SLOVENIA: UK withdrawal from the European Union (BREXIT) and what does this means for Slovenian VAT field

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SLOVENIA: UK withdrawal from the European Union (BREXIT) and what does this means for Slovenian VAT field

On 29 of March 2017, United Kingdom notified European Council of the decision to withdraw from European Union. The exit procedure is further defined by Article 50 of the Treaty on European Union. In accordance with that Article, United Kingdom, as a rule from 29 th of March 2019 (two years after the notification), will no longer be a member of European Union. The method of exit depends on whether United Kingdom will leave European Union without agreement or with it.

British Parliament will again vote on the separation agreement reached in November, no later than 12th of March 2019, two weeks before the foreseen date for UK’s withdrawal from EU.

In case a separation agreement is concluded

In the event that the transitional period is agreed from 30 of March 2019 until the end of 2020, certain rules of the single market and the customs union will continue to apply. In the transitional period, United Kingdom is expected to continue to respect the rules of the single market and the customs union. This means that by the end of the transitional period free movement of goods and services will continue to exist.

In the event that a separation agreement is not concluded

If no agreement is reached, United Kingdom will withdraw from EU without a transitional period and become a third country. EU rules will cease to apply from the moment of withdrawal in the field of customs and indirect taxation for United Kingdom. Goods brought into EU customs territory of United Kingdom or brought from the customs territory of EU to United Kingdom will be subject to customs supervision, customs controls and related import duties.

Communication for economic operators

By means of communication, FURS informed Slovenian economic operators of the necessary information to prepare for UK withdrawal from the European Union – BREXIT (FURS).

Area of ​​VAT

VAT on supplies of goods and services

For the supply and movement of goods between EU and United Kingdom, from the date of exit, the VAT rules for import and export will apply. This means that the entry of goods from United Kingdom to Union VAT area will be subject to customs supervision and may also be subject to customs controls in accordance with Regulation (EU) No. 952/2013 of 9th of October 2013 on Union Customs Code.

The place of supply of services depends on various factors, such as the nature of service, whether the recipient of the service is a taxable person or not, the place where the service is provided, etc. The withdrawal of United Kingdom may affect United Kingdom taxable persons providing services in EU after the date of exit and EU taxable persons providing services in United Kingdom after the date of exit.

 Mini VEM

For taxpayers who are identified in the mini VEM arrangements (MOSS) in one of the Member States and which provide telecommunications services, broadcasting services and electronic services to end consumers in UK, the obligation to meet VAT in the normal way applies until the date of exit. Taxpayers identified in mini VEM regime in UK and providing telecommunications services, broadcasting services and electronic services to end consumers in one of EU Member States cannot remain identified in the mini VEM in UK on the day of their withdrawal from EU. For that reason, it was proposed to them that they be identified as soon as possible in the regulation of mini VEM in one of EU Member States.

VAT refund

Taxpayers based in Slovenia who require a VAT refund in UK are recommended to submit a refund request for the year 2018 as soon as possible, by 29th of March 2019 at the latest. Corrections of the claims already submitted by 29th of March 2019 will no longer be possible, but the taxpayer will have to communicate the correct information directly to the CC. The submission of applications for the period from 1st of January to 29th of March 2019 is expected to take place under the rules of the CC applicable to taxable persons from third countries. Taxpayers from the UK, who will, after the exit date, wish to claim a VAT refund in Slovenia, will be able to apply for a refund according to the rules applicable to taxable persons from third countries.

2019-03-05T11:37:37+00:00 05.03.2019|Slovenia, Taxes, UK, VAT|