Ireland & the Single Market post Brexit

CelticRambler

Sam Russell wrote: »

If I buy something on ebay.co.uk that is second hand, and sold by a VAT registered entity, does it attract UK VAT (shouldn't) and does it attract Irish VAT on importation?

I am looking at a car part costing about £200. If it does not attract UK VAT, I could get it sent to a UK address. If it does not attract Irish VAT I can get it sent direct to me.

Otherwise, I will not buy it.

The vatable value of imported items has no relationship to the price paid (or not paid, in the case of personal goods) - it is the importing customs office's estimation of the item's value that counts. Back in the good old days (which the Brexiters have so long wished for) many English people moving to France had to pay import VAT on their personal possesions when crossing the Channel to live their new French Dream. There is, however, an implicit cost-benefit evaluation carried out at the border, e.g. no customs officer is going to try and calculate the value of your well-used Calvin Kleins prior to letting you out of the Red Channel ... but might well slap a charge on the brand new packet stuffed way down in your rucksack.

Sam Russell

CelticRambler wrote: »

The vatable value of imported items has no relationship to the price paid (or not paid, in the case of personal goods) - it is the importing customs office's estimation of the item's value that counts. Back in the good old days (which the Brexiters have so long wished for) many English people moving to France had to pay import VAT on their personal possesions when crossing the Channel to live their new French Dream. There is, however, an implicit cost-benefit evaluation carried out at the border, e.g. no customs officer is going to try and calculate the value of your well-used Calvin Kleins prior to letting you out of the Red Channel ... but might well slap a charge on the brand new packet stuffed way down in your rucksack.

That is the system used for VRT purposes. The car is valued at 'on the market' value and bears little account of the price paid for the car.

So, yes - forget the purchase for the time being.

View

Nody wrote: »

You are targeting a specific country and add on additional cost for goods from them. That is by definition a tariff as you are making it more expensive to buy from a specific country. You can dress it up any way you want but it's still a tariff. It's exactly the same as with EU applying tolls on Chinese steel; the companies can simply buy from somewhere else but that does not make it any less a tariff and yes it would be struck down by ECJ as the Irish government overstepping their role. Everything else you write is purely your justification but at the core what you are doing is making it more costly to import from a specific country and that's a tariff no matter how you try to claim it's a tax instead or they got other options etc.

First up, you are making the major assumption that the CJEU would have jurisdiction on this when there is no obvious reason why a corporate tax matter - a domestic matter - falls under the competence of EU law. We are perfectly entitled to set our own corporate tax rates as we so loudly and frequently insist. Equally, you are ignoring the example of VRT where renaming an import levy on cars and calling it a registration tax meant there was no problem with VRT under EU law even though both apply to the value/price of the imported car.

Second, your analogy with Chinese steel doesn’t work. The additional corporate tax would not apply because the parts are German or Japanese (ie their origin). It would apply because of how they are routed while being supplied to Ireland. It would only apply if a supplier is basically being pig-headed and insisting on acting in a manner that would ensure additional costs to the end consumer here as a result of their routing decisions.

Third, it is very simple to write the law in such a way that it applies to profits generated from imports from ALL non-EU countries if those imports are routed in such a way that they incur additional costs to the end consumer here (but not elsewhere in the EU) as a result of being routed indirectly to us through any non-EU country. It would be irrelevant if that non-EU country is Brazil or Britain. Any company wishing to avoid the additional corporate tax merely has to show that their supply chain to us involves no more non-EU countries than, let’s say, Belgium or Sweden and/or additional charges to the end consumer as a result.

A major responsibility of government regulation and one we fall down on is to ensure the smooth operation of the market. Failure to act to eliminate abuses is not in the consumers or taxpayers interests as the example of Anglo-Irish so clearly showed.

VRT applies to all cars from all countries. I think that analogy simply doesn't work when suggested to offer the ability to implement targeted measures.

Nody

View wrote: »

Third, it is very simple to write the law in such a way that it applies to profits generated from imports from ALL non-EU countries if those imports are routed in such a way that they incur additional costs to the end consumer here (but not elsewhere in the EU) as a result of being routed indirectly to us through any non-EU country. It would be irrelevant if that non-EU country is Brazil or Britain. Any company wishing to avoid the additional corporate tax merely has to show that their supply chain to us involves no more non-EU countries than, let’s say, Belgium or Sweden and/or additional charges to the end consumer as a result.

Good luck getting any change then because your definition means not a single car company would fall foul of it. Why is Ireland different compared to Germany? Market size. Why compared to Lithuania? Different geographical location in terms of location of the plant etc. I can make every excuse under the sun why Ireland is not discriminated against and simply picking geographical location or that we don't have a subsidiary there and you can't punish a company on the single market for not having a legal entity there. That's before we start with cooking the books with internal loans etc. to ensure there is no profit to tax.

So instead you've created a completely toothless law that does sod all in reality for car dealers and managed to drive up cost for other companies who are not big enough to dodge and made Irish companies in general less competitive in Europe (remember Irish companies import a whole lot than cars from outside EU and you are now taxing them further than their EU counterparts making them less competitive or they need to spend significant time proving that EU markets are not cheaper).

Sam Russell

The routing might be a competition matter.

For example, by insisting in forcing garages, or the Irish distributer, to purchase from the UK at a significantly higher price than the price charged throughout the EU, and not allow the items to be purchased from within the EU, and specifically the Euro zone, is surely a question that the competition authority should look into with some urgency.

Perhaps Leo Varadker might take an interest.

An Ciarraioch

Meanwhile, the Taoiseach wants European languages to be taught in primary schools, which is the time when acquisition of fluency is generally considered to be highest:

https://www.irishtimes.com/news/education/taoiseach-wants-european-languages-to-be-taught-across-all-primary-schools-1.4462422?utm_source=dlvr.it&utm_medium=twitter

beggars_bush

An Ciarraioch wrote: »

Meanwhile, the Taoiseach wants European languages to be taught in primary schools, which is the time when acquisition of fluency is generally considered to be highest:

https://www.irishtimes.com/news/education/taoiseach-wants-european-languages-to-be-taught-across-all-primary-schools-1.4462422?utm_source=dlvr.it&utm_medium=twitter

what are they going to get rid of to make room for european langauges?
religion - it would be a step in the right direction

Eric Cartman

View wrote: »

No I am not.

If VW or BMW insist on supplying Ireland via their U.K. subsidiaries, they are the ones deciding that the end consumer will have to pay additional costs on those imports, as a result of their decisions.

They both have the option of supplying Ireland via their French subsidiaries (or direct from Germany), this avoiding all additional costs on those import for the end consumer here.

The additional tax would be made on their corporate profits and it would be completely avoidable based on their choice. That is not a tariff or barrier of entry since it is completely avoidable by them based on whether or not they insist on us being subject to the “U.K. tariff” as a result of them insisting that we can only be supplied via the U.K.

tbh , is BMW insist on doing the uk route for supply, I can see more Irish people buying the cars direct from Munich, you can order and collect your car and they give you a German temporary plate and insurance for either 7 or 14 days, you pay a little bit to do it but also save on delivery charges. You'd have to VRT the car yourself when you got back but its a fun way to go collect a brand new car and cuts out any of that Britain middleman craic.

Mercedes already have their parts and distribution here anyway so they're unaffected.

I can see a lot of German brands taking advantage of how slowly the Japanese and Koreans are going to react and putting the cars straight from the vaterland to holland on to that new samskip container route. Could have a nice year of being considerably cheaper than the marques from the east.

An Ciarraioch

beggars_bush wrote: »

what are they going to get rid of to make room for european langauges?
religion - it would be a step in the right direction

In many countries, religion is taught after school by the various priests/rabbis/etc, so better an option.

Datacore

In the end if BMW or VW do that and allow prices to be hiked within an EU and Eurozone market by Brexit, several of their competitors won’t and will take advantage of their inertia and they would likely also soon have a PR and political disaster to contend with.

It’s a small market but their dealer network can provide plenty of feedback and sales would drop.

L1011

Certain brands in Ireland are represented by private distributors who may be sub-contracted from a UK distributor - even a company with a name like "[BRAND] Ireland" may be privately held and imported, e.g. Toyota Ireland.

A fair few are not - I'd be surprised if any of these force you to use UK supply chains, except possibly for RHD parts.

Datacore

I would also suspect many contracts could end up being walked away from due to “Force majeure” or circumstances beyond our control type legal clauses.

There’s no way a U.K. subsidiary could reasonably argue that it has exclusive market territory access here if, due to regulatory and legal jurisdiction changes, it can no longer operate as normal.

It would be no more reasonable than forcing an Italian customer to deal with a US supply chain instead of the German one.

Geuze

rock22 wrote: »

This was apparent before Brexit for many goods. I remember taking up an item, made , from Italy, in Easons which had a Euro price for almost all of the EU and a Sterling price from UK. The Irish price was the Sterling price plus about 40% converted back into Euro. So many supply chains supply Ireland via the UK. I worked in health care and, when the Euro was introduced, asked a supplier to guarantee we would pay the same as all other countries using the Euro. They refused and said we would pay the Sterling price plus .

I get the feeling there was (and still is?) a lot of this happening in Irish supply chains.

Sam Russell

Geuze wrote: »

I get the feeling there was (and still is?) a lot of this happening in Irish supply chains.

Before we joined the EU, Ireland was treated as the sub office of the Liverpool office as it was considered a tiny market of no consequence.

Currently, Ireland has a larger GDP per person than the UK.

Why would a supplier based within the EU zone, export product out of the EU, with the price converted into GBP, only to re exported back into the Eurozone suffering another conversion? It can only up the price the customer pays for no benefit.

CelticRambler

Sam Russell wrote: »

Why would a supplier based within the EU zone, export product out of the EU, with the price converted into GBP, only to re exported back into the Eurozone suffering another conversion? It can only up the price the customer pays for no benefit.

There is a benefit: in a "sealed" chain of distribution, the company makes more money if the customer pays more.

Remember there are always two sides to these stories - those who sell and those who buy. Irish customers as a whole have been quite happy to pay UK+ prices for decades in return for ... em ... GB plugs ... English instruction booklets ... things sold in imperial measurements ... stuff that looks like what they see on British celebrity and reality TV.

This willingness to pay more for no real benefit isn't unique to the Irish (the French are very happy to pay three times as much for mediocre as long as someone convinces them it's the best in the world because it's Made in France) - but if the Irish customer base, en masse, doesn't demand European products from European distributors at European prices then the existing hokey-cokey in-and-out supply chain will persist, and Irish customers will pay the price for their own inertia.

First Up

Ireland and the UK were a single market for 60 years. Life (and logistics) were a lot simpler then. Some people are slower to realise that than others

Peregrinus

First Up wrote: »

Ireland and the UK were a single market for 60 years. Life (and logistics) were a lot simpler then. Some people are slower to realise that than others

Ireland and Great Britain were a single market for about a hundred years, from 1926 to 1922. From 1922 onwards there was no single market covering both Great Britain and Ireland until the EU constructed one. The UK has now put an end to it.

Professor Moriarty

Peregrinus wrote: »

Ireland and Great Britain were a single market for about a hundred years, from 1926 to 1922. From 1922 onwards there was no single market covering both Great Britain and Ireland until the EU constructed one. The UK has now put an end to it.

1826?

Peregrinus

Professor Moriarty wrote: »

1826?

Yes, sorry, 1826 (or thereabouts) when the Irish and British customs systems were unified.

First Up

Peregrinus wrote:

Ireland and Great Britain were a single market for about a hundred years, from 1926 to 1922. From 1922 onwards there was no single market covering both Great Britain and Ireland until the EU constructed one. The UK has now put an end to it.

Anglo Irish Free Trade Agreement 1965.

Sam Russell

First Up wrote: »

Anglo Irish Free Trade Agreement 1965.

Which greatly favoured the British side.

I told ya

The OH was in M&S Blanch this morning.

Loads of food items practically being given away. According to the staff there are still delays with the result that when the foods stocks arrive they are almost out of date.

Trying to work around it but nothing in sight yet.

First Up

Sam Russell wrote:

Which greatly favoured the British side.

Actually it started Ireland's economic transformation and the attraction of foreign investment.

View

First Up wrote: »

Anglo Irish Free Trade Agreement 1965.

A free trade agreement does not make a single market.

First Up

View wrote:

A free trade agreement does not make a single market.

True but it was an important step in the journey to Ireland's EU membership and the single market.

Hurrache

I told ya wrote: »

Trying to work around it but nothing in sight yet.

The simple one, and something they should have been doing for years anyway and a reason I don't buy food there, is to start sourcing from Ireland.

Sam Russell

Hurrache wrote: »

The simple one, and something they should have been doing for years anyway and a reason I don't buy food there, is to start sourcing from Ireland.

Lidl give the impression that they source nearly all food from Ireland which they do not.

M&S, on the other hand, give the impression that they source nothing from Ireland which is true. Even the liquid milk they sell is from GB.

I think the presence of M&S on the island of Ireland as a food supermarket are numbered. Maybe a link up with Musgraves might suit them both - perhaps even under the M&S brand.

Kermit.de.frog

Sam Russell wrote: »

Lidl give the impression that they source nearly all food from Ireland which they do not.

M&S, on the other hand, give the impression that they source nothing from Ireland which is true. Even the liquid milk they sell is from GB.

I think the presence of M&S on the island of Ireland as a food supermarket are numbered. Maybe a link up with Musgraves might suit them both - perhaps even under the M&S brand.

That's something I can't understand.

Surely there should be an obligation on the likes of M&S to at least source some things locally if they are going to operate and make money in this market.

Some M&S stuff is good and I use to shop there a bit but seeing all the British flags on everything makes me feel that these guys don't contribute to supply chains in this economy like they should.

I don't think it's anti free market to insist sourcing a certain percentage from this market particularly basics like milk, bread etc that support Irish jobs.

Hurrache

They contribute nothing to the supply chain here, they stock their stores directly from trucks from the UK, they don't have any distribution here.

Sam Russell

Kermit.de.frog wrote: »

That's something I can't understand.

Surely there should be an obligation on the likes of M&S to at least source some things locally if they are going to operate and make money in this market.

Some M&S stuff is good and I use to shop there a bit but seeing all the British flags on everything makes me feel that these guys don't contribute to supply chains in this economy like they should.

I don't think it's anti free market to insist sourcing a certain percentage from this market particularly basics like milk, bread etc.

That is the problem with M&S. They are a British operation, or perhaps it should be a BRITISH operation. To them Dublin is just the same as Halifax - everyone here loves British sausages, and British bacon, etc. Just to emphasise it, they put a GB flag on everything. Tone deaf.

It would probably be against the SM. Didn't Guaranteed Irish run into trouble over something like this.

Peregrinus

Sam Russell wrote: »

That is the problem with M&S. They are a British operation, or perhaps it should be a BRITISH operation. To them Dublin is just the same as Halifax - everyone here loves British sausages, and British bacon, etc. Just to emphasise it, they put a GB flag on everything. Tone deaf.

It would probably be against the SM. Didn't Guaranteed Irish run into trouble over something like this.

The consumer can of course prefer locally-sourced goods over imported goods (or the reverse; I want my parmesan cheese to come from Parma, dammit!).

And there's nothing to stop, e.g. a supermarket chain promoting Irish produce.

But the state can't run or fund a "Buy Irish" campaign, or impose an obligation on retailers to stock Irish produce in preference to foreign, or anything of the kind, because that's a state aid to Irish producers, and disadvantageous to e.g. French producers.

Peregrinus

First Up wrote: »

Anglo Irish Free Trade Agreement 1965.

The Anglo-irish Free Trade Agreement did not create a Single Market. It did away with tariffs but that, as the UK is now rediscovering, is a much more limited thing.

L1011

Peregrinus wrote: »

(or the reverse; I want my parmesan cheese to come from Parma, dammit!)..

That's a difficult demand, as the PDO is named after both Parma and Regio Emilia to begin with :pac:

(and it allows two other regions too - https://www.parmigianoreggiano.com/news/parmesan-has-nothing-to-share-with-the-traceability-of-the-king-of-cheeses-parmigiano-reggiano-pdo/)

Peregrinus

L1011 wrote: »

That's a difficult demand, as the PDO is named after both Parma and Regio Emilia to begin with :pac:

(and it allows two other regions too - https://www.parmigianoreggiano.com/news/parmesan-has-nothing-to-share-with-the-traceability-of-the-king-of-cheeses-parmigiano-reggiano-pdo/)

I'm aware of that. But I could still have a preference for cheese actually produced in Parma and, if I had that preference, I could e.g. research artisanal dairies located in Parma itself and buy only their produce.

My point is that it's fine for consumers to have, and act on, whatever preferences they like in this regard. Member states, not so much.

completedit

Peregrinus wrote: »

The consumer can of course prefer locally-sourced goods over imported goods (or the reverse; I want my parmesan cheese to come from Parma, dammit!).

And there's nothing to stop, e.g. a supermarket chain promoting Irish produce.

But the state can't run or fund a "Buy Irish" campaign, or impose an obligation on retailers to stock Irish produce in preference to foreign, or anything of the kind, because that's a state aid to Irish producers, and disadvantageous to e.g. French producers.

Czech Republic are trying to introduce a quota over there. Not sure how they think it will work.

Kermit.de.frog

Peregrinus wrote: »

The consumer can of course prefer locally-sourced goods over imported goods (or the reverse; I want my parmesan cheese to come from Parma, dammit!).

And there's nothing to stop, e.g. a supermarket chain promoting Irish produce.

But the state can't run or fund a "Buy Irish" campaign, or impose an obligation on retailers to stock Irish produce in preference to foreign, or anything of the kind, because that's a state aid to Irish producers, and disadvantageous to e.g. French producers.

The UK is outside the EU now.

Does not that change things?

I find it unbelievable that a major chain like M&S can operate here - put other smaller Irish retailers out of business - and ON TOP of that not even stock a sandwich with so much as one filling sourced in Ireland.

That's wrong in my view.

completedit

Kermit.de.frog wrote: »

The UK is outside the EU now.

Does not that change things?

I find it unbelievable that a major chain like M&S can operate here - put other smaller Irish retailers out of business - and ON TOP of that not even stock a sandwich with fillings sourced in Ireland.

That's wrong in my view.

What about those employees who work in the shops?
M&S give us more variety, they promote competition and the consumer benefits through lower prices and more options. If British consumers adopted your attitude then what would our farmers do with their excess produce?

It does seem a bit weird that a store can operate in a country with so little Irish input but they pay rents, pay wages and create other value.

Kermit.de.frog

What about them?

If M&S are making money here and they are - they can bloody well start helping our agri sector here.

Instead of stocking the shop with UK flags.

Not right.

completedit

Kermit.de.frog wrote: »

What about them?

If M&S are making money here and they are - they can bloody well start helping our agri sector here.

Instead of stocking the shop with UK flags.

Not right.

In the context of Britain no longer being an EU member, I agree.

Larbre34

completedit wrote: »

What about those employees who work in the shops?

Tough. Ideally, increased custom in other retailers would create work for them.

I'm making a deliberate effort to avoid British retailers, then manufacturers and other businesses.

I will buy Irish first, then other EU nations produce after that. If I can't get something to suit, I will look at brands from Countries that the EU has a positive and mutually beneficial trade relationship with.

Kermit.de.frog

completedit wrote: »

In the context of Britain no longer being an EU member, I agree.

We shouldn't accept this.

This is a small market and the likes of M&S are putting small Irish retailers out of business while not contributing at all to our supply chains - which they put at risk.

That's Irish jobs, Irish income lost, not gained - going to UK producers exclusively.

Anyhow they are out now so it's time to do something about it.

Peregrinus

Kermit.de.frog wrote: »

The UK is outside the EU now.

Does not that change things?

No.

Because a "Buy Irish" campaign or a "Buy Irish" requirement doesn't just disadvantage UK producers/retailers; it disadvantages producers/retailers in all countries that are not Ireland, including the other member states.

The government could have a "Buy European" campaign/requirement. But:

1. That would mean that food produced relatively locally (e.g. in Wales) was disadvantaged by comparison with food that might be produced much further away (e.g. in Greece), have a much greater carbon footprint, etc.

2. A "Buy European" campaign disadvantaging UK produce relative to EU produce might be contrary to the level playing field provisions of the EU/UK TCA. (I haven't looked into this, but it's certain something that would need to be checked.)

But I suspect the problem will solve itself. M&S's business model for the grocery side of the business is a really poor fit with those of its stores that are no longer in a single market with the M&S suppliers. I suspect that in the medium term they will either (a) change the business model for grocery sold outside the UK; (b) discontinue the grocery business outside the UK and just run clothing stores; or (c) sell their stores outside the UK.

First Up

Peregrinus wrote:

The Anglo-irish Free Trade Agreement did not create a Single Market. It did away with tariffs but that, as the UK is now rediscovering, is a much more limited thing.

I mentioned it because it was an important strategic move by the Irish government as a step towards joining the EU long before the single market was created.

It exposed industries that had been protected by tariffs to the realities of international competition. Some failed as a result but it also opened the much larger UK market and kick-started Ireland's strategy of attracting foreign investment. EU membership followed from that.

Great credit is due to those who designed and drove us down that path (against fervent opposition from some quarters).

rock22

First Up wrote: »

I mentioned it because it was an important strategic move by the Irish government as a step towards joining the EU long before the single market was created.

..... EU membership followed from that.

Great credit is due to those who designed and drove us down that path (against fervent opposition from some quarters).

I am not too sure that is what happened.
Ireland, like Denmark, followed the UK into the EEC because we both had a lot of trade with UK and our decision was to follow the UK market.

UK Joining the EEC might have been the best thing England ever did for us.

Peregrinus

First Up wrote: »

I mentioned it because it was an important strategic move by the Irish government as a step towards joining the EU long before the single market was created.

It exposed industries that had been protected by tariffs to the realities of international competition. Some failed as a result but it also opened the much larger UK market and kick-started Ireland's strategy of attracting foreign investment. EU membership followed from that.

Great credit is due to those who designed and drove us down that path (against fervent opposition from some quarters).

It was an important strategic move etc etc.

But it wasn't a precursor to our decision to join the EU. Rather, it followed on from that decision, which had already been taken. We had already applied, along with the UK, in 1961. The Anglo-Irish Free Trade agreemen was seen as a start to the kind of economic integration that common EEC membership would entail.

But, my point is, that wasn't a single market, or anything like one.

First Up

Peregrinus wrote:

But it wasn't a precursor to our decision to join the EU. Rather, it followed on from that decision, which had already been taken. We had already applied, along with the UK, in 1961. The Anglo-Irish Free Trade agreemen was seen as a start to the kind of economic integration that common EEC membership would entail.

That's what I said.

It was set out as far back as 1958 in the 1st Programme for Economic Expansion (TK Whitaker take a bow).

CelticRambler

Kermit.de.frog wrote: »

This is a small market and the likes of M&S are putting small Irish retailers out of business while not contributing at all to our supply chains - which they put at risk.

Oh dear ... have you learnt nothing from history? This is the "German Bankers" argument all over again.

M&S are not putting Irish retailers out of business - they would not be in Ireland (or France, or Czechia) if they didn't think there were enough customers in those countries to buy enough of their British produce. So if anyone is putting small Irish retailers out of business, it is Irish customers choosing to support a foreign company selling foreign products.

Probably the same Irish people who willingly took out massive loans from German banks to out-bid other Irish house-buyers in a mad rush to drive property prices way over the EU average.

First Up

It will be interesting to watch. M&S's European business model depends on the sort of seamless distribution only possible in a single market. Their shops in Ireland and elsewhere in the EU are already noticing the difference.

I wonder if many M&S employees voted for Brexit.

Peregrinus

First Up wrote: »

It will be interesting to watch. M&S's European business model depends on the sort of seamless distribution only possible in a single market. Their shops in Ireland and elsewhere in the EU are already noticing the difference.

I wonder if many M&S employees voted for Brexit.

The only ones who could vote are the ones employed in UK stores. And those stores, of course, are not affected in the same way.