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END OF TRANSITION PERIOD FAQs ON TAX AND CUSTOMS

This document gives an overview of the impact that the UK’s withdrawal from the Single Market and EU Customs Union will have in the areas of taxation and customs, as of 1 January 2021.

These FAQs can serve as a first point of reference, providing general answers to the most common questions. For more detailed and precise information, however, you should contact  your   national  authorities  and/or  refer  to  the  detailed  guidelines,  which  are available on a wide range of issues on the Commission’s website.

Throughout this FAQ, the term ‘UK’ refers to the territory of the United Kingdom including Northern Ireland. The term Great Britain or ‘GB’ refers to the territory of the United Kingdom excluding Northern Ireland.

A glossary of technical terms can be found at the end of this FAQ.

EU-UK TRADE

EU-NORTHERN IRELAND TRADE

NORTHERN IRELAND-GREAT BRITAIN TRADE

PREFERENTIAL TREATMENT

TRANSIT

GOODS MOVING AT END OF TRANSITION PERIOD

VAT QUESTIONS

MOVEMENTS OF PERSONAL GOODS

SPECIFIC CUSTOMS PROCEDURES

GLOSSARY

EU-UK TRADE

1. I plan to begin or continue exporting to Great Britain (GB) after 1 January 2021. What general customs procedures will I have to carry out?

As of 1 January 2021, customs formalities, like those applied on the movement of goods between the EU and any other third country, will apply to all goods being exported from an EU Member State to GB. There is no transition period for imports into the EU. Formalities and relevant controls may lead to longer delays at customs as of that date.

EU companies can prepare and help to mitigate these delays by taking a number of steps: You should obtain an EORI number [see Question 7 below] if you do not have one already.

You should also register in REX (see Question 28 below) in order to be able to make out a

statement on the origin of your goods if you want your exports to benefit from duty free treatment.

You will need to file customs declarations when exporting any goods to GB or when moving your goods through GB, as of 1 January 2021.

In general, goods being moved from the EU to GB after the end of the transition period must also be covered by an exit summary declaration (EXS). This is required for security and safety purposes.

The EXS declaration must be lodged within certain time limits, ahead of export, with the customs authority of the country where the export starts (or where the exporting company is established), depending on how the goods are transported.

National authorities can help you access and complete export and EXS declarations and can advise on other procedures that you may need to fulfil.

There will also be import procedures for goods entering GB, though the UK has announced that customs declarations can be presented for imports from the EU retrospectively during a transitional period which ends on 30 June 2021. Please consult the  HMRC website for developments and procedures in the UK.

2. I plan to begin or continue importing from GB after 1 January 2021. What general customs procedures will I have to carry out?

If you wish to import from Great Britain after 1 January 2021, you should obtain an EORI

number if you do not have one already [see Question 8 below].

You must submit an electronic declaration to customs in the Member State into which you are importing, or appoint a customs broker to do it on your behalf.

In general, goods entering the EU from GB after the end of the transition period must also be covered by an Entry Summary Declaration (ENS), which includes safety and security information.

The ENS declaration must be lodged within certain time limits in advance of the arrival of the goods with the customs authority where the first arrival in the EU will take place.

For more information on ENS and import procedures, see sections 5.1 and 6 in our guidance note.

National authorities can  help you to complete ENS declarations and advise on other procedures that you may need to fulfil.

There will also be export procedures for moving the goods out of the UK. The HMRC website will keep you up to date with developments and procedures in the UK.

3.  Will my company have to pay import duties on goods I want to import from GB?

The draft  EU-UK Trade and Cooperation Agreement provides for zero tariffs and zero quotas on all trade in goods originating in the EU or the UK, from 1 January 2021. The zero

tariff and zero quota provisions apply to all goods that comply with the appropriate rules of origin (see section on Preferential Treatment from p. 15 below).

The provisions in the draft EU-UK agreement do not govern trade in goods between the EU and Northern Ireland, where the Protocol on Ireland and Northern will apply (see next section from p.9 below).

4.  Will my company have to pay VAT on goods I want to import from or export to GB?

From 1 January 2021, imports of goods and subsequent supplies of goods from GB to an EU Member State will be subject to VAT in the Member State concerned, at the rate that applies to the same goods in that Member State.

VAT will be payable to customs authorities at the time of importation, unless the Member

State of importation allows import VAT to be included in your periodical VAT return.

The taxable amount is based on the value for customs purposes plus the cost of other charges, taxes and duties incurred by the importation itself.

Goods being exported to GB will generally be exempt from VAT, although you must be able to prove that the goods have left the EU. Member States generally base this proof on the exit certification given to the exporter by the customs office of export.

A company established in GB carrying out taxable transactions in an EU Member State may be required to designate a tax representative as the person liable for payment of the VAT, in accordance with the EU VAT rules.

See the Commission’s guidance for more information on VAT rules that apply to goods.

5. Will my company have to pay excise duty on excisable goods that I want to import from GB to an EU Member State?

From 1 January 2021, excisable goods imported into the EU from GB will be subject to excise duties in the EU. The rates of duty are set by the country where the goods are imported, or where the goods will be consumed if the goods are moved from the place of importation under excise duty suspension (see below).

Entry of excise goods into the EU from GB will be treated as an import. The company importing the goods may pay the excise duty immediately, store them in a tax warehouse or use  EMCS for their onward movement to the final destination in the EU. For this last possibility, the appointment of a registered consignor is required.

UK economic operators will no longer be able to use the EMCS system inside the EU. Transactions of excise goods between Northern Ireland and Great Britain will also be

subject to EU rules for the import or export of excise goods. Northern Irish traders should use the EMCS and follow EU procedures when moving excise goods to/from EU member States.

See the Commission’s  guidance for full information on the rules for excise goods after the transition period.

6.  Will there be tariff quotas on goods traded between the EU and UK?

The draft EU-UK Trade and Cooperation Agreement provides for zero tariffs and zero quotas on all trade in goods originating in the EU or the UK, from 1 January 2021. The zero tariff and zero quota provisions apply to all goods that comply with the appropriate rules of origin.

You can assess whether your product satisfies those requirements here.

7.  I want to trade with GB after 1 January 2021 and need to get an EORI number. What do I do?

As of 1 January 2021, EU businesses and UK businesses established in the EU, that wish to import from or export to GB, need to ensure they have an EU Economic Operators Registration and Identification (EORI) number in order to complete customs formalities.

EORI numbers previously issued in the UK will not be recognised in the EU after the transition period.

EORI numbers are given out by national authorities (full contact list is available here).

Businesses should complete this step as soon as possible. If your company is not established in an EU Member State, you can still get an EORI number from the EU Member State where you will first perform customs formalities. Nevertheless, for certain customs formalities (e.g. lodging an import customs declaration) you need to be established in the EU. In such cases you must appoint a representative who can carry out the formalities on your behalf.

Businesses can hold only one valid EORI number at the same time. Businesses with a UK EORI number may apply for a new EU EORI number, which would be valid as of 1 January 2021.

8. My EORI number was issued by the UK. Can I still continue to use it when trading with EU Member States?

EORI numbers issued by the United Kingdom (except XI EORI numbers issued for Northern Ireland, see next question below) will no longer be valid in the EU from 1 January 2021.

Non-EU businesses and traders established in the EU and that wish to continue trading with the EU need to register with the EU customs authorities and apply for an EORI number, in order  to  complete  the  necessary  customs  formalities.  You  should  register  with  the

competent authorities of the EU Member State where your company has a permanent establishment (contact list is available here).

If your company is not established in an EU Member State, you must either register in the first Member State where you lodge a declaration or apply for a decision, or you must appoint a customs representative to carry out the formalities on your behalf.

Businesses are encouraged to apply to the relevant customs authorities for the EU EORI number as early as possible. This will speed up the process to receive an EU EORI from 1 January 2021.

9. Which geonomenclature codes should I use when importing or exporting to and from Great Britain (GB) and Northern Ireland, respectively?

Geonomenclature codes are country codes used for the registration and identification of traders, as well as for customs declarations, notifications and proof of the customs status of Union goods.

As of 1 January 2021:

•   The geonomenclature code to be used in the context of Great Britain (UK excluding Northern Ireland) will be GB

•   The geonomenclature code to be used in the context of Northern Ireland will be XI

Full guidance on the future use of these codes following the end of the transition period is available here.

10.Will my Authorised Economic Operator (AEO) status be recognised in the UK from 1 January 2021?

Yes. The EU and the UK have agreed to recognise each other’s ‘Authorised Economic

Operators’  (AEO)  programmes,  enabling  trusted  traders  to  enjoy  certain  customs

simplifications and/or facilitations related to security and safety in their customs operations with the customs authorities of the other Party.

Northern Ireland traders may continue to apply for AEO status through the UK authorities.

11.I am a ferry operator that transports goods exported from the EU to GB. What new rules apply from the end of the transition period?

Ferry operators carrying goods to Great Britain will have to electronically submit an Exit Summary Declaration (EXS), including Safety and Security (S&S) information, for all the goods they are carrying, in advance of departure, unless the S&S has already been submitted with the export customs declaration.

You can find more information through your national authorities. The HMRC website should keep you up to date with developments and procedures in the UK.

12.I am a ferry operator that transports goods from UK for import into the EU. What new rules apply from the end of the transition period?

From 1 January 2021, ferries carrying goods into the EU from third countries are obliged to electronically submit an Entry Summary Declaration (ENS), which includes a Safety and Security (S&S) information for all goods they are carrying, in advance of arrival in the EU.

In addition, individual Member States may have other requirements or formalities that must be completed. You can find more information in our  and through your  national

authorities.

13.I  plan  to  begin  or  continue  exporting  to  GB  after  1  January  2021.  What prohibitions and restrictions will apply?

As of 1 January 2021, EU prohibitions and restrictions on the international movement of goods, such as on drug pre-cursors and firearms, will apply to goods imported from the UK to the EU, and vice versa. More details on prohibited and restricted goods are available here.

14.What formalities do I need to fulfil to import agri-food products from GB into an EU Member State?

All consignments of agri-food products will have to be accompanied by health certificates. They will also have to undergo sanitary and phytosanitary controls at Border Inspection Posts  on  import.  Certain  procedural  simplifications  will  be  available  for  pre-listed establishments, however. For more information, see the relevant  guidance.

EU-NORTHERN IRELAND TRADE

15.    I am an EU business that wants to import or export goods directly from/to Northern Ireland (NI) to/from an EU Member State after 1 January 2021. Are there new procedures I need to undergo?

No. From 1 January 2021, the Protocol on Ireland and Northern Ireland applies and EU rules for customs, VAT and excise duties continue to apply to all goods entering and leaving Northern Ireland from/to the EU.

This means that the rules that apply to the movement of goods between two EU Member States will also apply to goods moving between Northern Ireland and an EU Member State, and vice versa.

EU goods brought from an EU Member State to Northern Ireland, or vice versa, will be treated as an intra-Union transaction. There will be no customs formalities. EU VAT rules will also continue to apply for transactions in goods.

These operations should be declared in the VIES (VAT Information Exchange System) listing.

16. I plan to begin or continue exporting from Northern Ireland after 1 January 2021. What general customs procedures will I have to carry out?

From 1 January 2021, the  Protocol on Ireland/Northern Ireland (the Protocol) applies. This means that EU rules for customs will continue to apply to all goods entering and leaving Northern Ireland. The purpose of the Protocol, which was agreed as part of the Withdrawal Agreement, is to avoid any customs checks and controls on the island of Ireland.

There will therefore be no changes in tax and customs for EU businesses trading goods directly with Northern Ireland, as long as these goods stay within Northern Ireland or the EU.

For customs, the Protocol means that:

•   There will be no customs formalities for goods moving between Northern Ireland and EU Member States.

•   EU customs formalities will apply to goods entering or leaving Northern Ireland to/from the rest of the world, including the UK. There are exceptions with regard to this for goods considered at ‘no risk of subsequently being moved into the Union‘, i.e. those that will not enter the EU Single Market.

•   Checks and controls will take place on food and live animals entering Northern Ireland from third countries, including the rest of the UK, to make sure they adhere to the EU’s sanitary and phytosanitary (SPS) requirements.

•   Checks and controls will also take place on goods subject to any other prohibitions and restrictions listed in the Protocol and on goods entering Northern Ireland from third countries, including the rest of the UK to make sure they comply with the relevant rules.

17.  I plan to begin or continue exporting from Northern Ireland to an EU Member State after 1 January 2021. What VAT and excise rules apply?

From 1 January 2021, the Protocol on Ireland/Northern Ireland applies. This means that EU rules for VAT and excise duties will continue to apply to all goods entering and leaving Northern Ireland.

There will therefore be no changes in VAT and excise arrangements for EU businesses trading goods directly with Northern Ireland, so long as these goods stay within Northern Ireland or the EU.  Traders should be aware of the VAT and excise requirements for goods traded between Northern Ireland and Great Britain.

For VAT, EU rules will continue to apply in Northern Ireland. Goods sold and transported to/from Northern Ireland to/from an EU Member State will be treated the same as goods traded cross-border within the EU. Northern Irish traders should use the new  XI prefix to move goods to EU Member States.

Goods entering or leaving Northern Ireland to/from a non-EU country, including the rest of the UK, are subject to EU VAT rules.

Goods exported from Northern Ireland to the United Kingdom are exempt from VAT in the EU. The supplier of the exported goods must be able to prove that the goods have left Northern Ireland and the EU.

For excise, EU rules will continue to apply in Northern Ireland. Excisable goods (such as tobacco products, alcoholic beverages etc) which are sold and transported to/from Northern Ireland to/from an EU Member State will be treated the same as goods traded cross-border within the EU.

Northern Irish traders that wish to move excise goods between Northern Ireland and EU Member States must be registered and authorised in  SEED and will receive a new SEED code beginning with ‘XI’. They should use the EU procedures and systems (notably  EMCS)

to do so. The excise goods will be classified and taxed according to the specific EU rules on excise structure and rates.

Goods entering or leaving Northern Ireland to/from the rest of the UK will be regarded as imports or exports under EU rules on excise, and will be subject to the relevant tariffs and procedures.

18.  I want to export goods from the EU, via Northern Ireland to Great Britain. How do I show that I am eligible for the VAT exemption on goods exported to a third country?

In order to benefit from the VAT exemption for goods exported to a third country, you must be able to prove that the goods have left the EU. Customs documentation, such as the exit certification, given to the exporter by the customs office of export can be used to prove eligibility for the VAT exemption.

NORTHERN IRELAND-GREAT BRITAIN TRADE

19. I am a Northern Irish business that receives/sends goods from/to GB. Will I be subject to any customs formalities for these goods?

Yes. According to the Protocol on Ireland and Northern Ireland, Northern Ireland remains part of the customs territory of the EU and EU customs rules and procedures will continue to apply there. Great Britain will no longer belong to the customs territory of the EU from 1 January 2021.

This means that the customs formalities required for movements of goods between Northern Ireland and Great Britain are the same as those that apply to movements of goods to/from any EU Member State to a non-EU country. See question 2 above for more detail.

20. Will there be safety and security requirements for goods moving from Northern Ireland to Great Britain? In which system will they be processed?

Yes. For movements of goods between Northern Ireland and GB, such as for goods subject to safety and security requirements, formalities will apply. These will be the same as those applied to goods moving from the EU to other third countries, as established under the Union Customs Code (UCC). For more information, see the Commission’s  guidance note.

21. When can goods that are imported to Northern Ireland from GB and other nonEU countries be considered as ‘no risk of subsequently being moved into the Union’, and therefore not subject to customs formalities?

According to the Protocol, goods brought into Northern Ireland from GB by direct transport may be considered as ‘not at risk’ of subsequently moving into the EU when:

•   the duty payable on the goods under the Common Customs Tariff is equal to zero;

•   it can be proven that the risk of the goods being moved onwards to the EU is minimised. The principle way to ensure this is if the importer is recognised as a trader that sells only to end consumers in Northern Ireland, as part of the EU-UK ‘Trusted Traders Scheme’.

Goods from other non-EU countries brought into Northern Ireland by direct transport can be considered as ‘not at risk’ when:

•   the duty payable according to the Union Common Customs Tariff is equal to or less than the duty payable according to the customs tariff of the UK or

•   the importer is part of the ‘Trusted Trader Scheme’ and is importing the good for sale to end consumers in Northern Ireland. In addition, the difference between the duty payable under the Union Common Customs Tariff and the duty payable according to the UK’s customs tariff must be lower than 3% of the customs value of the good.

22. How can businesses register for the “Trusted Trader Scheme”?

Traders that want to use the trusted trader scheme must submit an application to the UK competent authorities and provide evidence that they comply with the requirements established in the Joint Committee Decision. Once verified and authorised by the UK authorities, traders must continue to comply with the conditions or risk that their authorisation be suspended or revoked.

In view of the short preparation time, the agreement foresees the possibility to start the trusted trader regime based on provisional authorisations, granted under certain conditions. Traders can request a provisional authorisation during the first two months after the date of entry into force of the Joint Committee Decision.

23. When can goods brought into Northern Ireland from GB be considered as not for commercial processing and therefore not subject to customs formalities?

Goods brought into Northern Ireland may be considered as not for commercial processing when:

•   the importer had a total annual turnover of less than GB£ 500 000 in its most recent complete financial year; or

•   for some sectors, such as food, construction, health services, the not for profit sector and animal feed, when the further processing takes place in Northern Ireland and is for the sole purpose of the sale to an end-consumer or for consumption in NI or GB.

24.   Can I make use of the inward processing customs procedure for goods imported to Northern Ireland from GB, which I intend to process in an EU Member State?

Yes. In this scenario, the goods being brought into Northern Ireland may be placed under any special procedures set out in EU customs legislation, such as inward processing or customs warehousing. They can then be transported and processed in another Member

State, as long as this is allowed in the authorisation for inward processing granted by the competent customs authority. A trader established in an EU Member State can be the holder of the inward processing authorisation.

You can seek a national inward processing authorisation from your  national authorities.

PREFERENTIAL TREATMENT

25. How can I ensure that goods that I am importing into the EU from the UK benefit from the tariff-free provisions in the draft EU-UK Agreement?

The draft EU-UK Trade and Cooperation Agreement provides for zero tariffs and zero quotas on all trade in goods originating in the EU or the UK, from 1 January 2021. The zero tariff and zero quota provisions apply to all goods that comply with the appropriate rules of origin.

If you want the goods that you are importing to benefit from this duty-free treatment, you must make a claim for preferential treatment. The claim has to be based on a statement of origin, made out by the exporter, stating that the product qualifies for preferential treatment.

It is up to the exporter to make sure that the conditions are met to issue a statement of origin and that the information provided is correct. EU importers have to keep the statement of origin and provide a copy to the EU customs authority if required. Alternatively, the importer can claim the preferential treatment based on his/her own knowledge, in line with the conditions set out in the draft EU-UK Agreement (Article ORIG.18), in case he already has the necessary information to prove that the product is originating.

The draft EU-UK Agreement also contains a “non-alteration” provision (Article ORIG.16). This means that the manipulation (e.g. processing) of the goods in another third country must be very strictly limited, if the goods are to qualify for preferential treatment.

Small consignments are exempted from the requirement to have a statement of origin. To qualify as a “small consignment”, the total value of the goods must not exceed EUR 500 for products sent in small packages or EUR 1 200 in the case of products within a traveller’s personal luggage.

Please note that the agreement does not contain any derogation or transitional measure waiving the requirement to have the adequate documentation to prove origin and therefore benefit from preferential treatment.

26. What information must be in the statement of origin of an UK exporter?  Do UK

exporters need to have an EU Registered Exporter (REX) number?

The draft EU-UK Agreement sets out the rules for statements on origin (Article ORIG.19) as well as the format for these statements on origin (Annex ORIG-4). A reference number by which the exporter is identified needs to be indicated in the statement on origin.

For UK exporters, the number will be assigned according to UK rules, which should establish an identification number for their exporters. The UK will not use the REX system, and plans instead to use EORI registration numbers: please consult the UK national authorities for more information.

27. If a statement of origin cannot be made on time, can it be made retrospectively?

Yes. EU importers can introduce a retrospective claim for preferential treatment of goods imported from the UK, for up to three years after the date of importation. This also applies for EU exports to the UK. This provision is destined to provide for the reimbursement of duties already paid, but does not exempt the importer from having a statement of origin to be able to benefit from preferential treatment (unless the importer claims the preference on the basis of his own knowledge on the basis of relevant origin information already at his disposal).

28. How can I ensure that goods that I am exporting from the EU to the UK are not subject to custom duties in the UK?

Under the draft EU-UK Agreement, goods of EU origin will benefit from tariff-free, quota- free access to the UK market.

To benefit from this preferential treatment, you need to comply with the requirements established in the “Rules of Origin” chapter of the draft EU-UK Agreement. This means that:

-     The  product  that  you are exporting needs  to be  originating in the EU i.e.  the production process has to satisfy a list of requirements. You can assess whether your product satisfies those requirements  here.

-     Your  product  has  to  be  sent  directly  to  the  UK  i.e.  it  has  to  respect  the “nonalteration” rule.

-     The importer may require that you provide him with a statement on origin, proving that your product originates in the EU.

-     Your statement on origin should contain the information required under the draft EU-UK Agreement (Annex ORIG-4). This statement should appear on an invoice or on any other document that describes the product well enough for it to be identified.

In order to make out a valid statement to export to the UK, you need to be registered in the EU Registered Exporter System (REX). To do this, you need to fill in an application form and return it to your competent national authorities, who will give you a registered exporter number and enter it into the REX system.

For small consignments of less than EUR 6000, you do not need to be registered in REX. More information on the REX system can be found here.

29. I am an EU business, exporting goods to the UK. Can I issue a statement of origin if I do not have all the supplier’s declarations for the materials and components used to manufacture the product?

Under EU customs rules, where a supplier provides an EU exporter with the information necessary to determine the originating status of goods, so that the EU exporter can issue a statement of origin, the supplier should make a supplier’s declaration. This is to ensure that exporters have the necessary information to determine the originating status of goods and, if relevant, make a statement of origin for preferential trade purposes.

However, given the very late adoption and publication of the Agreement, suppliers may not be in a position to provide such a formal declaration before the draft EU-UK Agreement starts being applied on 1 January. To address this situation, the Commission has adopted transitory rules that will apply until the end of 2021. These allow an EU exporter to make out a statement on the basis of information already at his disposal even if he receives the formal supplier’s declarations only afterwards.

The exporter is still responsible, however, for ensuring that the statement on origin and the information provided is correct. The exporter must also have all the relevant supplier’s declaration by 1 January 2022 at the latest, or else inform the importer that the statement on origin cannot be substantiated.

30. I  am an exporter of goods of EU origin. Will the UK’s withdrawal from the EU have any impact on my ability to access preferential treatment for my goods?

Under the draft EU-UK Trade and Cooperation Agreement, EU and UK traders have to meet rules of origin comparable to those which the EU and the UK have with other trading partners.

From 1 January 2021, traders will have to demonstrate the originating status of goods in order for them to benefit from preferential tariff treatment under the draft Agreement. Goods that do not meet the origin requirements contained in the draft Agreement will be liable for customs duties.

Self-certification of the origin of the goods will be possible for trade between the EU and the UK, thereby making it easier for the trader to prove the origin of its products. In addition, the EU exporters will benefit from additional flexibility in collecting documentary evidence to prove origin during the first year, to allow their products  to benefit from the preferences despite the short timeline between the conclusion and application of the Agreement.

EU exporters trading with the EU’s preferential partners other than the UK will also be affected.   UK   content   (both   material   and   processing   operations)   will   become ‘nonoriginating’ when determining the preferential origin of goods under EU trade preferential arrangements. Therefore goods produced in the EU with relevant UK content for the acquisition of the origin will not be considered as EU-originating. As such, it will not be able to benefit from the preferential trade arrangements that the EU has with other third countries. EU exports will need to reassess their supply chains if they wish to avoid this happening.

To maintain their preferential origin status, goods traded under EU preferential arrangements other than the one with the UK, which transit through the UK, will also have to meet requirements related to direct transport/non-manipulation, which are contained in those EU preferential agreements.

31.  Has the TARIC database been updated to reflect the draft EU-UK Agreement?

Yes - the TARIC database has been updated. It indicates that, from 1 January 2021, goods originating in Great Britain (GB) can benefit from the preferential measures (0% tariffs), in line with the draft EU-UK Agreement.

The code to be used for statements of origin is U116. For importer’s knowledge statements the code to be used is U117, while U118 should be used for statements on origin for multiple shipments of identical products. More information on TARIC can be found  here.

TRANSIT

32.  I want to transport goods from Ireland to another EU Member State, transiting the UK. What rules and procedures apply for this transit?

If you are moving goods from one EU Member state to another via Great Britain, the goods can be moved with a minimum of formalities under a customs transit procedure.

The UK will be party to the Convention on a common transit procedure (CTC) as of 1 January 2021. This means that the UK can use common transit and will continue to have access to the NCTS and other relevant IT systems.

The transit declaration can thus be made electronically through the New Computerised Transit System (NCTS).

A transit declaration comprising all security and safety data may also be used to comply with ENS declaration requirements, subject to certain time-limits.

National authorities can help you to access and complete transit declarations.

You can also apply for authorised consignor/consignee status with your national customs authorities.

The UK and the EU are both parties of the TIR Convention. Thus you can also use the TIR transit procedure.

You can find more information on transit rules  here.

33. Do goods moving from one EU Member State to another, in transit through Great Britain, need to make a customs declaration when re-entering the EU?

No. However consignments that transit from one Member State to another through a third country require an ENS declaration when they are re-entering the Union. You can find more information on transit rules here.

34. I am a company established in Northern Ireland. I want to export goods to an EU Member State, transiting through another Member State. What rules and procedures do I need to comply with?

If you are based in Northern Ireland, there are no customs checks or formalities when exporting goods directly to an EU Member State, due to the Protocol on Ireland/Northern Ireland.

If your goods are destined for an EU Member State but you intend to transit through the United Kingdom, they must travel under the Union transit procedure. See question 32.

35. I want to export excisable goods (alcohol, tobacco products, fuel) out of the EU to the UK. What excise rules and duties apply?

From 1 January 2021, it will no longer be possible to export excise goods to the UK just using the EMCS system. The EU’s accompanying documents - Simplified Accompanying Document (SAD) and Electronic Accompanying Documents (EAD) – will no longer be accepted in Great Britain.  For the rules for the entry of excise goods in Great Britain, see the UK government’s website.

Transactions of excise goods between Northern Ireland and Great Britain will also be subject to EU rules for the import or export of excise goods. Northern Irish traders should use the EMCS and follow EU procedures when moving excise goods to/from EU Member States.

See the Commission’s guidance for full information on the rules for excise goods after the transition period.

GOODS MOVING AT END OF TRANSITION PERIOD

36.   Will goods already on their way from the EU to the UK, or vice versa, before midnight on 31 December need to be declared to customs if they arrive at their final destination only after 1 January 2021?

Union goods departing from an EU Member State before 31 December 2020 and arriving at their destination after 1 January 2020 can be considered as intra-EU goods for which no customs procedures applies.

However, proof that the movement started before the end of the transition period, and proof that the goods are Union goods, must be given once they reach the EU-UK border point.

Proof that the goods were dispatched before the end of the transition period can be provided by certain documents such as transport documents. The document must show the date when the movement of the goods in question started.

Proof that the goods are Union goods can be provided by documents as set out in Article 199 IA of the Union Customs Code.

If the required proof cannot be supplied, the applicable customs duties, VAT and excise duties will have to be paid when the goods enter into free circulation in the EU.

Section 5.3 of this Guidance Note details further aspects.

Border controls will apply for animals and goods that fall under SPS requirements arriving into the EU from GB as of 1 January 2021 00:00 CET, regardless of the time of departure of the consignment.

VAT QUESTIONS

37.  Do I have to complete any formalities on my B2B VAT obligations regarding exports to Great Britain (GB) for 2020?

From 1 January 2021, EU VAT rules will no longer apply in GB. This means that all movements of goods between the EU and GB will be considered as imports or exports and will be subject to customs formalities.

EU and UK traders, however, will still be obliged to submit their intra-community statements (or EC sales lists) for the last tax period, ending on 31 December 2020.

Different rules apply for trade in goods with Northern Ireland (see Question 16).

38. Will I have to pay VAT and complete customs formalities when I buy online from businesses based in GB?

From the end of the transition period, supplies and movements of goods between the EU and GB are subject to VAT rules on imports and exports. VAT will be due at import into the EU, at the same rate that applies to the same goods in the Member State concerned.

Goods brought into the EU from the UK will be subject to customs formalities and may be subject to customs controls in accordance with EU customs rules.

Online sales of goods to and from Northern Ireland will continue to be treated as EU supplies.

39. How can I request a VAT refund after 2020?

Under the Withdrawal Agreement, VAT refund applications related to 2020, for VAT paid in the EU to a taxable person in the UK or vice versa, can be submitted in line with the usual procedure until 31 March 2021. Taxable persons established in the EU should aim to request their refunds from the UK as soon as possible, to allow them to be processed on time.

After this date, taxable persons established outside the EU, including in GB, must submit their refund application directly to the Member State in question. Member States may require the third country taxable person to designate a tax representative in the EU in order to obtain the refund.

For more information, see the Commission’s guidance note on VAT after the transition period.

40. I am an EU business selling digital services to customers in the UK. Can I continue using the VAT Mini-One Stop Shop (MOSS) system to take care of my VAT obligations with the UK?

No. After the end of the transition period, you will not be able to use the MOSS to report and pay VAT due in the UK. You will have to comply with the rules applicable in the UK, and may also have to register for VAT in the UK.

After the transition period, suppliers established in the UK will have to switch to, and make use of the “non-Union scheme” in one EU Member State.

To remain part of the scheme, UK suppliers who are registered in the UK’s “Union scheme” and also established in an EU Member State, should move their VAT MOSS registration to an EU Member State, as of 1 January 2021.

For more information, see the  guidance note on VAT in services.

41. I am an EU business providing services to UK partners or receiving services from GB partners. What are my VAT obligations?

When services are sold between businesses, VAT is normally due in the Member State of the customer.

This means that following the end of the transition period, the supply of services by a UK business to an EU business will, as a rule, be taxable in the Member State where the customer is established and the customer will be liable for that VAT.

The supply of services by an EU business to a UK business will, as a rule, be considered as being situated outside the EU and therefore not taxable under EU VAT rules.  Services provided to a UK customer will be covered by UK domestic VAT rules.

To understand more with regards to your specific situation as of 1 January 2021, please consult your national authorities.

42. What is the CP42 procedure and when do I use it when importing goods from the UK to the EU?

Customs Procedure 42 (CP42) is a simplification procedure that provides for a deferral of paying import VAT on goods cleared upon arrival into the EU. In this case VAT is paid in a Member State other than the one where the goods first entered the EU.

It can be used when goods being imported from outside the EU (e.g. from GB) into an EU Member State are subsequently being sold on to a company in another EU Member State (i.e. an ‘intra-Community supply’).

To use CP42 on importation, you must be able to provide the following information to the customs authorities:

•   your  VAT  identification  number  or  the  VAT  identification  number  of  this  tax representative issued in the Member State of identification;

•   the VAT identification number of the customer issued in another Member State or your own VAT identification number issued in the Member State in which the dispatch or transport of the goods ends; and

•   evidence that the imported goods are intended to be transported or dispatched from the Member State of importation to another Member State.

Please note that the application of the customs procedure 42 and its requirements may vary according to the Member State of importation concerned. We therefore recommend you to get in touch with the customs authorities in the  Member State of importation for further details.

Imports into Northern Ireland can still benefit from the CP42 procedure if followed by an intra-Community supply.

MOVEMENTS OF PERSONAL GOODS

43.  I want to move residence from UK to an EU Member State after January 2021. Will my personal belongings be subject to customs formalities and VAT?

Personal property of people that are moving residence to the EU from a third country is generally entitled to VAT and customs duty relief, subject to certain conditions.

Normally, this relief only applies to people who have lived outside the EU for more than 12 months, but national authorities may make exceptions in certain cases.

Other categories, such as goods imported for a marriage, due to an inheritance or gifts sent between two private persons (for non-commercial use), are also entitled to VAT and customs duty relief, subject to conditions.

You will need to provide proof to the customs authorities that the goods fulfil the conditions for the VAT exemption.

Alcoholic products or tobacco products, which are part of your personal property are not entitled to VAT or excise duty relief, other than the normal duty free allowances available to travellers.

Please see our website for more information on  VAT relief and duty relief, or contact your national authorities.

44. Do I have to pay VAT on goods that I bring into the EU from Great Britain in my personal luggage?

Goods contained in the personal luggage of travellers coming from Great Britain will not be charged VAT, so long as they are solely for personal consumption.

Alcoholic products or tobacco products are subject to the normal duty free allowances available for travellers.

45. Do I have to pay VAT and complete customs formalities if I buy goods online from Great Britain for personal use?

Yes. From the 1 January 2021, goods bought for personal use from a GB business online will be subject to customs formalities, including the relevant taxes where applicable.

Excise duty will be due on alcohol and tobacco products from GB and must be paid before the goods will be released.

As regards VAT,

·   Until 30 June 2021, only goods entering the EU from a third country with a customs value of EUR 22 or more are subject to VAT.

·   From  1  July  2021,  VAT  will  be  due  on  all  third  country  (including  GB) consignments into the EU, regardless of their value.

Sometimes online businesses, postal operators and/or courier services take care of the administration related to the VAT and duties due on non-EU goods entering the EU. Read the terms and conditions and delivery information carefully when buying online from the UK.

For more information, and contact your  national authorities.

46.I own a recreational boat, which I bought in France and keep it in a UK port. Will

I need to follow any customs formalities after the end of the transition period?

If your recreational boat was imported into the EU or manufactured in the EU, it will be considered as having Union goods status. From 1 January 2021, Union goods in the customs territory of the UK will lose their Union status and will become UK goods.

If, on 1 January 2021, your boat is located in an EU port or sails in EU territorial waters, it will keep its Union status. However, if at that time your boat is located in the UK, its status will be that of a third-country boat when arriving in the territorial waters of the Union. This means that it will be treated as non-Union goods and will be subject to the same customs controls as boats coming from a third country.

If your boat is brought back to the EU and fulfils the conditions to be considered as a returned goods, then it can be declared to customs as such. Otherwise, it can be declared for temporary admission as a non-Union goods. In both cases, the declaration can be done by the sole act of crossing the frontier.

47. I own a boat which will be kept in the UK. Will I be able to bring it to EU waters from the UK for competitions or holidays, without completing customs formalities, or incurring VAT or other charges?

A boat or plane for private use can be temporarily brought into the EU from a third country without paying VAT or other charges, through a temporary admission procedure.

The boat or aircraft must be registered outside the EU and owned by a person established outside the EU, to benefit from this procedure with total relief from import duty. They must leave the EU again within set time limits: 6 months for an aircraft and 18 months for a boat/sea vessel.

48. I own a UK registered car, but want to move it to the EU and re-register it in a Member State. Will I have to complete customs formalities and pay taxes in the EU?

Vehicles for private/personal use may benefit from an exemption from VAT if brought into the EU from a third country. Certain conditions apply, including a minimum period in which you must have owned the vehicle.  You will need to provide documentation showing, amongst other things, that the vehicle was paid for, taxed and registered abroad.

For more information on the procedure to be granted this relief, contact your national authorities

49. I want to import a second hand car from the UK after 1 January 2021. Will I have to undergo customs clearance and pay taxes?

Goods imported directly from Northern Ireland will not be subject to taxes and customs formalities, in line with the Protocol on Ireland and Northern Ireland.

Goods imported into the EU from GB after 1 January 2021 will be subject to VAT and customs formalities, like goods imported from any other third country. These formalities apply whether or not the goods are second hand.

Cars and other vehicles imported into the EU from GB will need to be registered in the EU Member State of destination within a set time limit and a vehicle registration tax may be due.

50. I want to carry a cultural good into the UK? Do I need to fulfil certain conditions?

Under EU law, an export licence is needed if you want to export certain cultural goods such as:

•   furniture more than 50 years old or

•   books more than 100 years old and with a value of more than EUR 50 000 or

•   printed maps more than 200 years old and with a value of more than EUR 15 000.

As of 1 January 2021, these obligations apply in relation to travel between the EU and GB. This requirement also applies to individual travellers.

51. I am travelling from an EU Member State to GB carrying EUR 10 000 or more in cash (or its equivalent in other currencies). Do I have to declare this when leaving the EU?

Under EU law, anyone entering or leaving the EU carrying EUR 10 000 or more in cash (or its equivalent in other currencies) or in bearer negotiable instruments must make a declaration to the customs authorities of the Member State through which they are entering or leaving the EU.

As of 1 January 2021, this obligation applies also in relation to travel from the EU to GB and vice versa. Customs authorities may undertake controls on individuals, their baggage and their means of transport and may detain cash that has not been declared.

As of 3 June 2021, travellers will also need to make a declaration when they enter or leave the EU carrying coins with gold content of at least 90% or bullion with a gold content of at least 99.5%, and of a value of EUR 10 000 or more.

52. What  are  the  rules  regarding  the  transport  of  food  products  for  my  own consumption into the EU or Northern Ireland from GB?

From 1 January 2021, it is prohibited to introduce certain products of animal origin such as meat and milk (including, for example, ham and cheese), into the EU from GB. This prohibition includes carrying them for personal consumption in your luggage.

These rules will also apply for movements between GB and NI.

More information is available in the Commission’s  guidance for travelling  between the EU and the UK (Section 5.3)

53. Can I bring plants into the EU from the UK?

It is prohibited to introduce certain plants or plant products, such as seed potatoes or citrus plants, into the EU from third countries. Most other plants such as cut flowers and bulbs must be accompanied by a phytosanitary certificate.

More information is available in the Commission’s  guidance for travelling  between the EU and the UK (Section 5.2).

SPECIFIC CUSTOMS PROCEDURES

54.  What happens when a UK based supplier has safety stock stored in the EU and clients want to have it after 1 January 2021?

If the safety stock is under customs warehousing procedure in the EU at the end of the transition period, it will be considered non-Union goods and the goods will be subject to EU customs rules and procedures.

More detailed information can be found in section 5 of the Commission’s guidance note.

55.  What rules apply to goods in temporary storage that arrived in the UK before the end of the transition period but are released after 1 January 2021?

The temporary storage of goods in the UK may last for no longer than 90 days after the end of the transition period. During that time, the goods will be subject to EU customs rules and procedures, until the end of the temporary storage situation in the UK.   For more information on temporary storage, see section 5.2 in our guidance note.

56.  How do I treat empty returnable supplies being returned from GB to the EU?

Empty returnable supplies returned from GB to the EU will be subject to customs formalities as of 1 January. They will not be subject to the obligation to lodge an ENS if they are not carried under a transport contract.

Customs declarations for empty returnable supplies can be provided either orally or in written form, including when these supplies are being exported or re-exported to the UK.

Further  information  on  the  rules  for  empty  returnable  supplies  are  available  in  this guidance note.

That said, some Member States may take slightly different approaches. For this reason, it is important that you check with the  Member State concerned.

GLOSSARY

Authorised Economic Operators (AEO)

AEOs are traders who voluntarily meet a range of criteria and work in close cooperation with customs authorities to assure the common objective of supply chain security and are entitled to enjoy benefits throughout the EU. Any business established in the customs territory of the Union, who is part of the international supply chain and is involved in customs-related operations, may apply for the AEO status.

Border Inspection Posts

Border inspection posts are specific controls at the point of entry of imported live animals and animal products which present the highest level of risks as they can transmit serious human and animal diseases.

Common Customs Tariff

The 'Common Customs Tariff' (CCT) applies to the import of goods across the external borders of the EU. The tariff is common to all EU members, but the rates of duty differ from one kind of import to another depending on what they are and where they come from.

Convention on a common transit procedure (CTC)

The common transit procedure is used for the movement of goods between the EU Member States, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland), Turkey (since 1 December 2012), the Republic of North Macedonia (since 1 July 2015) and Serbia (since 1 February 2016). The operation of the common transit procedure with the UK is ensured as the UK has deposited its instrument of  accession on

30 January 2019 with the Secretariat of the Council of the EU.

Customs Procedure 42 (CP42)

CP42 is a simplification procedure that provides for a deferral from paying import VAT on goods cleared upon arrival into the EU. It can be used when those goods are subsequently being sold on to a company in another EU Member State (i.e. an ‘intra-Community supply’).

Customs warehousing

Customs warehousing allows the owner of goods to hold imported non-Community goods in the Community and choose when he pays the duties or re-exports the goods. The amount of working or processing allowed on goods held in warehouses is limited to keeping them preserved with a view to subsequent distribution.

EMCS

The Excise Movement and Control System (EMCS) is a computerised system for monitoring the movement of excise goods under duty suspension in the EU. It records, in real-time, the movement of alcohol, tobacco and energy products for which excise duties have still to be paid.

EORI number

Any economic operator established in the customs territory of the Union needs, for customs purposes, an Economic Operators Registration and Identification number (EORI), available from Member States’ authorities. Businesses and people wishing to trade must use the EORI number as an identification number in all customs procedures when exchanging information with Customs administrations.

Electronic Accompanying Document (eAD)

The eAD documents movements of excise goods at every stage under the EMCS. It contain information on the consignment and the planned movement within the EU.

Excise duty

Excise duties are indirect taxes on the sale or use of specific products, such as alcohol, tobacco and energy. The revenue from these excise duties goes entirely to the country to which they are paid.

Inward processing

Inward processing means that non-Union goods are imported in order to be used in the customs territory of the Union in one or more processing operations, for instance, for the purposes of manufacturing or repair. When imported, such goods are not subject to import duty, other taxes related to their import, such as VAT and/or excises, or commercial policy measures.

New Computerised Transit System (NCTS)

The NCTS is the digital system that must be used by operators for transit declarations concerning movements of goods within the EU.

Preferential origin

Preferential rules of origin determine whether goods qualify as originating from certain countries, for which special arrangements and agreements apply. Where all the requirements are met, goods with

preferential origin are eligible to be imported with lower duty rates or at zero rate, depending on the preferential tariff treatment provided for.

Protocol on Ireland / Northern Ireland

The Protocol on Ireland / Northern Ireland, now agreed by the EU and the UK, sets out the arrangements necessary to address the unique circumstances on the island of Ireland, to maintain the necessary conditions for continued North-South cooperation, to avoid a hard border and to protect the 1998 Good Friday Agreement in all its dimensions.

Rules of Origin

Rules of origin determine where goods originate for the purposes of customs, i.e. not where they have been shipped from, but where they have been produced or manufactured.

Safety and Security (S&S) information

Safety and Security (S&S) information must be included in customs declarations for goods being transported into the EU

Sanitary and phytosanitary (SPS) requirements

Sanitary and phytosanitary (SPS) measures are measures to protect humans, animals, and plants from diseases, pests, or contaminants. EU legislation lays down a detailed set of these rules to reduce or eliminate the possible risks of animal, plant and public health threats as well as animal and plant diseases being introduced into the EU by goods coming from non-EU countries.

SEED

SEED is a register of economic operators, part of which traders can consult online, to see whether a given excise number is valid and what categories of goods the operator in question is authorised to trade.

Simplified Accompanying Document (SAD)

The single administrative document (SAD)  is a form used for customs declarations in the EU, Switzerland, Norway, Iceland, Turkey, the Republic of North Macedonia and Serbia. It is composed of a set of eight copies each with a different function. Using one single document reduces the administrative burden and increases the standardisation and harmonisation of data collected on trade.

TARIC

TARIC, the integrated Tariff of the EU, is a multilingual database with all measures relating to EU customs tariff, commercial and agricultural legislation. It is designed to show the various rules that apply to specific products when imported into the EU.

Tariffs

Customs duties on merchandise imports are called tariffs.

Third country

A third country is a country that is not a member of the EU.

TIR Convention

TIR stands for Transports Internationaux Routiers and is an international customs transit system used by over 50 countries. The TIR procedure enables goods to move under customs control across international borders without the payment of the duties and taxes that would normally be due at importation (or exportation). A condition of the TIR procedure is that the movement of the goods must include transport by road.

Transit

Transit is a customs facility available to operators who move goods across borders or territories without paying the charges due in principle when the goods enter (or leave) the territory thus requiring only one (final) customs formality.

Union Customs Code (UCC)

The UCC is the framework regulation for customs rules and procedures throughout the EU, adapted to modern trade realities and modern communication tools.

Union goods

Union goods are goods which have been released for free circulation in the EU.

Value Added Tax (VAT)

Value Added Tax, or VAT, in the EU is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union.

VAT Mini-One Stop Shop

The VAT Mini-One Stop Shop is an online portal which allows businesses supplying telecommunication services, television and radio broadcasting services and electronically supplied services to consumers in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in their own Member State.

VIES

VIES is an EU level system which allows businesses to verify the validity of a VAT identification number issued by a Member State. The verification is done against the national VAT databases of the Member States themselves.