With the UK surprisingly voting to leave the EU on the 23rd June, a huge level of complexity is expected to be introduced into a corporate tax system that is already extremely complex for those multinationals who operate in the UK.
As it stands, all the unions member share external tariffs when it comes to exported good if trading with countries outside of the EU but they don’t pay customs duties if trading with each other. This also means they share a harmonious VAT, Value Added Tax, system that is consistently charged throughout the EU.
Now that the UK are indeed exiting the EU they will need to completely reconfigure the VAT system in order to accommodate new customs tariffs and duties that will now be payable on all exported and imported goods within Europe.
As the UK’s biggest trading partners are, or were, the other EU countries, any changes within the current system that governs those relationships from a trade or tax perspective will invariably bring with it an unprecedented level of complex administration, add into the mix the inevitable political wrangling and we aren’t expecting to see any kind of solution for years rather than months.
Thanks to our British colleagues, here at Josh and Mak International we will know of any changes immediately so if you are worried about any aspect of the changing face of Britain don’t hesitate to give us a call.