The EU-UK Trade and Co-operation Agreement (TCA) was finally agreed on 24 December 2020. A week before the end of the transition period. Fully implemented into UK law, but the TCA remains provisional. It needs to be ratified in the European Parliament. Therefore it applies on a provisional basis until 28 February 2021.
L’ACC couvre plusieurs domaines en plus du commerce entre l’UE et le Royaume-Uni, notamment l’investissement, la concurrence, les aides d’État, le maintien de conditions de concurrence équitables, la pêche et la protection des données. Ce sont certains de ces domaines qui se sont avérés les plus difficiles à résoudre au cours des négociations.
En quoi l’ACC est-elle différente de l’union douanière ?
The TCA provides for trade in goods between the UK and the EU to be on a zero tariff, zero quota basis. However, only if the goods meet the appropriate rules of origin. This reflects the reality that the TCA is not a replacement for the Customs Union. The Customs Union meant that once goods were in free circulation in the EU, they could move from one Member State to another without further payment of customs duty.
The TCA is different, and the origin of the goods is key. There are specific rules on determining origin and a system of self-certification is in place. For example, if goods are of Chinese origin, they won’t be covered by the TCA. So would be subject to whatever rate of customs duty applies in the EU when exported from Great Britain to the EU. This is in addition to customs duty that would apply in the UK based on the UK Global Tariff unless there was the application of an appropriate suspensive relief on arrival into the UK.
Mutual Assistance Provisions
L’ACC couvre également l’assistance mutuelle en matière de TVA. Ces dispositions d’assistance mutuelle peuvent avoir un impact sur l’obligation faite aux entreprises britanniques de désigner un représentant fiscal dans les pays où cela est requis. Cependant, jusqu’à ce que les États membres modifient officiellement leurs exigences, il est important que les entreprises respectent leurs obligations légales telles qu’elles sont actuellement.
Failure to appoint a fiscal representative when required may result in penalties imposed for not trading compliantly. In some cases could interrupt commercial transactions to the detriment of both the company and its customers.
The mutual assistance provisions may also have an impact on the requirement for UK companies to appoint an intermediary for the purposes of the Import One Stop Shop (IOSS). IOSS is proposed for implementation on 1 July 2021. The EU has a mutual assistance agreement with Norway. This means that Norwegian companies don’t need to appoint an intermediary for the purposes of IOSS. It’s hoped that the EU will extend this to companies in Great Britain.
VAT Position of Trade Between UK and EU
The VAT position of trade between the UK and the EU was largely known before the TCA was signed and is therefore not significantly impacted by the TCA. It was the UK ceasing to be a Member State and leaving the EU VAT area which determined the changes.
As a result, many businesses were able to take proactive action rather than awaiting the finalisation of the TCA. If a business did not take action to ensure ongoing VAT compliance, it’s essential to take the appropriate steps now. Furthermore, if businesses had a Brexit action plan, it is imperative that it’s implemented fully to remove risk.
The presence of a Customs border between the UK and EU means that goods cannot flow freely as they did in the past. Taking the appropriate steps to allow the goods to move is not the end of the story. Ensuring VAT compliance once the goods have arrived in the EU is essential. As is recognising that not all Member States have the same requirements.
All businesses should review their current trading arrangements. Business need to ensure they are compliant and also that they’re trading in the most efficient way.
Vous voulez savoir quel sera l’impact de Brexit sur vos obligations en matière de TVA ? Téléchargez notre livre blanc Brexit and VAT ou regardez notre récent webinaire Brexit and VAT : Protect your valuable supply chains and minimise costly disruptions pour en savoir plus.