As of 1 January 2021, you will have to reckon with far-reaching changes regarding VAT and customs for your transactions with the United Kingdom. So, what exactly has changed and what requires special attention?
Export and import
One of the most important changes is that what used to be intra-Community goods transactions between the UK and Belgium now qualify as export and import of goods. This has the following implications, among others:
- Entrepreneurs have to deal with customs for their transactions. Consequently, they must obtain an EORI number as identification for their customs operations. Belgian suppliers who export goods to the UK will have to obtain an EORI number in Belgium. If they have to take care of the import obligations in the UK as well, they will also need a GB EORI number issued by the British customs authorities.
- You must take the different VAT treatment into account. Transactions will have to be reported in different sections of your VAT declaration. Furthermore, sales no longer have to be included in the IC declaration, nor does Intrastat apply now. Update your accounting programme as soon as possible, so that the transactions are processed correctly. Different invoice references will also be applicable.
- Customs formalities will inevitably be imposed. A customs representative can be appointed to assist you with these.
- The export declaration will be an indispensable document for the justification of VAT exemption when exporting goods from Belgium to the UK.
- A Belgian tax subject who buys goods in the UK will from now on be importing them into Belgium. In principle, the Belgian VAT on these goods must immediately be paid to customs in advance, unless the tax subject is in possession of an ET14.000 permit. This allows the Belgian VAT due to be shifted to the VAT return.
- Basically, several simplification schemes for certain transactions with the UK have been dropped (e.g., triangular traffic, call-off stocks, etc). The import/export rules apply now. Belgian tax subjects should analyse their transactions and, in particular, check whether they need a GB EORI number and a UK VAT number.
- The special regime for remote sales to customers in the UK no longer applies either. Here, too, the import/export regulations are applicable.
- A special status has been granted to Northern Ireland. The European regulations will continue to apply there for an additional 4-year period. Cross-border goods transactions between Belgium and Northern Ireland will therefore continue to be considered as intra-Community transactions. VAT numbers of companies in Northern Ireland will be given the prefix ‘XI’.
With regard to services, too, the UK is considered to be a third country territory now. This may result in changes in a B2B or a B2C relationship (e.g., in the case of ‘intellectual or immaterial’ services carried out for private individuals in the UK).
Belgian entrepreneurs who paid local VAT in the UK in the period 2020 will still be able to recuperate it via an INTERVAT/VAT refund until 31 March 2021. For a refund of VAT incurred locally in the UK as of 1 January 2021, one should address the UK tax authorities directly.
From now on the United Kingdom no longer falls within the scope of the MOSS scheme either (for telecommunications, radio and television broadcasting, and electronic services). Belgian suppliers of such services to individuals in the UK will therefore have to register for VAT in the UK, in order to pay the tax due there.
UK tax subjects who are required to register for VAT in Belgium (and who do not have a fixed establishment in Belgium for VAT purposes) will from now on be required to appoint an individual responsible representative in Belgium. Direct VAT registration is no longer an option. For a limited number of transactions, however, a global responsible representative can be used (e.g., import with transit, VAT warehousing, etc.).
NB: Tax subjects from the UK who currently have a direct VAT identification number in Belgium must have it converted into registration with an individual responsible representative by 31 March 2021 at the latest!
For any further questions on this subject, please do not hesitate to contact us.