Brexit

On 31 January 2020 the effective exit of the United Kingdom from the European Union took place.

The European Union and the United Kingdom have reached a broad and ambitious agreement on their future relationship.

In relation to the movement of goods, this agreement implies that no tariffs will be required nor will quotas be established for goods originating from both Parties, although the movements of goods from January 1, 2021 will be subject to customs formalities.

Consequences of Brexit for VAT purposes

The entry of goods into the territory of application of Spanish VAT (Peninsula and Balearic Islands) from the United Kingdom will be subject to settlement of VAT at the time of importation by Customs, unless the company opts for deferred VAT payment.

Goods that are transported from the territory of application of Spanish VAT (the peninsula and the Balearic Islands) to the United Kingdom will be exports, and VAT-exempt.

However, trade in goods with Northern Ireland will be treated in the same way as trade with a Member State under the Northern Ireland Protocol. This treatment does not extend to services.

To avoid double taxation, goods whose transport from the United Kingdom to one of the 27 Member States begins before 1 January 2021 and arrives at its destination after that date must be presented to Customs but will not be taxed as an import but rather as an intra-Community acquisition, having to be included in form 349. Customs authorities may require the importer to provide proof of commencement of transport before 1 January 2021 using transport documents.