23 March 2019 will mark the end of the two years' time for the UK and the EU to negotiate an exit deal for the former. After the UK Parliament rejected the brexit agreement proposed by the government, it is possible that on 30 March 2019 the United Kingdom will become a country outside the EU (a third country). This will affect the treatment of transactions with the country for the purposes of goods and services tax (VAT).

There is still some time left and the final outcome of brexit negotiations is yet unknown. However, businesses engaged in cross-border transactions with the UK should be aware that a no-deal brexit will mean having to change the tax treatment of those transactions. If the UK in fact does leave the EU without a deal, the following VAT rules will apply as of 30 March 2019:

  • goods brought into Poland from the United Kingdom will be treated as imports and those supplied from Poland into the United Kingdom as exports;
  • any importation of goods into or from the UK will involve customs formalities, so businesses may wish to contact customs agencies to deal with the clearance process;
  • goods imported from the United Kingdom may be subject to customs duties, just as goods currently supplied from third countries.

The changes will also apply to triangular transactions which now fall within the simplified compliance regime. In the event of a no-deal brexit, the parties to triangular transactions will as of 30 March 2019 no longer be entitled to use the simplified procedures.

If these issues pertain to your business and you are interested in our assistance, please contact your WTS&SAJA consultant or our office.

Doradztwo Podatkowe WTS&SAJA Sp. z o.o.

Bałtyk Building, 13th floor

ul. Roosevelta 22

60-829 Poznań

tel. (+48) 61 643 45 50

Warsaw Office

Central Tower, 22nd floor

Al. Jerozolimskie 81

02-001 Warszawa

This Newsletter is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.

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