fields.
From November 2020 it will no longer be possible for businesses to import goods from outside the EU into Ireland using old systems. The AIS system will need to be implemented to ensure businesses are ready for the changeover. Staff will also need to be familiarised with the content and structure changes of the new declaration.
Irish Businesses Must Claim 0% Tariff On UK-Origin Goods
The Minister of State for Business, Employment and Retail has urged businesses, and SMEs to actively claim the zero-tariff rate on UK origin goods. The EU-UK Trade and Cooperation Agreement (TCA) states that tariff duties are eliminated for trade between the EU and the UK when rules on origin are met. This zero tariff rate applies to goods imported goods from the UK when the following “rules on origin” are met.
- Irish importers must claim the zero rate on their import declarations.
- Irish Importers must obtain a ‘Statement on Origin’ from the UK supplier. This statement may be on an invoice or other document or record that clearly identifies the product.
Non-EU goods coming through the UK into Ireland may be subject to tariffs as well as UK goods which exceed permitted levels of non-EU content. Workshops on Customers Training, mentoring and financial support is available through the Local Enterprise Office.
CE Markings / EEA Address
Many products that are sold within the European Economic Area (EEA) are required to have a CE Marking. This marking indicates that the product conforms with the health, safety and environment protection standards. After Brexit, UK products sold with Ireland will be treated as those manufactured outside of the EEA and steps will need to be taken to maintain the CE Marking.
Under the regulations, both importers and exporters must indicate the following three elements on its product packaging:
- Their name,
- registered trade name or registered trademark, and
- an EEA address which can be contacted regarding the product.
Post-Brexit a UK based company will be required to have an EEA address on their packaging to maintain a CE Marking for sales within Ireland and the rest of Europe. This address can be that of an authorised representative such as a registered address which Company Bureau can assist you with. There is also a new UK Conformity Assessed (UKCA) Marking which can be used from 1st January 2021 for UK products sold within England, Wales and Scotland only.
Irish Companies preparing for Brexit must have completed the above steps before 1st January 2021. If you have questions about Brexit preparations for Irish companies or if you would like information about forming an Irish Company as part of your Brexit strategy, please don’t hesitate to Contact Us today or call +353 (0) 1 6461625. The Company Bureau team. We would be happy to discuss the options with you in detail.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.