Consequences of Brexit for UK based companies supplying goods in the EU
After Brexit happens, the United Kingdom will no longer be a Member of the EU and be considered as a third country from a EU perspective. This means that the UK will be governed by the WTO regulations and will not be part of the EU VAT system anymore. The EU VAT directive will no longer be applicable.
International transactions/Customs obligations
Sales and supplies of goods between EU countries and the UK will no longer be intra EC operations but will be considered as imports and exports. This will imply customs procedures (customs tariffs, customs duties, Import VAT, etc)
UK companies importing goods in the EU will need an EORI number (Customs Identification Number). The GB EORI number will not be valid to import goods in the EU.
In France: import VAT deferment can be requested with the Customs. Once approved, it will allow UK companies to not pay any import VAT. It will be reverse charged in their VAT return.
Changes with the tax obligations
- As UK will not be part of the EU anymore, UK companies will be considered as third company party, which means that UK companies will need to designate a Fiscal representative who will be responsible for filing their VAT refund claims with the French Tax Authorities.
- VIES system will no longer be accessible for UK companies
- B2C Distance Sales: distance sales thresholds will not be applicable anymore as UK will be out of the EU. A UK company will need to import its goods and apply the local VAT rate from the 1st sale.
- B2B Triangulation operations: this simplification will not apply anymorewith a GB VAT number. In the case the UK company is the intermediate, it will need to obtain a VAT number in another EU member State than the supplier or the final customer.
- VAT refund claims : EU Directive 2008/09 will no longer apply, which means VAT refund claims cannot be submitted on HMRC portal. A fiscal representative will be required to submit the claim under the 13th Directive or the company will have to be VAT registered.
- MOSS : the MiniOneStopShop platform will be deactivated in the UK.
UK companies will need to register in another EU Member State in order to declare their electronic sales.
RM Boulanger can assist you with the procedures and registrations to put in place.
Please contact us should you require any further information. We understand this is a confusing period and we will reply to your questions the best we can.