VAT rules for Northern Ireland from 2021 after Brexit

VAT rules for Northern Ireland from 2021 after Brexit

From January 1, 2021, the United Kingdom will no longer be part of it EU Customs and Fiscal Territory (VAT, Excise Duty). The agreement signed between the United Kingdom and the European Union on December 24, 2020 was finalized, with the new structure aimed at regulating economic relations between the two systems.

In short, for exchanges with the United Kingdom Customs and tax procedures envisaged for non-EU countries.

From January 1, 2021, the protocol is onIreland and Northern Ireland Which gives validity EU standards In matters of customs Removal of goods between member states. So there will be no special customs procedures.

In particular, in accordance with Article 8 of the Protocol to Ireland / Northern Ireland, which is an integral part of the withdrawal agreement, Provisions of EU law relating to VAT Listed in Annex 3 of the Protocol Goods relation still applies in Northern Ireland After the transition period, In such a way as to avoid a physical border between Ireland and Northern Ireland.

As a result, taxable individuals and certain non-tax entities are subject to the provisions of the Union VAT Act for transactions in Northern Ireland, while all transactions are subject to the provisions of the United Kingdom VAT Act. Other activities in the United Kingdom, including those in Northern Ireland.

For proper functioning of the Union VAT system, issued by the Council of Europe Recommendation (EU) n. November 20, 2020, 2020/1756, Provided by Assignment of a VAT identification number Distribution of goods in Northern Ireland is different for any taxable person, taxable or non-taxable entity.

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As a rule, the prefixes of VAT identification numbers in the Union are based on the ISO 3166 code – Alpha 2 – which identifies which member state it is from. Northern Ireland does not have a special code under this system, but the ISO gives the possibility to use ‘X’ codes in areas where there is no special code. As a result Adopted the code “XI” for Northern Ireland, Different code from the United Kingdom, starting with GB; It has been clarified that Code “IE” remains valid for Ireland.

However, the Distribution of services between member states and institutions in Northern Ireland: Such activities Not included in the protocol mentioned above in the Agreement, So, it has to be that wayEquivalent to transactions between Member States and Third Countries.

I. “Generic” services received Lenders from Northern Ireland demand it The National Client issues a self invoice To pay taxes in Italy.

Similarly, i Services It was returned by an Italian lender Invoice must be given to a client in Northern Ireland VAT is exempt under Article 7-Ter, Presidential Decree 633/1972 (Characterization of Operation N2.1).

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