Filenews 8 January 2021
In its circular, the Customs Department of the Republic of Cyprus clarifies what applies to the importation of motor vehicles from the United Kingdom, the conditions, the exemptions and the taxation.
Under the Agreement on Trade and Cooperation between the EU and the United Kingdom, no import duty shall be imposed on motor vehicles imported from the UK providing the relevant rules of origin laid down in that Agreement are met. A condition for preferential treatment of originating vehicles is the presentation of a certificate of origin drawn up by the exporter and indicated on the invoice or other commercial document describing the vehicle in sufficient detail to enable it to be identified. If the certificate of origin is not presented, vehicles shall be subject to an import duty provided for in the EU Common External Tariff.
Irrespective of the tariff treatment of the vehicle, at the time of its free movement with simultaneous entry for consumption, this shall be subject to a standard rate of VAT, which shall be 19% of the tax value.
Please note that:
The concept of rules of origin is not identical to the concept of Union character.
The EU-UK agreement entered into force on 1/1/2021 and provides for a specific rule of origin for all goods, including motor vehicles, for transactions between EU Member States and the UK as a third country and not between EU Member States.
The Union status of goods released for free circulation in the customs territory of the United States has been lost since 1//1/2021 and may not be a presumption of origin.
Motor vehicles may be considered re-imported only if the conditions laid down in Article 203 of the EU Regulation are fulfilled.
In conclusion, it is stated that the following applies to used motor vehicles expected to be imported into Cyprus from the UK after 1/1/2021:
In relation to the import duties due, preferential treatment may be requested if the relevant rules of origin are met or can be considered as re-imported provided that the conditions of the EU Circular E.P.3 dated 4/5/2016 are fulfilled.
Import VAT shall be payable, unless the provisions of Article 143(1e) of Directive 2006/112/EC on VAT and relevant Regulations 82 and 83 of the CSM 314/2001 are fulfilled. There is no possibility of exemption if there is a sale in a third country in this case the United Kingdom, or even a change of Ownership.
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