Brexit – Implications for Customs and Indirect Taxation

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A notice to all stakeholders entitled “Withdrawal of the United Kingdom and EU Rules in the Field of Customs and Indirect Taxation” has been published by the European Commission. The notice seeks to examine the implications for Customs and Indirect Taxation when the UK withdraws from the EU and becomes a ‘third country’ on March 30th, 2019.

As expected the notice confirms that goods imported from the UK into the EU and vice-versa, as well as goods in transit, will be treated as importation or exportation of excise goods. Subject to customs formalities and controls, unless there is a transition period stating otherwise, from March 30th, 2019 onwards.

Companies established in the United Kingdom that are carrying out taxable transactions in a Member State of the EU may be required by that Member State to designate a tax representative as the person liable for payment of the VAT in accordance with the VAT Directive.

Taxable persons established in the United Kingdom purchasing goods and services or importing goods subject to VAT in a Member State of the EU who wish to claim a refund of that VAT will no longer be able to file electronically but will instead have to claim in accordance with the previous Council Directive which allows Member States to issue VAT refunds only where there is reciprocity.

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