Taxation (Cross-border Trade) Act 2018

42 EU law relating to VAT

(1) Any EU regulation so far as applying in relation to value added tax, and any direct EU legislation so far as relevant to any such regulation, that form part of the law of the United Kingdom as a result of section 3 of the European Union (Withdrawal) Act 2018 cease to have effect (but, in the case of the implementing VAT regulation, see also subsection (5)).

(2) In the application of section 4(1) of that Act (saving for EU rights, powers, liabilities, obligations, restrictions, remedies and procedures) in relation to value added tax, the rights, powers, liabilities, obligations, restrictions, remedies and procedures mentioned there are subject to any exclusions or other modifications made by regulations made by the Treasury by statutory instrument.

(3) Further provision relevant to the law relating to value added tax is made by the European Union (Withdrawal) Act 2018: see, for example, section 6 of that Act (interpretation of retained EU law).

(4) One of the consequences of the provision made by that Act is that the principle of EU law preventing the abuse of the VAT system (see, for example, the cases of Halifax and Kittel) continues to be relevant, in accordance with that Act, for the purposes of the law relating to value added tax.

(5) Where the principal VAT directive remains relevant for determining the meaning and effect of the law relating to value added tax, that directive is to be read for that purpose in the light of the provision made by the implementing VAT regulation but ignoring such of its provisions as are excluded by regulations made by the Treasury by statutory instrument.

(6) No regulations may be made under this section on or after 1 April 2023.

(7) A statutory instrument containing regulations under this section must be laid before the House of Commons, and, unless approved by that House before the end of the period of 28 days beginning with the date on which the instrument is made, ceases to have effect at the end of that period.

(8) The fact that a statutory instrument ceases to have effect as mentioned in subsection (7) does not affect—

(a) anything previously done under the instrument, or

(b) the making of a new statutory instrument.

(9) In calculating the period for the purposes of subsection (7), no account is to be taken of any time—

(a) during which Parliament is dissolved or prorogued, or

(b) during which the House of Commons is adjourned for more than 4 days.

(10) Regulations under this section—

(a) may make different provision for different purposes or areas,

(b) may contain supplementary, incidental and consequential provision, and

(c) may contain transitional or transitory provision and savings.

(11) In this section—

• “the implementing VAT regulation” means Council Implementing Regulation (EU) No 282/2011, and

• “the principal VAT directive” means Council Directive 2006/112/EC on the common system of value added tax.