Until the end of 2020, there was a transition period in which the supply and purchase of…
Until the end of 2020, there was a transition period in which the supply and purchase of goods to/from the United Kingdom were assessed according to current European regulations.
However, the United Kingdom (“UK”) withdrew from the EU (“EU”) on 1 January 2021 and is now considered a third country for tax purposes. From the New Year, the movement of goods to/from the UK constitutes import/export. Companies trading with companies established in the UK are now subject to customs supervision and the administration involved in customs documents.
In cases where goods were delivered to the UK or goods were acquired from the UK before 31.12.2020 and after the New Year the situation arises where the taxpayer will have to correct the tax base, this correction will be made under the original performance regime following Section 42 et seq. of the Value Added Tax Act (the “VAT Act”).
If goods were dispatched or transported during the transition period, but the goods arrived in the Czech Republic/UK after the end of the transition period, this will be a classic acquisition or delivery of goods between EU countries. However, it must be duly demonstrated that the dispatch or transport of goods took place before the end of the transitional period.
The foregoing does not apply to Northern Ireland. For the trade in goods, Northern Ireland continues to be considered an EU country and will retain this status for at least another 4 years. Northern Ireland will now use the prefix “XI” in its tax identification number. Trade-in goods between the Czech Republic and Northern Ireland will therefore be considered as an intra-Community transaction.
Imports of goods from a third country
Goods are imported if they enter the territory of the EU from a third country (Section 20 of the VAT Act). The place of performance is the Member State on whose territory the goods are located at the time when they enter the territory of the EU from a third country or the Member State in which the relevant customs measures cease to apply to these goods (Section 12 of the VAT Act).
The full article is available here.
In case of any questions, please feel free to contact ASB team:
Kristina Krčmářová Senior, Tax Consultant, firstname.lastname@example.org
Kristýna Kolářová, Junior Tax Consultant, email@example.com
Štěpán Hrubý, Tax Manager, firstname.lastname@example.org
Anna Szafraniec, CEE VAT Compliance Director, email@example.com