When the UK leaves the European Union on 31st December 2020, UK businesses who are already VAT registered in EU states will be required by many countries to appoint a local fiscal representative (fiscal rep). This is because the UK will no longer be part of the EU Single Market as of 1 January 2020 and new controls will be placed on the movement of goods between Great Britain and the EU.
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What is a fiscal representative?
Where a company is required to be registered for VAT in another country because of its business operations, a fiscal representative may be appointed to act as local entity that represents foreign traders for VAT purposes. EU Member States require non-EU businesses to appoint a representative when registering for VAT in local jurisdictions.
What does a fiscal representative do?
The fiscal representative represents foreign traders in relation to local tax authorities.
The fiscal representative is often jointly and severally responsible for the seller’s VAT liabilities. This effectively means that the rep serves to assist with compliance, helping to ensure VAT returns are submitted on time and any VAT due is paid in full.
The fiscal representative ensures you are tax compliant with local VAT obligations. Depending on the jurisdiction, VAT payments often must go through the fiscal representative directly.
Do I need a fiscal representative?
If you are a UK business selling goods into Europe, your VAT registration will no longer be compliant in many countries come the end of the Brexit transition period. This means marketplaces such as Amazon could impose restrictions on your ability to trade. The process can take several weeks to set up so please contact us for more information. If you would like support or introductions to companies offering the necessary services, we at WorldFirst have trusted partners who can help.
Why is it necessary to have a fiscal representative?
As of 1 January 2021, UK businesses will be considered non-EU business. This means the following EU countries require fiscal reps for non-EU established businesses with local EU VAT registrations. Should any compliance problems relating to a foreign seller come to surface, local tax authorities prefer to have a local contact to deal with directly. This is especially the case if there is a failure to pay tax altogether.
Which EU countries require a fiscal representative?
Source: Avalara (as at 16 Dec 2020)
| EU Country | Fiscal representative required? |
| Austria | Yes |
| Belgium | Yes |
| Bulgaria | Yes |
| Croatia | Yes |
| Cyprus | Yes |
| Czech Republic | – |
| Denmark | Yes |
| Estonia | Yes |
| Finland | – |
| France | – |
| Germany | Yes (Agent Only) |
| Greece | Yes |
| Hungary | Yes |
| Ireland | – |
| Italy | Yes |
| Latvia | – |
| Lithuania | Yes |
| Luxembourg | – |
| Malta | – |
| Netherlands | Yes |
| Poland | Yes (UK taxpayers will require a Fiscal Rep on 1 January 2021 or face not being able to file their VAT returns). |
| Portugal | Yes |
| Romania | Yes |
| Slovakia | – |
| Slovenia | Yes |
| Spain | Yes |
| Sweden | Yes |
| Non–EU | Fiscal representative required? |
| Iceland | Yes |
| Norway | Yes |
| Switzerland | Yes |
| United Kingdom | At tax office request |
It should be noted that The Netherlands will require fiscal representation for special schemes such as import VAT deferment. As it stands, France are currently the only country in Europe to confirm that UK businesses will not require a fiscal representative even if there is no post-Brexit free trade agreement.
Next steps
If your business is trading cross-border it’s likely that you have had requests for settlement via direct debit (SEPA B2B) as well as tax compliance needs. If you have not arranged a fiscal representative, please contact us at etailers@worldfirst.com. Our dedicated account managers will be able to support you with contacting our VAT partners to get an appointment in place.
Blog written with support from our Fiscal representation partner Desucla.
About Desucla
Desucla offer fiscal representation and VAT payment services in over 35 countries. Offering fast and cost-effective global representation, Desucla work with individual merchants and multi-national group companies all over the world. With an integrated VAT payment portal to save clients time and money when making VAT payments, they deliver expert tax and payment knowledge. As UK businesses prepare for Brexit, Desucla are here to help you with handling your fiscal representation in all the main EU jurisdictions.
References:
https://www.avalara.com/vatlive/en/vat-services/fiscal-representative-for-eu-vat.html
We have a number of partners who may be able to offer suitable and regulated financial advice. Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest information with the sources outlined above and consider your needs prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs.