Brexit transition period
19/01/2021
If you want to apply for a VAT refund, you will need to have a representative resident in the territory of application of the tax who can be held jointly and severally liable in the event of an unjustified tax refund, and there also has to be what’s called reciprocal treatment. Reciprocity is generally considered to apply except for the fact that in the United Kingdom there will be no input or output VAT refunds:
- For goods and services acquired which are not used for business or professional activity.
- For goods and services which are intended for resale.
- For goods and services relating to shows or recreational services.
- For the purchase of a motor vehicle.
- 50% of the input VAT for renting or leasing a motor vehicle.
Consequently, UK operators who pay Spanish VAT have to apply for the refund in Spain using form 361. To do this they need to appoint a representative in Spain to handle the application and be jointly and severally liable for any improper applications.
Similarly, Spanish operators and others established in other EU countries that pay UK VAT should apply for a refund in the UK by appointing a representative in the UK.
Origin of goods
18/01/2021
The agreement in principle between the EU and the UK sets tariffs and quotas at 0% for all goods in import operations between the EU and the UK as long as the rules of origin set out in the Agreement are complied with.
To be eligible for a tariff preference at the time of making the import declaration, a statement on origin has to be made out by the exporter on an invoice or any other commercial document which describes the originating product in sufficient detail for it to be identified, following the text of one of the language versions set out in Annex ORIG-4.
EU exporters wishing to make out a statement on origin must be registered in the EU REX system as per relevant EU legislation (Article 68(1) of Commission Implementing Regulation (EU) 2015/2447).
EU-UK trade agreement
30/12/2020
After intensive negotiations, the European Commission finally reached an agreement with the United Kingdom on 24 December that will govern the future trade relations between the two parties. The draft Trade and Cooperation Agreement consists of three cornerstones:
- A Free Trade Agreement, a new economic and social partnership with the UK.
- A new partnership for the security of our citizens.
- A horizontal agreement on governance, a framework that stands the test of time.
Because the negotiations have been finalised at a very late stage and in order to be able to operate on the basis of the draft Agreement as of 1 January, the Commission has proposed to apply the Agreement on a provisional basis for a limited period of time until 28 February 2021, in the belief that the European Parliament will consent to the final signature of the Agreement before the expiry of the provisional period.
In terms of goods trading, as of 1 January and as a result of the draft agreement, the key piece of news is obviously the ban on the imposition of tariffs. Tariffs and quotas at 0% are established for all goods in import operations between the EU and the United Kingdom as long as the rules of origin set out in the Agreement are complied with.
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