(1)

The United Kingdom withdrew from the European Union on 31 January 2020 on the basis of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (‘the Withdrawal Agreement’). The Withdrawal Agreement provides for a transition period that is to end on 31 December 2020. Until that date, the provisions of Union law on value added tax (‘VAT’) are to be applicable to and in the United Kingdom. After that transition period, the provisions of Union law on VAT are to no longer apply to or in the United Kingdom.

(2)

However, in accordance with Article 8 of the Protocol on Ireland/Northern Ireland (‘the Protocol’), which forms an integral part of the Withdrawal Agreement, provisions of Union law on VAT as listed in Annex 3 to the Protocol concerning goods are to continue to apply in Northern Ireland (3) after the transition period so as to avoid a hard border between Ireland and Northern Ireland.

(3)

Therefore, taxable persons and certain non-taxable legal persons will be subject to provisions of Union law on VAT for transactions in goods in Northern Ireland, whereas they will be subject to the provisions of United Kingdom legislation on VAT for all other transactions in the United Kingdom, including in respect of Northern Ireland.

(4)

For the proper functioning of the Union VAT system, it is essential that a distinct VAT identification number is granted to every taxable person who carries out supplies of goods in Northern Ireland and every taxable person, or non-taxable legal person, who makes intra-Community acquisitions of goods as listed in points (a), (b) and (c) of Article 214(1) of Council Directive 2006/112/EC (4), or to a taxable person in view of the use of the optional special schemes for taxable persons making distance sales of goods.

(5)

Therefore, distinct VAT identification numbers with a specific prefix should be introduced in Northern Ireland to distinguish between taxable persons and non-taxable legal persons whose transactions in goods located in Northern Ireland are subject to provisions of Union law on VAT, on the one hand, and persons carrying out other transactions for which they are identified for VAT purposes in the United Kingdom.

(6)

As a rule, prefixes of VAT identification numbers in the Union are based on ISO code 3166 – alpha 2 – by which the Member State of issue may be identified. Northern Ireland has no specific code under that system, but the ISO foresees the possibility to use X-codes for territories that do not have a specific code. Therefore, it is appropriate to propose the code ‘XI’ for Northern Ireland.

(7)

Directive 2006/112/EC should therefore be amended accordingly,

(1)

The International Sugar Agreement, 1992 (‘the Agreement’) was concluded by the Union by means of Council Decision 92/580/EEC (1) and entered into force on 1 January 1993. The Agreement was initially concluded for a period of three years.

(2)

Pursuant to Article 45(2) of the Agreement, the International Sugar Council is able to extend the Agreement for successive periods, not exceeding two years on each occasion. Since its conclusion, the Agreement has regularly been extended for further periods of two years. The Agreement was last extended on 10 July 2019 and remains in force until 31 December 2021.

(3)

Article 41 of the Agreement states that the Agreement is open for accession by the Governments of all States in accordance with the conditions established by the International Sugar Council.

(4)

On 2 October 2020 the United Kingdom formally applied for accession to the Agreement as from 1 January 2021.

(5)

During the 57th session of the International Sugar Council, which is scheduled to take place on 27 November 2020, the International Sugar Council is set to establish the conditions for the accession of the United Kingdom to the Agreement.

(6)

It is appropriate to establish the position to be taken on the Union’s behalf in the International Sugar Council.

(7)

The United Kingdom is a major producer of sugar. Approving the accession of the United Kingdom to the Agreement is in the interest of the Union.

(8)

The United Kingdom’s accession to the Agreement should only take effect after the end of the transition period referred to in Article 126 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (2). The Agreement should not be provisionally applied in respect of the United Kingdom before the end of that period,