Brexit, direct VAT identification for UK taxable persons

Revenue Agency, with resolution. 7 of February 1, 2021, clarified some aspects about the fulfillment of VAT obligations UK operators, once taxed in Italy, have formalized the United Kingdom’s exit from the European Union (Brexi) is.

In particular, it has raised doubts as to whether those who have A. VAT tax representative or VAT ID This representative may continue to use such identification for internal operations or, on the contrary, must make a request New VAT status as non-EU subjects.

Brexit, new from 1 January 2021

With the officialization of Brexit, therefore, from 1 January 2021, commercial exchanges with the United Kingdom, following its withdrawal from the European Union, according to Article 50 of the Treaty of European Union (TEU), a fiscal rule and formalities. And the customs nature applies with third countries.

Therefore, according to VAT law, the non-resident subject – the European Union or the non-European Union – works within the territory of the state Relevant transactions for VAT purposes, May fulfill related obligations or exercise related rights:

  • By appointing a resident tax representative in the territory of the state,

  • Or alternatively, Identify directly, Article 35 — Behind the presidential decision. 633/1972.

This article, in fact, provides for non-resident subjects who undertake business, arts, or profession activities in a third country, with legal instruments governing mutual aid in taxation using direct identification for VAT purposes Can. Indirect, similarly. Provisions of directives of the European Union.

Necessary to verify the existence of these conditions Recognition of direct identity, The agency analyzed the agreement signed between the United Kingdom and the European Union on 24 December 2020 and the related one Protocol on administrative cooperation and the fight against VAT fraud and mutual assistance in the recovery of claims arising from duties and taxes.

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Brexit, UK-EU Administrative Support Protocol

This final protocol on VAT administrative assistance provides for the following forms of assistance:

  • Information Request;

  • Request for information without prior request;

  • Attendance at administrative offices and participation in joint administrative inquiries;

  • Request for administrative notification;

  • Simultaneous investigation.

Since, based on examination of the provisions contained in the above protocol, the latter may be considered similar to the administrative co-operation instruments already implemented in the European Union, the agency believes It is possible for UK taxable individuals to continue to apply the provisions of direct identification for VAT purposes, According to Art. 35-ter, paragraph 5, VAT decree.

Brexit, Yes to Simplified Governance of Direct Identity

As per Resolution no. 7 / E / 2021, Therefore, as per the above protocol, UK taxable individuals can reach out to the Direct Identification Institution to fulfill their obligations and use their VAT rights in Italy as an alternative to appointing a tax representative, similarly until 31 December 2020.

The practice document also establishes an important principle of continuity: UK merchants who already have a VAT tax representative or VAT ID in Italy, who have been appointed or issued before 1 January 2021, can use it for internal operations Can.

With this specification, the agency removes an uncertainty that arose following the publication of the previous reply, with which it was argued that pending official clarifications on the scope of the new EU-UK trade agreements, UK operators, Even if already identified directly in Italy, revoke this identification and appoint a tax representative.

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