Exit of UK from the EU
1.2.2020 - 31.12.2020 - Transitional period
All transactions with UK during that transitional period will continue to be regulated as if UK is a Member State.
1.1.12021 – forward
As of January 1st, 2021, United Kingdom (UK) will exit from the European Union (EU) and will be a country outside the EU, 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 that 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 incurred in the UK from 1.1.2021– 31.12.2021 for business purposes, should be submitted based on the requirements of the 13th VAT Directive (Directive 86/560/EEC).
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.
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 .
On-going movements of goods from the United Kingdom to the Republic at the moment of its withdrawal on 31.12.2020
The dispatch or transport of goods from the United Kingdom to the territory of the Cyprus Rebublic (or vice versa) that will start before the end of the transition period, i.e. 31.12.2020 but will end after that transition period, according to Article 51(1) of the Withdrawal Agreement, will still be considered for VAT purposes as intra-EU transactions (intra-EU supplies and acquisitions of goods, or B2C supplies of goods taxable in the country of destination or of origin (distance sales of goods)) and not as exports/imports.
After the end of the transition period i.e. from 1.1.2021, at the time of arrival of those goods (ongoing movements before 1.1.2021) will, however, have to be presented to customs at the border of the Republic of Cyprus or of the United Kingdom accordingly. Customs authorities may request the importer to prove, by means of a transport document or any other document, that the dispatch or transport started before the end of the transition period.
The reporting obligations related to these transactions provided for in the VAT Directive such as the submission of recapitulative statements will still apply.
ANNOUNCEMENT REGARDING VAT REFUNDS UNDER DIRECTIVE 2008/9 (REFUNDS TO TAXABLE PERSONS IN OTHER MEMBER STATES) FOR BUSINESS EXPENSES INCURRED IN THE UNITED KINDOM DURING
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) i.e. 31.12.2020.
From 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 incurred in the United Kingdom for the expenses incurred by your company under the provisions of this Directive.
VAT incurred until 31.12.2020
Regarding the VAT incurred in the UK in 2020, 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 your business purposes in the Republic, you can submit your request based on the provisions as set out in this Directive, and can be done until 31.03.2021.
VAT incurred from 01.01.2021
Regarding the VAT incurred in the UK from 01.01.2021, that will be imposed on goods or services supplied to you by other taxable persons in the United Kingdom or on the importation of goods in the United Kingdom, provided that such goods and services are used for your 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).
Tax Department — 23 December, 2020