Frequently Asked Questions
What is the difference between an EU EORI and a UK EORI number?
EU EORI # is based on the the VAT registration in the country of establishment. Validity can be checked here: https://ec.europa.eu/taxation_customs/dds2/eos/eori_validation.jsp?Lang=en - Your UK business may need a UK EORI number if the UK leaves the EU with no deal. You do not need a new EORI number if you already have one that starts with GB.
Although triangulation simplified rules will be abolished will it still be possible to expect a supplier to send goods to a third party, providing that the importer pays and accounts for the import VAT?
If the 'intermediate' business i.e. the one buying the goods from the EU country of origin and delivering to the end EU customer is in the UK, it will need to register in either the country of origin or destination post-Brexit. There would be no import VAT if the goods do not leave the EU.
I'm a UK company. Will I need to charge VAT to our German customers after Brexit?
No - in the event of a 'no deal' these will be exports and zero-rated provided sufficient proof is held that the goods have left the UK.
We have customers who are EU registered businesses and we charge zero VAT on our services (i.e. warehousing and transport in the UK) and prepare an EC Sales list return - I assume from 30th March we simply have to start charging them UK VAT and the EC Sales list return falls away - is this correct?
The provision of transportation services (as opposed to the provision of a means of transport - i.e. vehicle without driver) is defined as a general rule service. What this means in practical terms is that services supplied to non-UK businesses are treated as zero-rated (or outside the scope of VAT). The main change we see based on the information provided is that you will not need to complete EC Sales Lists, but should still be able to zero-rate the supply.
Is there any impact for an EU company which have the main shareholder a UK company?
If the UK shareholder company is essentially a passive holding company then it should not have any impact on Brexit. It is the trading activities that need to be considered. If the UK shareholder is a trading entity then there is a potential effect, but we would need more details to help you assess that.
I run a B2C e-commerce. Doing distance selling from the UK to other EU countries. Can you clarify what will happen post Brexit? Should the UK business register for VAT in all EU countries or will there be no VAT but customs duties payable?
If you don't make any changes to your supply chain structure and continue to fulfil orders from UK inventory then the distance selling rules fall away, all shipments out of the UK become zero-rated, but there will be an additional landed cost on arrival at the destination country. This will require a customs declaration, potentially an import duty charge and likely import VAT. The importer of record should manage this, which can either be the UK business (as a non-established taxpayer), the customer or a third-party distributor. If the UK business or a third-party distributor manages the process and needs a VAT registration, then there will effectively be two supplies - the import being the first supply and the onward distribution being the second supply. The onward distribution will then come under the EU distance selling rules. There is a potential advantage to the UK business being registered in the EU as an importer/reseller in that the import value might not need to be the sales price thereby reducing the level of import duty that might be due. It should be anticipated that prices will increase, as a result of the import duty. Subject to volumes and costs, there may be some commercial advantage in creating an inventory store on the EU mainland and fulfilling orders from there.
We are a Czech company with Czech VAT number and we have GB VAT number as well - we have stock in the UK area. Do we have to established new entity in UK after Brexit?
In case the Brexit leads to the situation that the UK is no longer part of the customs union of the EU, all the goods shipped from the UK to the EU should be imported. In case import duties will apply, this means that the margin will decrease in case the prices will remain the same.
I had heard previously that an existing EORI number would become invalid on Brexit and that there would be a need to reapply in order to continue to trade with the EU countries. Is that the case?
Your existing UK EORI number would be sufficient for these purposes.
Can the customers (private or business) in the UK simply pay the import tax themselves?
If the customer in the UK is listed as the importer of record then it should be liable to pay any import costs such as VAT and duty. VAT registered customers would normally need an EORI number, but non-VAT registered customers should expect to pay import duty.
Do the changes to Moss discussed only apply in the event of a no deal Brexit?
We don't have details of what will happen in the case of a Brexit with a deal, but it is possible that similar changes to MOSS will be required even if a deal is agreed. There might be transitional arrangements in the case of a deal, but we will need to respond to these as they become clear.
What will be the basis to charge VAT on import, a 'proforma invoice' or the commercial invoice? We are shipping directly to our UK client, but we invoice our UK subsidiary first. For shipping, we send a proforma invoice to deal with import duties and import VAT, but we don't want our end customer to see the values on these invoices (commercial invoice from our UK office to customer is of course higher).
Customs valuation of imported product does not simply rely on the commercial or pro-forma invoice, although this is usually a good place to start. Also given, in this scenario, that there is an initial intercompany sale before a domestic UK sale there will likely need to be a transfer pricing consideration to ensure that the value meets those requirements. In this particular situation the intercompany value is likely to be the more relevant for import customs valuation purposes. Import VAT is assessed on the customs inclusive import value.