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Indirect Tax Update - Brexit Implications

Indirect Tax Update - Brexit Implications

On 3rd of February 2020 the Tax Authorities issued an announcement with regards to the tax treatment of intra-Community transactions between taxable persons established in Cyprus and taxable persons established in the UK resulting from the exit of UK from EU on 31 January 2020.

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Board Member, In Charge of Indirect Tax Services

KPMG in Cyprus

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Although the UK has formally exited from the European Union from 1 February 2020, the initially agreed transitional period covering the period from 1 February 2020 to 31 December 2020 is still valid. Therefore, any transactions made by a taxable person established in the Republic with persons established in the UK during the transitional period will continue to enjoy the same tax treatment as in force until 31/1/2020.

Therefore, taxable persons who are established in the Republic, will continue to record the value of their intra-Community transactions (dispatching / acquiring goods, making triangular transactions, receiving or providing services) in both the relevant summary table (VIES) and the corresponding Intrastat declarations for arrivals and dispatches, as well as filling in the corresponding boxes of the VAT return.

The same 11-month transitional period applies to taxable persons who provide telecommunications, radio, television and electronic services to non-taxable persons in the UK through the Mini One Stop Shop (MOSS). They will continue to charge UK VAT until 31/12/2020.

After 31 December 2020, unless an extension is granted to the already agreed transitional period, all transactions with the UK will be deemed to be made with a third country.

How can KPMG assist?

Should you like to further discuss the content and potential impact of Brexit for your business, please contact one of our trusted advisors from the Indirect Tax Department at KPMG Cyprus.

KPMG’s Indirect Tax team provides advice and assistance at the Cyprus and international level. We tailored our advisory work to accommodate your specific business issues. We focus in providing value adding and pragmatic advice rather than just outlining a list of recommendations.

Our tax professionals are qualified to review your company’s current tax position and provide relevant advice and planning on a range of indirect taxes, including VAT, customs duties and excise taxes (such as tax audits, reorganizations and acquisitions, etc.). Furthermore, we can help your company with its administrative obligations and interactions with administrative bodies.

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Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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