9 major tax changes in case of no-deal Brexit
The planned date of Great Britain’s withdrawal from the EU set for 29 March 2019 has been postponed. However, a British proposal for postponement until 30 June 2019 has not been approved by the EU27. Below we summarise the major potential impacts of a hard Brexit.
In terms of the number of votes cast in the British parliament, March really was abundant. In the first half of March, Prime Minister Theresa May first let the second vote be held on a Brexit withdrawal agreement. Then, the parliament decided on whether Great Britain should exit the EU without a deal. And, the third time around, the parliament resolved to delay Brexit, which resulted in Great Britain having to ask the EU to postpone Brexit until 30 June 2019. But the EU member states did not confirm this date.
The European Council agreed to an extension until 22 May 2019, provided the withdrawal agreement is approved by the House of Commons no later than 29 March 2019. As the agreement was rejected for the third time, Brexit was only postponed until 12 April 2019. Before this date, Great Britain must also announce its plans on whether it intends to participate in the May 2019 European elections.
British MPs are currently looking for an alternative plan, but voting has so far not brought any progress, as parliament failed to approve the continuance of a permanent customs union with the EU by only three votes. If a consensus is not reached, a hard Brexit may occur on 12 April. The European Commission has therefore completed its preparations for a no-deal Brexit and has adopted a number of temporary emergency measures. However, these are only unilateral.
In the case of a no-deal Brexit, the UK will become a third country to the EU without any temporary arrangements. The major implications would be as follows:
- Exports and imports will take the place of intra-community supplies and acquisitions.
- The duty to submit Intrastat declarations and EC Sales Lists regarding transactions with Great Britain extinguishes.
- EORI, customs permits and licences issued in Great Britain will cease to be valid.
- EU goods of British provenance might be regarded as non-originating.
- Limits for dispatching goods will cease to apply, resulting in the necessity to register as a VAT payer in the country in which goods are received.
- Consignments of negligible value will no longer be exempt.
- It will not be possible to apply for a refund of VAT paid in the UK via an e-portal.
- Registration through the Mini-One-Stop-Shop will not be valid in the UK.
- The EU rules for triangular transactions will not apply if a UK tax resident takes part in the transaction.
The EU rules for triangular transactions will not apply if a UK tax resident takes part in the transaction.