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ARTICLE · 24 JUNE 2016

Brexit: Corporate Tax Issues

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On Brexit the UK will stand outside the existing EU customs union with all the other EU Member States.

United KingdomTax
Andrew Terry
Andrew Terry
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Customs Duties

On Brexit the UK will stand outside the existing EU customs union with all the other EU Member States.  Unless an alternative arrangement is negotiated exports of goods to EU countries will become liable to EU customs duties and import VAT in the destination state.  Imports of goods from the EU to the UK would likewise become liable to VAT and duties. Also the UK would have no access to any preferential terms of export existing between the EU and third countries outside the EU. 

VAT

Whilst the UK as a non-EU Member State would have no obligation to maintain a VAT system, its abolition is impossible to envisage as it is responsible for 18% of all UK tax revenue.  However, future decisions on VAT by the European Court would cease to be binding on the UK interpretation of VAT.  There would be more flexibility in applying zero-rates and exemptions.  The minimum rate of 15% under EU law is currently fixed at 15% which restriction would no longer apply

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