Britain's exit from the EU means that the benefits of the EU
Arbitration Convention will no longer be available to tax treaty
disputes between the UK the EU. The EU Arbitration Convention is
considered a fix for a number of flaws that are inherent to
"classic" OECD settlement mechanisms. Brexit means that
tax treaty dispute resolution will suffer, in particular between
the UK and Luxembourg, unless BEPS and the Multilateral Instrument
are able to step in and help.
Brexit and the new business relationship
The actual "Brexit" is not foreseen to happen before
2019, as the UK and the remaining EU Member States have a two-year
period to negotiate a framework for a new relationship. It is well
worth considering Brexit's impacts on cross-border disputes in
order to prepare for changes because, in the long run, the UK will
become a third state and therefore no longer profit from the
harmonising common rules of EU law. In this new context,
Luxembourg's aim is to bridge the
