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26 maart 2019 | Door: Jasper Gorter
Where the application of various tax laws is concerned, the draft Decree states the UK is assumed to be member of the EU throughout the fiscal year 2019. Only when a no-deal Brexit will happen, the Decree will come into effect.
The EU-members recently agreed to postpone the Brexit till 22 May 2019. But, the British House of Commons have to agree to the Brexit deal reached in November 2018 within a short term. When the House of Commons does not, the Brexit will only be postponed until April 12, 2019. The UK then has until April 12 time to:
1. to agree the Brexit deal, or
2. decide to leave without agreement ('no-deal'), or
3. to request for a (longer) delay, or
4. completely refraining from Brexit.
Brexit has many tax-related implications. This is why the Secretary of State for Finance, Mr Snel, already announced transition regulations. The final regulations will be specified as soon as it becomes clear if a transition scheme will be agreed with the Brits.
The draft version of the transition regulations has been publicised. This sets out an approval for considering the United Kingdom as part of the European Union for the current tax year 2019 and all current financial years that started before 12 April 2019.
Please note! For a number of tax regulations, this implies that the tax regime applicable before 12 April will continue to apply.
The purpose of issuing the draft version of the decree is to prevent acute tax implications and increased administrative burden for companies that would ensue from changes in the course of the financial year. For example, this is relevant to companies with British employees on the payroll. Thanks to the approval decree, some of the tax rebate and labour rebate these employees may apply will not be eliminated.
Furthermore, this decree sets out specific approvals for certain other tax regulations, for example to provide a smooth transition for goods that will be in transit from or to the United Kingdom at the time of Brexit.
The Tax and Customs Administration is also working on the potential implications of Brexit. The key consequences are set out on their website (in Dutch).
The VAT-related consequences are still unclear. Any transition regulations must be initiated by the EU. If no transition regulations were to apply, you would have to pay VAT to Customs for importing goods from the United Kingdom, unless you have been granted approval to settle the VAT in the VAT tax return.
If you have any questions regarding the consequences of Brexit, please feel free to contact us.