Do I need a VAT fiscal representative after Brexit?
- Mar 30, 2021 | Richard Asquith
As UK left the EU VAT regime on 31 December 2020, UK and EU ecommerce sellers or B2B supply chain operators may have the obligation to appoint VAT Fiscal Representatives for their non-resident VAT returns.
However, a Brexit free trade deal with no goods tariffs or quotas was announced on 24 December 2020. This included a VAT mutual assistance Protocol providing for cooperation on outstanding tax liabilities between the UK and EU member states. As with Norway, this implies UK businesses will not require a VAT fiscal representative in some EU member states that normally mandate this e.g. France and Italy.
Poland has indicated that UK companies with a local foreign VAT registration should have already appointed a Fiscal Rep by 1 January 2021 or they will infringe local rules even on their last 2020 filings due in 2021. Bulgaria is looking for the appointment of a Fiscal Representative by the end of March 2021 for e-commerce sellers. Portugal by 31 June 2021.
UK importers into the EU Union countries will need a Customs duties and VAT indirect fiscal representative if their freight forwarder will not act as their direct representative.
UK businesses require EU Fiscal Representative after Brexit?
Following the conclusion of the EU-UK Trade and Cooperation Agreement, UK companies now require a Fiscal Rep in the following countries:
|EU Country||Fiscal Rep for UK businesses?||Comments|
|1||Austria||Yes||VAT agent required with no shared liability|
|2||Belgium||No - Subject to confirmation||EU-UK Mutual Assistance Protocol removes requirement but subject to EU Parliament ratifying Agreement. Tax office has suspended the obligation.|
|3||Bulgaria||Yes||Should be in place by 15 Jan 2021 for distance sellers; 31 Mar 2021 for other sellers|
|4||Croatia||No||Suspended Fiscal Rep requirement subject to ratification of EU-UK Trade and Cooperation Agreement|
|5||Cyprus||No||Suspended Fiscal Rep requirement subject to ratification of EU-UK Trade and Cooperation Agreement|
|7||Denmark||Yes||Expected to drop the requirement for UK businesses shortly|
|9||Finland||No||EU-UK Mutual Assistance Protocol removes requirement but authorities requesting fiscal rep until at least EU Parliament ratifies Agreement|
|10||France||No||EU-UK Mutual Assistance Protocol removes requirement|
|11||Germany||No||VAT agent required with no shared liability|
|13||Hungary||Yes||Must appoint fiscal rep by 15 Jan to avoid cancelled registration|
|15||Italy||No||EU-UK Mutual Assistance Protocol removes requirement.|
|17||Lithuania||No||EU-UK Mutual Assistance Protocol removes requirement|
|18||Luxembourg||No||May require tax office cash deposit|
|20||Netherlands||No||For Article 23 import VAT licenses; UK distance selling|
|21||Poland||No||Has reversed its decision to require a Fiscal Rep for UK businesses.|
|22||Portugal||Yes||Deadline of 30 June 2021|
|23||Romania||Yes||UK VAT registrations have been cancelled. Businesses must no reapply for fiscal rep.|
|26||Spain||No||EU-UK Mutual Assistance Protocol removes requirement|
|27||Sweden||Yes||EU-UK Mutual Assistance Protocol removes requirement - authorities confirm will continue for time being without fiscal rep requirement for UK taxpayers (some exceptions, eg importing)|
Countries such as the Netherlands require a Fiscal Representative for special schemes such as import VAT deferment.
Avalara can help with a global Fiscal Rep service
Avalara offers a global Fiscal Representative service as part of its international VAT and GST registration and returns service. This helps thousands of businesses of all sizes accurately and easily manage their tax compliance obligations on a fully automated service.
Avalara can guide you when you need a Fiscal Representative, and ensure the whole process is fully co-ordinated in any country with single point-of-contact Account Manager. Contact us for details.
Do EU businesses need a UK Fiscal Representative after Brexit?
No. The UK does not require EU or non-EU resident businesses to appoint a Fiscal Representative. The one caveat is that the UK’s HMRC can impose the obligation on a business with a poor VAT compliance record. This is sometime applied on e-commerce sellers who fail to VAT register or fully declare VAT due.
Role of a Fiscal Representative
A Fiscal Representative is a special type of VAT agent for foreign businesses with a VAT registration in another country. They are responsible for the correct calculation and reporting of VAT of their client, and are the first point of call for the local tax office in the case of questions or audits.
They are usually held jointly and severally liable for any unpaid or undeclared VAT of their non-resident clients. They therefore typically charge higher fees, and often require a bank guarantee or cash deposit to protect them against any client losses.
Need help with your UK VAT compliance?
Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.