Taxes/Duties

Exit of the UK from the EU with an Agreement in place

If the UK exits the EU with an Agreement in place a transitional period until the end 2020 will apply, during which period all transactions with UK will continue to be regulated as if UK is a Member State.

All announcements issued and to be issued by the Tax Department in relation to the UK leaving the EU are available on the Tax Department's website and can be accessed using the following link :

http://www.mof.gov.cy/mof/tax/taxdep.nsf/All/A03366590D96DA38C22583AE003396D9?OpenDocument

 

 

Exit of the United Kingdom from the European Union without an Agreement

As soon as the United Kingdom (UK) exits the European Union (EU) without an agreement, the UK will be a third country, and therefore, all the provisions of the VAT Law will apply as they apply for a country which is not a Member State of EU.

Specifically, the goods will be received by taxable persons in the Republic from UK, will be considered as imports and correspondingly goods that will be sent to the UK from the Republic will be treated as exports from the Republic and all necessary customs procedures should be applied.

The place of supply of services supplied and / or of services received between taxable persons in the Republic and companies based in the UK, does not change with the exit of the UK from the EU.

It must be noted that in connection with the above transactions between taxable persons in the Republic and businesses in UK, there will be no obligation for submitting VIES or INTRASTAT declaration.

The request by a taxable person in the Republic, for a VAT refund for the VAT that has been charged in the UK in 2018 for business purposes, should be submitted online before the UK exit date from the EU and not based on the deadline of September 30th, 2019 as required by the relevant EU Directive.

The services supplied by taxable persons in the Republic to non-taxable persons in the UK which fall within the scope of the Mini One Stop Shop (Moss), will be deemed to be provided in the recipient country (UK) without the obligation to impose VAT in the Republic.

Regarding the goods sent form UK and received by individuals residents in the Republic, these will fall under customs control and will be charged with import VAT on their value.

 

 

On-going movements of goods from the United Kingdom to the Republic of Cyprus at the moment of its withdrawal

Irrespectively of any provisions regarding intracommunity acquisitions in the VAT Directive (Directive 2006/112/EC) and the respective provisions in the VAT Legislation in the Republic (Law 95(I)/2000 as amended), given the principles of neutrality of VAT, legal certainty and the requirement to ensure a rational taxation that avoids double taxation, any transport of goods of which the dispatch or transport from the United Kingdom to the Republic started before its withdrawal from the EU and has not been completed before that date, at the time of their arrival at the Republic they will be considered as importation to the Republic.

 

 

VAT Refunds under Directive 2008/9 (Refunds to taxable persons in other member-states) for business expenses incurred in the United Kingdom during 2018

 

Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State shall not apply in relation to the United Kingdom after the date of withdrawal of the United Kingdom (UK) from the European Union (EU).

 

Since that date there will be no access to the electronic application submitted for the VAT refund and therefore there will be no ability for refund of the VAT paid in the United Kingdom for the expenses suffered by your company under the provisions of this Directive.

 

 

VAT paid until 31.12.2018

Regarding the VAT you have suffered in the United Kingdom in 2018 and which was imposed on goods or services supplied to you by other taxable persons in the United Kingdom or on the importation of goods in that Member State, provided that such goods and services are used for business purposes in the Republic, you should submit a request online at least 20 days before the withdrawal date and not by September 30, 2019 as provided by the relevant Directive.

 

The submission of the electronic refund application to UK via the electronic portal in the Republic at least 20 days before the withdrawal date is important since from the withdrawal date the e-portal will not recognize UK as a member State and therefore such applications will not be allowed to be forwarded. Timely submission of your application will ensure that time will be adequate to enable the Tax Department to forward your application to the United Kingdom tax authorities before withdrawal day and that your application will be received by United Kingdom before it ceases to be a Member State.

 

 

VAT paid from 01/01/2019 – withdrawal date of UK from the EU

Regarding the VAT incurred in the UK from 01/01/2019 until withdrawal date imposed on goods or services supplied to you by other taxable persons in the United Kingdom or on the importation of goods in that Member State, provided that such goods and services are used for business purposes in the Republic, you can submit your request based on the provisions as set out in the 13th VAT Directive (Directive 86/560/EEC).

 

Reporting requirements for submission of INTRASTAT Declarations

According to the latest developments, in the absence of a Withdrawal Agreement, the UK will be treated as a non-EU country as of 13 April 2019.

In light of the above, the INTRASTAT declarations for the reference month April 2019 should include arrivals and dispatches of goods with the United Kingdom which will take place until 12 April 2019 (reference period 01/04/2019-12/04/2019). The imports and exports of goods from/to United Kingdom as from 13 April 2019 and onwards will not be considered as intra-community movements, therefore will not be declared via INTRASTAT declarations.

In case of any change of the above, a new announcement will be issued.

 

Declaration of Recapitulative Statements (VIES)

According to the latest developments, in the absence of a Withdrawal Agreement, the UK will be treated as a non-EU country as of 13 April 2019.

In light of the above, goods and services supplied until 12 April 2019 to entities identified for VAT in the United Kingdom have to be declared in the Recapitulative Statements (VIES). Supplies of goods and services to the United Kingdom as from 13 April 2019 will not be intra-community supplies, therefore will not be declared in the Recapitulative Statements.

In case of any change of the above, a new announcement will be issued.