VAT only IP: risks
As with other forms of IP there is a risk that traders may enter goods to ‘VAT only’ IP where there is no intention of processing and re-exporting the imported goods:
- solely to obtain a cash flow benefit, or
- avoid payment of VAT if they are unable to recover the import VAT as input tax.
The same controls and checks for IP goods liable to customs duties and import VAT should be carried out on IP VAT only goods, to ensure goods entered to the procedure are correctly discharged.