Brexit after 1 January 2021 for suppliers of goods from the UK to the EU and Slovakia

Brexit after 1 January 2021 for suppliers of goods from the UK to the EU and Slovakia

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Zdroj: Pixabay

The withdrawal of the United Kingdom of Great Britain and Northern Island (UK) from the European Union or “Brexit” is based on the Withdrawal Agreement, the legal framework defining the settlement of existing obligations.

The transitional period started on 1 February 2020 and will run until 31 December 2020. During this time, there are no fundamental changes in doing business with the UK. It gives businesses room to prepare for the changes that are going to be happening in the movement of people, goods, services and capital after 1 January 2021, when the rules of the customs union cease to apply to the United Kingdom.

Starting on 1 January 2021, the UK will be a third country in the eyes of the EU.

The withdrawal of the UK and future relations between it and the EU are still being negotiated at the EU level.  In the negotiating process, taxes and financial services will be within the portfolio of Slovakia’s Ministry of Finance. However, financial services are not covered by the Free Trade Agreement (FTA) itself and therefore are to be specifically discussed in future relations with the UK.

The European Commission is issuing updated communications on its website to help prepare individual sectors for the end of the transition period and the new legal situation that will emerge on 1 January 2021, even if the EU and the UK fail to negotiate a Free Trade Agreement. The website is

https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership/future-partnership/getting-ready-end-transition-period_en

As the EU website says, Brexit will have far-reaching implications for the business sector regardless of the outcome of current negotiations and any negotiations after 1 January 2021 (as well as for public administration and citizens) and it is necessary to prepare for these changes.

Leaving the single market and the customs union is going to create additional barriers to trade and cross-border mobility for people, so both the Union and the United Kingdom will have to adapt. When the United Kingdom withdraws from the European Union, it will automatically and legally withdraw from all international agreements with it.

Trade-related changes under all circumstances

The following changes will not apply to trade between the EU and Northern Ireland, as the Protocol on Ireland and Northern Ireland is an integral part of the withdrawal agreement and will continue to be in force even after the end of the transitional period and will apply to any future partnership agreement.

It keeps EU rules on goods (including fiscal rules, indirect taxation, and non-fiscal rules) in place for Northern Ireland and the Union Customs Code will continue to apply there (see the box in Part III for more information).

Customs formalities and controls

Starting on 1 January 2021, the United Kingdom will cease to be part of the EU’s customs union. Therefore, customs formalities required by Union law will apply to all goods entering the customs territory of the Union from the United Kingdom and leaving the customs territory of the Union for the United Kingdom.

In the EU, customs authorities will be carrying out controls concerning the movement of goods  under ordinary risk-based rules applicable to third countries at all of the Union’s external borders, pursuant to the Union Customs Code and in compliance with Regulation (EU) No 952/2013 of 9 October 2013. These controls are likely to lead to increased administrative burdens for businesses and longer delivery times for logistics supply chains.

Economic Operators’ Registration and Identification System (EORI)

Starting on 1 January 2021, EU companies intending to import goods from the United Kingdom will need to provide an EORI registration and identification number for economic operators to complete customs formalities. EORI numbers issued by the United Kingdom will no longer be valid within the EU. UK-based businesses wishing to import goods into the Union will either need an EU EORI number or be required to appoint a customs representative in the EU. In addition, authorized economic operators in the United Kingdom and anyone else whose authorizations were issued by the UK would lose them after 1 January 2021.  If an economic operator wishes to obtain EU authorizations, it must apply for them at a Member State.

(Slovakia) For economic operators not established within the customs territory of the European Union

  • If an economic operator has already been assigned an EORI number in another Member State, the data will be automatically transferred to electronic systems when a customs declaration is lodged. The economic operator will not need to apply for registration and an EORI number. If a VAT identification number has been issued in Slovakia to an economic operator, it will be required to apply for entry into the EOS database in the Member State that assigned the EORI number.
  • If the economic operator has not been assigned an EORI number in the customs territory of the Union, it will apply directly for registration by completing and sending the electronic registration form via Live Agent, accompanied by an extract from the trade register or any other register used in the country where it is established. The economic operator has to submit a scanned original of the extract not older than six months. Should it have been already assigned a VAT identification number in Slovakia, or have been assigned a VAT identification number in another EU Member State, that is the number it will be providing in the registration form as the identifier.

Customs and tax requirements for importing and exporting of goods (duties, VAT and excise tax)

Starting on 1 January 2021, the originating status of goods traded has to be identified in order for them to benefit from preferential treatment under a possible future agreement between the EU and the United Kingdom. Duty will be charged on goods that fail to conform to origin requirements.  

In addition, value added tax (VAT) will be charged for the importation of goods from the United Kingdom into the territory of the European Union at the amount applicable for supplies of the same goods within it.

Excise duty will be likewise charged on alcoholic beverages, tobacco and other products subject to it upon importation into the EU, as is the case with all imports from third countries into the Union, and the duty will be payable when the goods are placed on the market. In future, goods imported from the United Kingdom may also be subject to anti-dumping, countervailing or safeguard measures the European Union applies as part of its trade defense policy.

(SR) Entry summary declarations into the territory of the Community

These declarations ensure security measures are taken when goods enter into the customs territory of the Community. They are required when goods enter the EU. An entry summary declaration is lodged by whoever brings the goods into the customs territory of the Community, takes responsibility for their transport into it or anyone else that may be presenting the goods to the customs authority.  It is lodged electronically to the customs office of entry. A written summary declaration may be lodged whenever either the computer application of the person lodging the summary declaration or the computer system of the customs office of entry is inoperable. Certain types of goods do not require a summary declaration.

(SR) Importation of goods

When goods are transported from a third country, i.e. a country outside the European Union, to a destination located within the customs territory of the Union, the importation of them can be simplified. Import formalities applicable to the goods under customs legislation are required in order for them to be available to final recipients. The purpose of customs clearance is to decide about the release of goods and under what conditions the goods may be released into the customs procedure requested.

Below are the customs procedures for imports:

  • Free circulation

Non-Union goods to be placed on the market or intended for private use or consumption within the customs territory of the Union are released for free circulation. 

The origin of the goods plays an important role in clearing them for such release. This is because the rate of duty, favorable tariff treatment and the preferences that can be obtained and applied when the goods are imported depends on it. Whatever rate of duty is chosen, what favorable tariff treatment is given and the granting of any preferences are all based on proving the country of origin of the goods. In terms of where the goods come from, there is both non-preferential and preferential origin. So-called “rules of origin” determine the origin of goods and how to prove it.

Release of goods into free circulation means the following:

  • Collection of import duties to be paid on the goods declared,
  • Collection of other levies in connection with importation of the goods (in Slovakia, this is value added tax and excise duties, were the goods to be subject to them),
  • Application of commercial policy measures, prohibitions and restrictions along with the completion of other formalities laid down with respect to the importation of goods.


  • Special procedures

These procedures are customs warehousing, free zones, temporary admission, end-use, inward processing and transit. 

The customs warehousing procedure permits non-Union goods to be stored under customs supervision in premises or other places the customs authorities approve for that customs procedure.  A public customs warehouse is a customs warehouses available for anybody while a private customs warehouse is for the storage of goods by the holder of an authorization for customs warehousing.  The length of time the goods may be placed under a customs warehousing procedure is not limited.

Considering the number of custom-procedure related legislative conditions and administrative acts, customs legislation provides the option of simplifying customs procedures in order to streamline the movement of goods in international trade.

Goods are cleared through customs after either a customs declaration or a re-export declaration is lodged.  Customs clearance follows a standard procedure where both the customs office and the declarant have to comply with all the customs formalities required by customs legislation.

A customs declaration is submitted to the customs authority by a declarant, who may either present the goods to the customs authorities or arrange for someone else to present them. The declarant has to be established in the territory of the Union. Exceptions to this rule are when the goods are in the transit or temporary admission procedures, or where the declaration is lodged on an occasional basis, including for the end-use or inward processing procedures, provided the customs authorities consider the exception to be justified. There are also exceptions where the declarant is established in a country whose territory borders on the customs territory of the Union and the goods are declared at a Union customs office bordering the neighboring country should the country where the person is established provide reciprocal advantages to declarants established in the customs territory of the Union. Customs declarations are accepted at once by customs authorities provided the goods to which they relate have been presented to the authorities. Once the lodged customs declaration is verified, the customs authorities will accept it.

Unless deficiencies are identified in the customs declaration that would prevent customs legislation from being correctly applied, the goods should be released under the customs procedure requested by the declarant and upon payment or guarantee of payment of the amount due to the customs authorities and of any other charges incurred for accepting the declaration.

The moment when the customs declaration is accepted is critical in terms of applying whatever measures cover the goods. The amount owed to the customs authorities is due when the customs declaration is accepted.

The customs declaration, either certified by the customs authority or in an electronic message and including what is required by Sec. 36(1) of the Customs Act, is the sole document deciding whether to release goods into a customs procedure.   A statement of assessed duties is attached to the decision to release the goods, which lists the duties and the amount owed. Duties are not permitted to be payable for more than ten days from when the declarant is notified of the amount to be paid. If the declarant is entitled to any of the methods for facilitating payment provided in Articles 110-112 of the Customs Code, then duties are payable no later than the expiry of the period(s) related to those facilities.  Article 109 (2) of the Customs Code allows a third party to make the payment instead of the declarant.

Representation in customs clearance

Anyone can designate a customs representative through a power of attorney. Such representation may either be direct, where the customs representative acts in the name of and on behalf of the declarant, or indirect, in which case the customs representative acts in his or her own name but on the declarant’s behalf.

When the declarant is represented directly, responsibility for guaranteeing the amount due to the customs authority and other payments lies with the representative, who becomes liable for guaranteeing payment of what is owed to the customs authority in duties and other charges.

International agreements with the European Union

On 1 January 2021, the United Kingdom will cease to be subject to agreements either concluded by the Union or Member States acting on behalf of the Union, or jointly by the Union and its Member States.

As a result, the United Kingdom and its nationals and economic operators will no longer be able to benefit from several hundred international Union agreements, such as free trade agreements, mutual recognition agreements, veterinary agreements and bilateral agreements relating to air transport or aviation safety. Nonetheless, businesses established in the Union will still be able to benefit from all the Union's existing international agreements, without prejudice to the United Kingdom’s status in relation to multilateral agreements to which it is a party in its own name.

The United Kingdom remains a member of the World Trade Organization on its own behalf and will be subject to relevant agreements with the World Trade Organization, especially in its concessions and obligations relating to trade in goods, services and to intellectual property rights.

In the long run, relations with the UK regarding customs will be directly dependent on what form a possible free trade agreement negotiated between the UK and the EU will take, or whether the UK will be in a position like any other third country. As part of preparations for a potential “hard Brexit”, the European Commission has prepared a handbook for customs authorities in the Member States, detailing selected customs procedures and possibilities after the transitional period.

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