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Brexit News : Transition period will take place on 31/12/2020

Brexit transition period and new agreement 

Since 31 January 2020, United Kingdom is no longer Member of the European Union. 

The  withdrawal agreement (2019 / C384 / 01) implement a transition period, until 31 December 2020. This transition period allows both parties to negotiate the framework of their future relationship, like VAT & customs aspects. It allows the United Kingdom to continue to benefit from  the provisions of the Internal Market Agreement, the Customs Union and  Trade agreements signed by the European Union (41 agreements  covering 72 countries), postponing the re-establishment of the customs border until 1 January 2021. 

On June 12th, the United Kingdom, formally notified  the European Commission, of its intention not to extend the transitional period after December 31, 2020, regardless of the progress of negotiations between the European Union and the United Kingdom (global, partial or no agreement “Hard Brexit”). From 1 January 2021, the United Kingdom will be a third country to the European Union. 

Until then an agreement must be reached between the two parties and ratified in order to enter into force on 1 January 2021, a legal text must be presented to the European and British Parliaments by 31 October 2020 at the latest so that it can enter into force after the transition period. 

What about the European and British businesses? 

Only 5 months and a few weeks are remaining for European and British companies to fully understand the consequences of the withdrawal e.g. tax registration with the competent authorities, regulatory constraints, integration of import and export customs schemes, clearance processes, payment of duties and taxes, in order to take appropriate measures to keep business flows as smoothly as possible. From 1 January 2021, the movement of goods between the European Union and the United Kingdom will be considered as imports and exports, and not more than intra-Community exchanges. 

This complex economic environment requires your company to be prepared for the post-Brexit era. 

Eurotax, with its VAT & customs expertise, will help you to prepare for post-Brexit transition.  

Some formalities will take several weeks to be completed. Anticipation and preparatioon are the key words. 

Do not hesitate to contact us for more information. 

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