In a note dated 8 July 2021 from the Directorate of Taxation and Customs (DG TAXUD), the European Commission responds to some of the questions raised by the end of the “Brexit” transition period on 31 December 2020. This note provides examples that can assist with a practical perspective on specific situations considering the impact of Brexit on the location of the means of transport at the end of thetransition period.
The DG TAXUD reviews the rules applicable to the importation of means of transport into the customs territory of the European Union.
1. No impact of the EU/non-EU registration to determine the customs status
The Commission points out that the registration of means of transport (EU or non-EU) does not have any impact on the determination of their customs status (Union or non-Union goods).
- Hence, yachts that were built or imported in the UK, and released for free circulation in the EU (including the UK) before 1 January 2021, regardless of whether they were registered with an EU flag, have lost the status of Union goods (and therefore potentially their VAT-paid status) if they have not left the UK and entered the EU before that date.
- However, these yachts have acquired the status of Union goods and, therefore, if they have moved to another EU Member State before the end of the Brexit transitional period, they have remained Union goods. If they leave the EU, they can benefit from the returned goods regime under certain conditions. Where the yachts would have
stayed in the UK after 1 January 2021, they could still potentially benefit from the temporary admission regime in the EU.
2. No import formalities required to benefit from the returned goods regime
The Commission also adresses the import formalities applicable to means of transports under the returned goods regime : EU means of transport that have temporarily left the customs territory of the EU may be declared as returned goods simply by crossing the border. In other words, UK yachts that were on the EU customs territory after 1 January 2021, and have left the EU, may, if they meet the requirements of the regime, return into the EU under a suspension of duties and taxes simply by crossing the border, without any (oral or written) import formalities.
Finally, the DG TAXUD reminds that, where relevant, the above UK Yachts may be reimported exemption of VAT under the returned goods regime, or in suspension of VAT under the temporary admission regime.
This note was long awaited and, although it offers interesting elements, it does not solve all the issues raised by the location of means of transport after Brexit.
Whereas goods that have temporarily left the customs territory of the EU may be declared as returned goods simply by crossing the border, the Commission remains silent as to export formalities. Should operators rather lodge an export declaration or simply take the crossing of the border as an export formality?
Our yachting team is at your disposal to help you apprehend these issues and facilitate the return into the EU customs territory of vessels or aircrafts that may have lost their status as Union goods, or to anticipate any control from the customs authorities.