Taxation and Customs Union

Commission proposes to amend VAT rules to accommodate trade with Northern Ireland after the transition period

The European Commission has today proposed changes to the EU’s VAT (value added tax) rules, in preparation for the end of the transition period with the United Kingdom. Today’s amendment to the VAT Directive introduces a special identification number for businesses in Northern Ireland, so that EU VAT provisions can be properly applied to goods, in line with the Protocol on Ireland / Northern Ireland. Under the Protocol, EU VAT legislation will continue to apply when it comes to goods traded in Northern Ireland. This means, amongst other things, that goods sold and transported from Northern Ireland to the EU (and vice-versa) will be treated the same as cross-border supplies of goods within the EU, including for VAT exemptions and deductions. These provisions will not apply to supplies of services in Northern Ireland, which will be subject to UK VAT rules after the transition period. Supplies of goods and services made elsewhere in the UK will also be subject to UK rules for VAT. These changes to the VAT Directive will require some IT adjustments from Member States. Therefore, the Commission is proposing the changes well in advance, so that the VAT provisions in the Protocol are fully operational on 01 January 2021. The Commission encourages Member States to rapidly agree to the proposal, so that it can be implemented as quickly as possible and in any case before the end of the transition period. Work is ongoing on similar legal changes in the field of excise duties. For more information, see: