VAT Update March 2019 - Brexit and VAT issues
07 March 2019
The Cyprus Tax Department has circulated relevant announcements in relation to the effects of Brexit for VIES and Intrastat reporting as well as for the electronic VAT refund claims towards UK.
The United Kingdom submitted on 29 March 2017 the notification of its intention to withdraw from the European Union pursuant to Article 50 of the Treaty on European Union. In the absence of a Withdrawal Agreement, the UK will be treated as a non-EU country as of 30 March 2019.
VIES and Intrastat Reporting
Goods and services supplied to VATable entities in the UK until 29 March 2019 should be declared in the respective VIES and Intrastat returns. Supplies of goods and services to the United Kingdom as from 30 March 2019 onwards will not be considered intra-community supplies for VAT purposes, therefore they will not be declared in the respective returns.
Electronic VAT refund applications
Cyprus VAT registered businesses claiming input VAT on business expenses incurred in the UK during 2018 will have to submit their claim applications by 10th March 2019 (instead of the normal deadline being 30th of September) as per the provisions of Directive 2008/09/EC. After 29 March 2019 the provisions of the said Directive will cease in respect of the UK.
Furthermore, in relation to claiming input VAT on business expenses from the UK for the period 1/1/2019 – 29/3/2019, business will be able to file a claim under the provisions of the 13th Directive (86/560) as long as the relevant provisions are satisfied and provided a reciprocity agreement or reciprocal treatment for the recovery of VAT is in place between Cyprus and the UK.