Impact of Brexit on customs formalities, indirect taxation and excises
On 30 January, the Commission published a notice about the consequences of Brexit on customs formalities, indirect taxation and excises. It confirms that, unless there is a transition period stating otherwise, from 30 of March 2019 onwards, goods imported from the UK into the EU and vice-versa, as well as goods in transit, will be subject to customs formalities and controls. Moreover, a guarantee may be required. It is very likely that a transition period will be agreed between the EU and the UK, in which case, these consequences would not apply.
Authorisations and cumulation
This will also have an impact in terms of authorisations and rules of origin. Indeed, authorisations issued by the UK will no longer be valid in the EU. As for origin, goods originating in the UK that are incorporated in goods exported from the EU will no longer qualify as "originating material”. As a result, EU exporters will not be able to cumulate with goods originating in the UK, therefore affecting the applicability of the EU FTAs preferential tariffs.
Indirect Taxes and excises
Importation of goods from the UK to the EU will be VAT chargeable. Furthermore, UK businesses carrying out taxable transactions in a Member State may be required to appoint a tax representative as the person liable for payment. With regards to excises, excise goods imported from the UK into the EU will have to be released from customs formalities before a movement under EMCS can begin. On the other sense, exports of excise goods from the EU to the UK will require an export declaration as well as an electronic administrative document (e-AD).
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