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EU: Brexit no-deal preparedness and customs, VAT implications

EU: Brexit no-deal preparedness and customs, VAT

The European Commission today issued a release for EU businesses in the event of a “no-deal” Brexit—i.e., the risk that the UK may leave the EU on 30 March 2019 without a deal.


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The EC release is intended to help EU businesses in the area of customs and indirect taxation, including value added tax (VAT), and is part of ongoing efforts to prepare for the UK's exit from the EU without a deal being concluded. To prepare for a “no-deal” scenario and to continue trading with the UK, the EC has advised businesses to:

  • Assess whether they have the necessary technical and human capacity to deal with customs procedures and rules (e.g., concerning preferential rules of origin)
  • Consider obtaining various customs authorisations and registrations in order to facilitate their trading activity if the UK is part of their supply chain
  • Contacting their national customs authority to see what other steps can be taken to prepare

The EC also today noted that in a "no-deal" scenario, the following would apply:

  • Customs formalities would apply, declarations would have to be filed, and customs authorities could require guarantees for potential or existing customs debts.
  • Customs duties would apply to goods entering the EU from the United Kingdom, without preferences.
  • Prohibitions or restrictions could also apply to some goods entering the EU from the United Kingdom, which means that import or export licences might be required.
  • Import and export licences issued by the United Kingdom would no longer be valid in the EU.
  • Authorisations for customs simplifications or procedures, such as customs warehousing, issued by the United Kingdom would no longer be valid in the EU.
  • Authorised Economic Operator (AEO) authorisations issued by the United Kingdom would no longer be valid in the EU.
  • EU Member States would charge VAT at importation of goods entering the EU from the United Kingdom. Exports to the United Kingdom would be exempt from VAT.
  • Rules for the declaration and payment of VAT (for supplies of services such as electronic services), and for cross-border VAT refunds would change.
  • Movements of goods to the United Kingdom would require an export declaration. Movement of excise goods to the UK could also require an electronic administrative document (eAD).
  • Movements of excise goods from the United Kingdom to the EU would have to be released from customs formalities before a movement under the Excise Movement and Customs System (EMCS) could begin.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094

Irina Vaysfeld
T: 212-872-2973

Amie Ahanchian
Managing Director
T: 202-533-3247

Robert Waldrop
T: 212-954-8117

Gisele Belotto
Managing Director
T: 305-913-2779

Christopher Young
T: 312-665-3229

Andy Doornaert
Managing Director
T: 313-230-3080

George Zaharatos
T: 404-222-3292

Jessica Libby
Managing Director
T: 612-305-5533

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