Doing business between the UK and France – your VAT questions answered
Article 4 minute read

Doing business between the UK and France – your VAT questions answered

13 February 2019

Operating between the United Kingdom and France, and wondering how Brexit changes your VAT obligations? Here are answers to some of the most frequently-asked questions.

When the United Kingdom leaves the European Union (EU) from 30 March 2019, it will become a third country, that is, a jurisdiction outside the EU and also the European Economic Area (EEA). We’ve  recently discussed the tax implications of a no-deal Brexit and examined how it would change the VAT refund procedure

Following are answers to some frequently-asked-questions that our VAT team is receiving from businesses trading between the UK and France. While this information was correct at the time of publishing, Brexit negotiations are ongoing and some answers may change. For the most up-to-date information, or to ask a question not addressed here, don’t hesitate to make an enquiry with us. 

I am a British company making intra-community acquisitions / deliveries with French operators; what are the VAT consequences of Brexit? 

If the UK and the EU are unable to reach a deal and the UK makes a ‘no-deal’ exit, the VAT refund procedure will change immediately.

Currently, VAT on goods and services acquired in France by a company established in another Member State of the EU for the purposes of its economic activity may be refundable. The refund of VAT is subject to conditions related to both the company itself (the company should not be established in France) and to the operations performed (the delivery of goods or services is not located in France) and is facilitated through the EU Directive 2008/09/EC (formerly the 8th Directive).

After Brexit, British companies requesting VAT refunds in France will likely have to follow a completely different process applicable for companies established outside the EU; this being the Thirteenth VAT Directive (86/560/EEC). Similarly, those reimbursements will be subject to conditions related to the companies and to the transactions carried out. The main characteristic of this process is the obligation for the taxable person to appoint a taxable representative established in France who will be responsible on the company’s behalf. 

I use the British VAT mini-box (MOSS), what should I do after Brexit?

if we see a no-deal Brexit, the UK will no longer be allowed to connect to EU computer systems. If your company is identified for MOSS in the UK and wants to benefit from this simplification process, you would have to register your company for VAT purposes in any EU member state, France for example.

I am a UK company with VAT reporting obligations in France, should I appoint a tax representative?

If the UK leaves the EU with no deal and is not listed as a State with whom France has signed a mutual assistance agreement, an UK company not established in an EU country will have to appoint a tax representative. 

This representative must be a company established in France, with a certain “level of taxpayer honesty” and accredited by the tax authorities in France. The tax representative is jointly responsible for all the company’s French tax obligations (declaration and payment). 

If your company already has a French tax representative, you are free to keep your current tax representative or to designate a new one. However, you may only have one tax representative for all your French tax obligations (VAT, other indirect taxes, PAYE etc.). 

How do I verify a UK VAT number after Brexit?

Every company liable for VAT in the EU has an individual tax identification number issued by the tax office. This number must be written on invoices and VAT and intrastat declarations submitted by the company. 

In order to prevent fraud and scams, companies with commercial relations with European partners (customers or suppliers) must check the validity of their partner’s VAT number. 

For European companies, this verification can be done on the European VAT Information Exchange System (VIES).

From 30 March 2019, it will no longer be possible to check the validity of a UK VAT number on the VIES website. In order to control the company’s UK VAT number, you may ask the company for the copy of a recent certificate of taxable status or any document from the local administration confirming the validity of the VAT number, and the company’s name and address.

Talk to us

Brexit’s impact on VAT rules could be frightening for UK companies doing business in other European countries, as well as for non-UK companies doing business with the UK.

TMF Group’s tax teams located in the UK, France and throughout the rest of Europe are ready to help you understand what the Brexit consequences are for your business, and guide you through the changes. Our local offices are authorised to be appointed as your local tax representative for both foreign VAT recovery claims through the 13th Directive process, or local VAT registrations.

Need more information? Contact us today.

Replay our webinar with Brexit Partners: how prepared is our competition?

Written by

Amaya Chiavelli

VAT & IPT Assistant Manager
Amaya

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