What impact does Brexit have on value-added tax?
June 11, 2024 | 40,00 EUR | answered by Friedhelm Sauer
Dear tax advisor,
I am reaching out to you as a business owner who is confronted with the issue of value added tax and concerned about the implications of Brexit on my business. As an online seller, I not only sell my products in Germany but also in the UK. With the United Kingdom exiting the EU, I am wondering what consequences this will have for value added tax.
Currently, I am properly paying my VAT in Germany and the UK. However, I am now concerned that Brexit may lead to changes that could affect my accounting and VAT declaration.
I am particularly worried about questions such as: Will my sales to British customers now be treated as exports and will I need to provide special documentation for this? Are there new regulations regarding invoicing and the amount of VAT that I need to consider? How will returns of goods from the UK and the associated tax consequences be handled?
As Brexit has been repeatedly delayed in recent months and the exact conditions were unclear until the last minute, I am unsure how to prepare as a business owner. Therefore, I am seeking your expertise and support to understand the impact of Brexit on VAT for my company and what steps I may need to take to prepare for it.
Thank you in advance for your assistance.
Kind regards,
Christiane Dietrich
Dear Mrs. Dietrich,
Thank you for your question regarding value added tax in relation to Brexit and the impact on your online business as a seller who is active in both Germany and the UK.
Brexit does indeed have implications on the VAT regulations between the United Kingdom and the EU. After the UK's withdrawal from the EU, the same regulations as for third countries generally apply. This means that deliveries of goods between the EU and the UK are treated as export transactions.
For you as an online seller, this means that when selling your products to the UK, you are now conducting export transactions and must provide appropriate evidence such as export documents. This may affect your accounting and VAT declaration, as you must now declare the sales as export deliveries.
Regarding invoicing and the amount of VAT, there are also changes to consider. For sales to the UK, you must now also take into account and indicate the UK VAT rates on your invoices. Additionally, you must ensure that your invoices comply with the requirements for export transactions.
Returns of goods from the UK may also have tax implications. It is important to note that returns are treated as imports into the EU and import duties and VAT may apply. You should inform yourself in advance about the exact regulations and potentially make necessary arrangements.
To prepare for the new VAT regulations post-Brexit, I recommend that you contact your tax advisor in a timely manner. Together, you can assess which specific steps are necessary for your business and how you can best prepare for them.
I hope this information is helpful to you and I am available for any further questions.
Best regards,
Friedhelm Sauer
