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Brexit and VAT: Consequences of the UK Leaving the European Union

Due to the United Kingdom leaving the European Union, as of 1 January 2021, the terms for intra-Community transactions carried out between Monaco and the United Kingdom are from now on replaced by the terms for import and export from or to a third country.

Unlike intra-Community transactions, import and export transactions require specific declarations to be submitted to the Customs and Excise Department when the transactions in question are carried out.

On export, exemption from Value Added Tax must be justified in accordance with the provisions of Article A-52 of the appendix to the tax code relating to turnover.  On importation, the Value Added Tax must be calculated in accordance with the provisions of Article 83 of the aforementioned code.

Consequently, transactions carried out with the United Kingdom as from 1 January 2021 will no longer give rise to the submission of European declarations for services and/or trade in goods.

Furthermore, Monegasque companies that do not carry out taxable transactions in the United Kingdom may apply for a refund of VAT incurred for the acquisition of goods or services in the United Kingdom for the year 2020 via the e-RMB-EU service until 31 March 2021, in accordance, as before, with the special refund rules set out in Council Directive 2008/9/EC of 12 February 2008.

However, this procedure, which is reserved for persons subject to tax in the EU, is no longer applicable to requests for refunds of VAT incurred in the United Kingdom from 1 January 2021.  These applications will have to be addressed directly to the UK Tax Authorities in accordance with the legal procedure provided for by the United Kingdom.


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