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.
Il TCA copre diversi settori, oltre agli scambi tra l’UE e il Regno Unito, che si occupano di investimenti, concorrenza, aiuti di Stato, mantenimento di condizioni di parità, pesca e protezione dei dati. Sono stati alcuni di questi settori che si sono rivelati i più difficili da risolvere durante i negoziati.
In che modo il TCA è diverso dall’unione doganale?
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
Il TCA copre anche l’assistenza reciproca in materia di IVA. Queste disposizioni in materia di assistenza reciproca possono incidere sull’obbligo per le società britanniche di nominare un rappresentante fiscale nei paesi in cui è richiesto. Tuttavia, fino a quando gli Stati membri non cambiano formalmente i loro requisiti, è importante che le imprese rispettino i loro obblighi legali nella loro forma attuale.
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.
Vuoi sapere in che modo la Brexit influirà sui tuoi obblighi di conformità IVA? Scarica il nostro white paper sulla Brexit e sull’IVA o guarda il nostro recente webinar Brexit e IVA: proteggi le tue preziose catene di fornitura e riduci al minimo le costose interruzioni per saperne di più.