EU Proposes to Maintain VAT Rules, Exemptions for Trade With Northern Ireland

The European Union on July 31 proposed a measure to continue to apply EU value-added tax rules to Northern Ireland after Brexit. Under the proposal, goods traded between Northern Ireland and the EU would be treated as “cross-border supplies of goods within the EU” and would be eligible for VAT exemptions and deductions. The measure would not apply to supplies of services in Northern Ireland, which will be subject to United Kingdom VAT rules. The European Commission said member states should “rapidly agree to the proposal” to help with implementation before the Jan. 1, 2021, end of the Brexit transition period.