The United Kingdom (UK) left the European Union (EU) on 31st of January 2020. A transition period has entered into force. However, it is unclear the relation that the UK will have with the EU. Some argue that a free-trade relation will be in place; others, that a Australian-style agreement will apply. This uncertainty looms in the air regarding taxes and other legal matters. Therefore, it is reasonable to ask: what can we expect and what should my business be doing to be prepared in this transition period.
Below you will find a checklist that will help prepare your business during this transition period.
National rules on direct taxation of companies must take account of EU law, including harmonization measures in certain cross-border situations. Consequently, Post-Brexit, the rules for direct taxation of companies in situations involving the UK will be those applicable to third countries.
The rules for payment and refund of value-added tax (VAT) differ greatly depending on whether the supply/acquisition of goods or services takes place within the EU or cross-border with a third country. Therefore, it is reasonable to conclude that Post-Brexit, the EU-rules for cross-border supply from a third country apply.
A unitary trademark and design, as well as an EU system of geographical indications and EU-rules on plant variety rights ensure the protection of these intellectual property rights throughout the EU. Consequently, Post-Brexit, the protection granted by these rights no longer applies to the UK territory.
The recognition and enforcement by one Member State of judgments in civil and commercial matters handed down in another Member State is greatly facilitated by EU law. Thus, Post-Brexit, the recognition, and enforcement of UK judgements will be governed by the (national) rules for third-country judgments.
EU law provides for the transmission of personal data across EU Member States without additional requirements. Therefore, Post-Brexit, the transmission of personal data from the EU to the UK is subject to the rules for data transfers to third countries. This is relevant for many business sectors, particularly if EU businesses continue to work with data-centers located in the UK.
EU law provides for the recognition, in a Member State, of a company incorporated in another Member State. Consequently, Post-Brexit, the recognition of UK-incorporated companies in the EU will depend on (national) law for third country-incorporated companies.
These questions are necessary to prepare your business from a tax standpoint. If you have any questions on any of these issues and how they would relate to EU rules, please contact us at firstname.lastname@example.org .