Brexit import duties explained for goods arriving from the United Kingdom

As we well know, the transitional period for the withdrawal of the United Kingdom from the European Union ended on December 31, 2020. This means that the United Kingdom is now officially a third country and that European Union law can no longer apply. In customs terms, from January 1, 2021, the United Kingdom receives the same treatment as any other country not belonging to the European Union. What do we have to understand from now on? That customs procedures and formalities now apply to trade between Cyprus and the United Kingdom.

What changes will occur after the transitional period of Brexit? Specifically, sales of goods made to the said territory will no longer be considered intra-community deliveries and will become exempt exports. Furthermore, the distance sales scheme will no longer apply. Therefore, companies in Cyprus should not charge any VAT on sales to individuals. By purchasing the products, British buyers will be making an import (an export for Cypriots).

In this context, purchases of goods from Cyprus will become imports. This will force us to satisfy VAT in customs. And, depending on the products, to satisfy tariffs. The same occurs with the import of the goods arriving from the United Kingdom: goods purchases from the United Kingdom will become imports.

All purchases, also online, that are made to countries outside the European Union are imports and must pass customs procedures, as well as pay the VAT and the corresponding tariffs. Since the beginning of January, goods that come from the United Kingdom also have this consideration. So, since January 2021, you must add import costs to any product you buy from a British website: although for now no tariffs are paid, they will charge you the commission for customs procedures and the corresponding VAT depending on the product, which will be the general (21%), the reduced (10%) or the super-reduced (4%). Important: the current VAT exemption for products with a value of fewer than 22 euros disappears on June 30.

The withdrawal of the United Kingdom from the European Union, the single market and the customs union created barriers to cross-border trade and exchanges that did not exist before January 1, 2021. The consequences for public administrations, businesses and citizens were inevitable, broad, and far-reaching, even with the Trade and Cooperation Agreement between the European Union and the United Kingdom. To assist companies, detailed guidelines have been published on a wide range of specific topics. Among the relevant guidelines in the tax and customs field we find: Communication on excise duties, Value added tax (VAT) on merchandise, Value added tax on services and customs.

All these guidelines can be found in detail at https://ec.europa.eu/info/relations-united-kingdom/overview/consequences-public-administrations-businesses-and-citizens-eu_en.