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Proposal to Extend UK’s Special VAT Measure for Northern Ireland: Council Implementing Decision

  • The document is a proposal for a Council Implementing Decision to amend Implementing Decision (EU) 2021/512.
  • This amendment would authorize the United Kingdom to apply a special measure in Northern Ireland, deviating from Articles 16 and 168 of Directive 2006/112/EC on the common system of value added tax (VAT).
  • The special measure is related to an extension of the authorization.
  • The United Kingdom left the European Union (EU) on 31 January 2020 and is now considered a third country to the EU.
  • From 1 January 2021, EU VAT legislation no longer applies to the United Kingdom.
  • However, Northern Ireland remains under EU VAT legislation regarding goods to avoid a hard border between Ireland and Northern Ireland.
  • For services, Northern Ireland is treated as a third country, along with the rest of the United Kingdom.
  • This leads to a dual or mixed VAT system in Northern Ireland.
  • The United Kingdom requested authorization to continue to apply a measure deviating from Articles 16 and 168 of the VAT Directive on 13 July 2023.
  • The proposal aims to continue applying a special scheme on VAT in Northern Ireland, which provides for flat-rate measures in respect of non-deductible value added tax charged on fuel expenditure in company cars.
  • The United Kingdom has requested to continue the application of the derogation from 1 January 2024 to 31 December 2026.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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