Date: 28 December 2020
In relation to the imminent exit of the United Kingdom (UK) from the EU as of 1 January 2021, the Tax Department issued on 18/12/20 & 22/12/20 a relevant clarification announcement.
The announcement clarifies whether supplies of goods or services made by taxable persons (TP) established in the Republic to TP established in either the UK or Northern Ireland should be included in the VIES table, which is to be submitted for the month of January 2021.
A. United Kingdom (England, Scotland, Wales)
Both supplies of goods and services to TP established in the UK should not be included in the VIES Table from January 2021 onwards. The last VIES Table to include UK VAT registration numbers with the prefix “GB" is that of December 2020.
From 1 January 2021 the acquisition of goods from the UK will be considered as imports from third countries and the acquisition of services will be treated like any other acquisitions of services from third countries.
B. Northern Ireland
Under the Ireland/Northern Ireland Protocol, Union VAT law will continue to apply after the UK leaves the EU only for goods and not for services supplied to other TP established in Northern Ireland (NI). The last VIES table that will include VAT registration numbers of NI with the prefix “IE” is that of December 2020.
Therefore, if TP established in the Republic carries out intra-Community supply of goods to TP established in NI from January 2021 onwards, this supply should be included in the Table VIES with NI registration number with the prefix “XI”. The completion of the INTRASTAT declaration will continue to be submitted as usual.
It is noted that in case where TP acquires goods from NI, will proceed with the usual procedures in relation to intra-Community acquisitions of goods both in relation to the completion of the VAT return and to the submission of the INTRASTAT arrival declaration. In the case of services, the treatment will be the same as when services are rendered by providers established outside the EU.
In INTRASTAT declarations the country code “ΧΙ” must be entered under the Country of Consignment Code (for arrivals) and under the Country of Destination Code (for Dispatches), for transactions in goods with NI. Regarding the Country of Origin Code in INTRASTAT Arrival declarations, if the country of origin is the UK (except NI) the country code to be entered is “ΧU”, whereas, if the area of origin is NI, the country code to be entered is “ΧΙ”.
How can KPMG assist?
Should you like to further discuss the content and potential impact of the Circular to your business, please contact one of our trusted advisors from the Indirect Tax Department of KPMG in Cyprus.
KPMG’s Indirect Tax team provides advice and assistance both at local and international level. We structure our effort to dovetail with your business issues and strategy. Our focus is on supplying value-adding and pragmatic advice rather than just a list of recommendations.
Our tax professionals are able 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, re-organisations and acquisitions, etc.). Furthermore, we can help your company with its administrative obligations and contacts with administrative bodies.