Suppling IT services to an EU based country from 1/1/21

[Eirikur]

I think that the relevant question would be how do you invoice in relation to VAT?
Any opinions on that?

There will be limited changes on the Brexit VAT on services for B2B transactions after the UK leaves the EU VAT regime

UK to leave EU VAT regime 31 Dec 2020 - Brexit

[NotAllThere]

For the last 8 years I've run a PSC Ltd company, supplying IT services to an Italian company. I'm UK based, and work remotely from the UK, but travel to their head office for approx 10 weeks a year.

Any idea where I go to find out how Brexit affects me? I've been trying for months (if not years) to find out what's going to change for me, but can't find any clarity. Seems it's still all up in the air with only a few days to go?

Not expecting any answers here, but would be really grateful if anyone knows if the answers even exist yet, or where I might find them. Every article I've found talks about a situation different to the one I have.

First issue - can you work in Italy. Probably not for 10 weeks. But probably for business meetings. Maybe you'll be allowed to do substantive work.
Second issue - do you charge VAT or not? Don't know.

I've been billing an EU country from Switzerland for years. I certainly couldn't have done substantive work in the UK for ten weeks without paying tax there. I don't charge VAT.

I suggest you keep billing, and work things out as they become known.

[jamesbrown]

Maybe you'll be allowed to do substantive work.

Right, would be good to get this one answered definitively. If it's anything like the US, then substantive work is not allowed (even with a business visa - only meetings, conferences, attending training, limited installation of equipment etc.), but I suspect it isn't like that. The UK guidance on the deal hints that substantive work is probably allowed (references to contractual service suppliers, independent professionals), but it's a bit vague. I think the goal is to replace these arrangements with a visa waiver scheme in the not too distant future, similar to ESTA.

Chapter 4 – Temporary entry and stay of natural persons for business purposes
43. The Agreement sets out the commitments taken by the UK and EU on business mobility. These provisions will give the UK’s firms and individuals the legal certainty and administrative clarity they need to continue engaging in business activity and delivering services in the EU when the transition period ends.

44. The Agreement includes well established commitments on short-term business visitors; business visitors for establishment purposes; intra-corporate transferees; contractual service suppliers; and independent professionals. The Parties have agreed not to impose market access restrictions (such as economic needs tests) or discriminatory barriers on business persons falling into these categories.

45. The Parties have also agreed commitments on length of stay that broadly reflect the outcome reached in the EU-Japan Economic Partnership Agreement. This includes the ability for UK short-term business visitors to travel to the EU for 90 days in any 180-day month period. The Parties have also agreed not to impose work permits on business visitors for establishment purposes.

46. Exceptions to the Parties’ commitments on business mobility are set out in the Agreement’s Annexes.

47. The Agreement also includes comprehensive measures on transparency and procedural facilitations, easing the burden on future visa and work permit applicants. It guarantees that intra-corporate transferees can be accompanied by their partners and dependents when placed abroad, with minimal administrative burdens.

48. All of this supports the government’s new immigration policy, ensuring that the brightest and best global talent can come to the UK for business purposes.

Summary Explainer - GOV.UK

[thomashenry]

Thanks for the responses. Regarding my work trips to Italy - there are not going to be any for some time, thanks to COVID. In fact, the last time I visited my client was in Feb 2020. The trips are primarily at my discretion, as I feel it helpful to maintain good face to face relations with clients/colleagues. It's concievable that I don't go at all during this contract. This aspect does not worry me too much... there might be some red tape but I doubt it will be inconcievable.

My main concern was about the possible requirement to establish a presence in Italy in order to provide services, but I don't believe my line of work falls under such a regime. I don't rely on any professional qualificaions for my work, and my work is not regulated in any way.... though I've not been able to confirm this for sure.

With regards billing and invoicing, remuneration is in UKP, and I don't charge VAT, under the reverse charge scheme. From what I've been able to tell, this will continue.

I'm unsure about import/export duty. But given that I've already signed a contract for a fixed amount to be paid to me, and import duty my client pays should not affect me....

So it seem (fingers crossed) that I can carry on more or less as normal (for now)?

Thanks

[m0n1k3r]

He's not providing actuarial services. He's simply working offshore and will be up to the client. EU countries have loads of offshore resources supplying from outside the EU. Our company had suppliers all over the world, accessing the same hardware and data. The trade deal is irrelevant in this respect. The only thing he needs to consider is if he works in Italy other than business visits he needs a visa.

Wrong. He'll need a business visa for business visits. For actual work a work permit is required, which requires a bona fide employer in the country (and first advertising the job EU-wide for two weeks, as EU citizens take preference). Only then can the employer issue a job offer which he can bring to the Italian embassy in the UK to apply for a work permit.

[darmstadt]

So it seem (fingers crossed) that I can carry on more or less as normal (for now)?

Thanks

Just remember you'll have to go into a different queue at passport control when arriving in Italy

[darmstadt]

The TCA allows for British short-term business visitors to enter the EU visa-free for 90 days in any given six-month period, but there are restrictions on the activities they can perform. Crudely speaking,the list of permitted activities shows that while meetings, trade exhibitions and conferences, consultations and research are fine, anything that involves selling goods or services directly to the public requires an actual work visa.



But some countries have differences:

[jamesbrown]

Thanks, darmie. So, indeed, it appears that “substantive” work is not permitted, absent a work visa/permit.

[BlasterBates]

Wrong. He'll need a business visa for business visits. For actual work a work permit is required, which requires a bona fide employer in the country (and first advertising the job EU-wide for two weeks, as EU citizens take preference). Only then can the employer issue a job offer which he can bring to the Italian embassy in the UK to apply for a work permit.

In most countries 90 day visas/visa waivers allow business trips for meetings. It would also appear in Italy.

Italy – Rights of U.K. Citizens Post-Transition Period - KPMG Global

From 1 January 2021, it should be possible to travel to Italy for up to 90 days in any 180-day period without a visa for purposes such as tourism or business, according to the normal Schengen rules.

Agreed it doesn't allow actually working, only attending meetings, trade fairs etc., but that may be sufficient for the OP.

[Lance]

note 8h)

after-sales service: installers, repair and maintenance personnel.......... essential to a seller's contractual obligation, supplying services...........pursuant to a service contract..... including computer software...


I paraphrase that a bit for brevity, but it reads to a layman like me, that you can do work on computer software, or computers, that have been sold to the EU party.
Up to 90 days, without a visa.

that to me covers most of what we do as contractors.... (bum on seat permietractors clearly not included in that as they work for the client). It would mean that you have to sell a product rather than the service though.


I mean it's still tulip compared to what we had before.


On a different note. All my work abroad, outside the EU, has always been for 'meetings'. The work was always done 'remotely'. Honest guv. That has been fine for USA (under an ESTA), Japan (coughed up loads of yen at customs for the switch and firewall in the suitcase), China (with a non-work VISA), Norway (customs seized the server in the suitcase), South Korea, and Hong Kong.