Per January 1st, 2021 the Brexit related transitional period will end and from that date the United Kingdom will be a non-EU country in relation to Customs and VAT. Dutch Customs recently has sent letters to all Dutch VAT registered companies (Dutch companies as well as non-Dutch companies who are VAT registered as non-established company) announcing in general all consequences for Customs purposes. Shipments of goods from the EU into the United Kingdom and from the United Kingdom to the EU will fall under the scope of Customs procedures and formalities.
For Customs purposes import duties and import VAT may be due upon importation of these goods into the United Kingdom and the EU. In addition, depending on the Incoterms used, the shipper may be obliged to VAT register in the country of importation and to obtain an EORI number, prior to the actual importation.
UNIQUE STATUS FOR NORTHERN IRELAND
However, based on the current status of the negotiations and withdrawal agreement, Northern Ireland will have a unique status: for transactions in relation to goods (i.e. shipments from and into Northern Ireland) it remains part of the EU VAT system. From this perspective the letter of Dutch Customs is too general and the risk is that companies apply the incorrect rules.
It is therefore important that companies that are involved in transactions with Northern Ireland based suppliers and customers need to be aware how it works out for Customs and VAT. Further in this eMagazine you will find a clarification. But it is recommended to check your invoicing, administration and internal procedures to be able to comply with the relevant rules.
We would be pleased to assist in this process.