Indirect Tax implications of a Brexit vote and the EU law
July 01, 2016
The wider emotional, political and economic outcomes of the referendum vote to leave the EU are still being worked through, but what as indirect tax practitioners, can we do to prepare ourselves and our businesses for this?
The slightly frustrating answer is that the hard consequences for indirect taxes are no more known in the immediate aftermath of the result than they were when the referendum date was set. What we do now know, however, is that we are going to have to deal with the greatest change to the legal framework within which UK indirect taxes sit that most of us will have ever seen.
So, what might change? When might it change? And how can we deal with it?
Firstly, it’s worth noting that none of this change should occur until the effective date of an exit. This may be more than two years away so there is time for business to prepare - We expect to hear more from the government in the coming days around timing.
From the date of the actual exit, in simplest terms, EU law will cease to apply – this primarily means removal of i) the VAT Directive; ii) VAT regulations; iii) EU Union Customs Code, iv) EU Customs Regulations, v) General principles of EU law; iv) in some cases CJEU case law. We will explore some of the questions and other implications that arise further in a series of blogs in the coming days. Keep up to date with all global indirect tax developments at GlobalVATOnline.
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Johnathan C Davies
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