5 solutions to solve your BREXIT related customs issues

Transcription

1 5 solutions to solve your BREXIT related customs issues

2 You are concerned by Brexit if... You sell goods or provide services in the United Kingdom or in the European Union. You buy goods or use a service provider established in the United Kingdom or in the European Union. You have a subsidiary in the United Kingdom or in the European Union. You have European employees in the United Kingdom or British employees in the European Union. You transport people or goods. Your business is based on the protection of intellectual property rights active in the United Kingdom or in the European Union (patents, trademarks, geographical indications, plant variety certificates, etc.). You are involved in a European or British project. You perform missions in the United Kingdom or in the European Union. 2

3 At midnight on 29th March 2019 (Brussels time), the United Kingdom will become what EU treaties define as a third country towards the 27 EU members. This major event will have a certain impact in terms of cost and customer experience. Our teams are ready to provide you with optimised solutions and to limit the consequences of this significant disruption: engineering of physical and information flows, design and implementation of operational solutions. In this communication, discover with us the solutions that will allow you to solve the major customs issues related to Brexit. O. THOUARD, GEFCO s Customs and Tax Director Brexit main milestones and the consequences to your supply chain 24th November 2018: DEAL But no ratification by UK and EU Parliaments end of negotiations BREXIT: 29th March 2019 HARD BREXIT DEAL And ratification by UK and EU Parliaments SOFT BREXIT Transition period up to 31 st December 2020 SUPPLY CHAIN DISRUPTION SERVICE LEVEL FINANCE AND CASH 3

4 Brexit: state of negotiations and options for the future United Kingdom withdrawal agreement negotiated between Theresa May (British Prime Minister) and Michel Barnier (Chief Negotiator for the EU-27) has been validated by the governments of the EU countries on the occasion of an exceptional summit on the 25th November The agreement provides: The opening of a transitional period during which each party must strive to put in place a viable agreement, in particular for the management of the Irish border. The possibility of requesting an extension of the transition period (maximum 2 years) in the event of disagreement before 30 June At the end of this period, if no solution is found, the withdrawal agreement provides for a «backstop» solution that would include the whole of the United Kingdom in the European Customs Union. The agreement has been rejected on the 15th of January by the British Parliament and is still being exchanged for ratification. There are still different possible options than "Hard Brexit" such as: The postponed date of withdrawal A "Hard Brexit" including negotiations mainly related to the status of foreign citizens living in the UK and British citizens living in Europe, transport license recognition, Trade Agreements A new deal A new referendum As soon as the United Kingdom will become a third country, border controls will be restored. SOFT BREXIT Some solutions presented in this document will be valid in both cases, as stipulated in each of the pages: Note that when the United Kingdom leaves the European Union, the country will also exit the common market, which will have implications that go well beyond the customs issues addressed in this document. 4

5 GEFCO S EXPERTISE IN CUSTOMS AND TAX REPRESENTATION: KEY FIGURES A central customs and tax engineering department AEO Certification (16 countries) Customs broker status since 1971 (France) 230 customs experts 350,000 customs declarations per year 25 years of experience in tax representation Accompanying more than 150 customers 1 central management for Brexit issues Optimise and simplify your customs operations from and to the United Kingdom THE RESTORATION OF THE CUSTOMS BORDER BETWEEN THE UNITED KINGDOM AND THE EUROPEAN UNION IMPLIES FORMALITIES AND CUSTOMS AND NON-CUSTOMS CONTROLS (SANITARY AND PHYTOSANITARY CONTROLS). FAILURE TO COMPLETE THESE FORMALITIES CAN LEAD TO BLOCKAGES AND INTERRUPTION OF YOUR SUPPLY CHAIN. GEFCO offers you solutions to manage the complexities of Brexit and to simplify and optimise your supply chain: Support for customs and tax (VAT) diagnosis of your company with regards to Brexit and implementation of the best customs organisation possible. Choice of customs clearance locations: at customer s site, in the warehouse, at the border or at a logistics provider. Implementation of appropriate customs authorisations to carry out import-export declarations, transits and customs zones. Implementation of EDI solutions to accelerate and optimise customs clearance. SOFT BREXIT SALES SALES SALES Suppliers Hub Warehouse Plant Distribution centre Points of sales 5

6 After Brexit, crossing the border will affect the fluidity of your business if all obligations and regulations are not met. Penalties, blocked goods, customs and fiscal controls, can disrupt your physical flows and impact your cash flow. GEFCO Group AEO certified customs expertise enables you to benefit from a solid customs culture with robust processes in order to move towards zero risk: support and advice for the identification of the appropriate INCOTERM, support and assistance with the implementation for customs compliance are all areas in which GEFCO can help to smooth the border crossing in full compliance. O. THOUARD, GEFCO s Customs and Tax Director Ensure fully compliant border crossing Support and advice to identify the good INCOTERM EXW - With the EXW, the export declaration is the responsibility of the buyer. In the event of a tax audit, you will not be able to justify your export duty-free sale. - With the DDP, the import declaration is the responsibility of the seller. You therefore do not control the risks related to document flow and will be responsible for non-compliance. SOFT BREXIT DDP In both cases, the seller and the buyer do not control their customs operations in a country where their companies are making sales. It is therefore strongly recommended not to use these INCOTERMS in future relations between the United Kingdom and the European Union (except in case of VAT registration of the country of import or export). Experts in customs since 1971, our GEFCO Customs & Tax teams advise you on the most appropriate INCOTERMS according to your flows in order to optimise and secure your operations from / to the United Kingdom. Support and help with document compliance Today, you issue tax-free intra-community sales between the United Kingdom and the various countries of the European Union. After Brexit, you will issue export tax free invoices for each shipment. In the absence of correctly worded commercial documents, these invoices can be the object of a recovery of VAT during a fiscal control. In the context of this complex regulatory evolution, our dedicated teams are at your side to guarantee the appropriate support and compliance of your operations with international regulations. 6

7 BUSINESS CASES GEFCO exports for an automotive equipment supplier located in Germany under the Outward Process Relief (OPR) regime automotive parts to Macedonia. The processed parts are re-exported from Macedonia to Germany. Payment in Germany of customs duties on the value of the finished product after deduction of the value of the parts exported to Macedonia. GEFCO has set up an Inward Process Relief (IPR) regime for the pharmaceutical industry in Serbia for the manufacture of medicines in the Czech Republic before re-export to Serbia. Optimise the payment of your customs duties IN CASE OF THE ABSENCE OF A TRADE AGREEMENT BETWEEN THE UNITED KINGDOM AND THE EUROPEAN UNION, YOU WILL HAVE TO PAY THE CUSTOMS DUTIES AT THE FULL RATE ACCORDING TO THE BASIC TARIFF RULES OF THE WTO. SIGNIFICANT FINANCIAL IMPACTS ON YOUR BUSINESS ARE EXPECTED. GEFCO offers customs engineering services and the implementation of Inward or Outward processing solutions in the event of a return flow of goods between two separate customs zones. These solutions allow you to eliminate or reduce significantly the customs duties to be paid at the border crossing. To illustrate this problem, here is an example of Inward or Outward Process Relief solutions that we can implement between the United Kingdom and the European Union. 1 2 Export under OUTWARD PROCESS RELIEF Import under INWARD PROCESS RELIEF Exemption from duties and taxes on goods imported and intended for processing / machining Exemption from duties and taxes on raw materials imported into the Czech Republic. EUROPEAN UNION UNITED KINGDOM Transformation/Processing 4 3 Import on return under OUTWARD PROCESS RELIEF Payment of duties and taxes on value added alone resulting from the transformation in the United Kingdom and not on the total value of the finished product Export under OUTWARD PROCESS RELIEF 7

8 BUSINESS CASE Background: an Indian company wants to import, store and sell goods in 3 European Union countries using INCOTERM DDP. GEFCO solution: Flows engineering Design and implementation of a complete solution Registration of the Indian company for VAT in Germany, France and the Czech Republic Optimisation of sea and road transport Customs clearance exempted from VAT on import Storage in each of the 3 countries Sales to the end customer Customer benefits: Securing logistics with a door-to-door solution Financial gain with the optimisation of transport costs and the exemption of VAT on import Acceleration of commercial activity in Europe Have an expert handle your VAT BREXIT WILL GENERATE CHANGES TO THE VAT RULES THAT WILL NOTABLY IMPLY THE OBLIGATION TO ENTRUST THE ADMINISTRATIVE FORMALITIES OF FISCAL REPRESENTATION TO AN ESTABLISHED COMPANY (EXTERNAL SERVICE PROVIDER, SUBSIDIARY...) AND CAUSE A FINANCIAL AND CASH IMPACT. There is a real risk for companies established in the United Kingdom or in the European Union not recovering VAT. For more than 25 years, GEFCO has supported its customers in the management of their VAT obligations in the European Union and outside the European Union*: regulatory watch, engineering and design of optimised logistics schemes, registration with local tax authorities, support during tax audit, coordination of operations by a single contact, reporting declarations, payment and recovery of VAT, recovery of VAT on your travel expenses. UNITED KINGDOM EUROPEAN UNION (27) OPERATIONS THAT MAY REQUIRE A REGISTRATION FOR VAT PURPOSES BEFORE AFTER VAT NUMBER MANAGED BY THE COMPANY ESTABLISHED IN THE UNITED KINGDOM VAT NUMBER MANAGED BY A TAX REPRESENTATIVE ESTABLISHED IN THE EUROPEAN UNION (27) Import (Tax free according to conditions) Storage Local purchase Local sales Intra-Community purchases excluding tax Intra-community sales excluding tax Export SOFT BREXIT This scheme is also valid for companies established in the 27 countries of the European Union and having or needing a VAT number in the United Kingdom. * Valid in some countries only, according to local VAT legislation. 8

9 25 YEARS OF EXPERIENCE IN MANAGING REUSABLE PACKAGING At the central level: design, optimisation, planning & monitoring of international packaging flow solutions At the regional level: collection and maintenance At the local level: on site auditing, training & support, local monitoring Benefit from smart solutions for your reusable packaging BREXIT WILL GENERATE COMPLEXITIES IN THE MANAGEMENT OF REUSABLE PACKAGING WITH CUSTOMS OBLIGATIONS AS WELL AS A POTENTIAL FINANCIAL IMPACT ON YOUR ACTIVITY. GEFCO Customs & Tax teams will support you in designing and monitoring optimised solutions for post-brexit management of your reusable packaging: implementation of temporary importexport solutions exempting you from customs duties, establishment of material accounting, implementation of web tracking solutions for our packaging. SITUATION WITHOUT OPTIMISATION Export Material and packaging Import 23 DEDICATED REUSABLE PACKAGING CENTRES Import to the EU Empty packaging Customs duties- Import VAT (if applicable) Customs duties No VAT (VAT Guidance 23/08/2018) Export from the UK OUR TEMPORARY IMPORT / EXPORT SOLUTIONS 1,700 CUSTOMERS Export Material and packaging Empty packaging Temporary import No Customs duties No VAT (VAT Guidance 23/08/2018) 6.5 MILLION OWN PACKAGING UNITS Reimport after a temporary export No Customs duties- No import VAT Conditions for implementing the optimised scheme: Capacity of all actors to follow the packaging and to issue, for each empty and full packaging flow, invoices including the number of packaging Be responsible for import and export material accounting Re-export after temporary import 9

10 BREXIT: significant risks for your supply chain > GEFCO solutions tailored to your challenges 5 MAIN RISKS 5 SOLUTIONS BENEFITS Delayed loading in case of noncompliance of customs paperwork and procedures Non compliance: Export regulations INCOTERMS Customs duties payment betweeen the United Kingdom and European Union Optimise and simplify your customs operations from and to the United Kingdom Support for customs and tax (VAT) diagnosis of your company Choice of customs clearance locations Implementation of appropriate customs authorisations Implementation of EDI solutions Ensure fully compliant border crossing Support and advice to identify the appropriate INCOTERMS Support and help with document compliance Optimise the payment of your customs duties Customs engineering Implementation of Inward / Outward process relief solutions TRANSIT TIME CUSTOMS DUTIES CASH FLOW Change of VAT rules Payment of duties and taxes on reusable packaging Have an expert handle your VAT Support in the management of European or British VAT numbers Benefit from smart solutions for your reusable packaging Implementation of temporary import-export solutions exempt from customs duties Establishing material accounting Implementation of web tracking solutions for our packaging FLUIDITY OF YOUR SUPPLY CHAIN Contact our experts: brexit@gefco.net