13 Feb Does the Brexit have consequences for you?
Does the Brexit have consequences for you?
13 February, 2020
The Brexit is a fact: the United Kingdom has left the European Union per the 1st of February 2020. The European Union and the United Kingdom concluded a withdrawal agreement, in which is agreed on a transition period. This transition period means that the EU-regulations mostly continue to apply until the 31st of December 2020. It is recommended to use this transition period to assess which consequences the Brexit has for your business.
Until the 31st of December 2020 there can be acted as if the United Kingdom is a member state of the European Union. Residents of the United Kingdom (hereafter: UK) will be considered as inhabitant of the European Union until that date.
During this transition period, the withdrawal agreement does not have consequences for:
- Personal income tax for qualifying foreign tax payers resided in the UK;
- Tax credits for residents of the UK;
- When emigrating to the UK in 2020 there is no provision of security required in case of a protective assessment (‘conserverende aanslag’);
- Making payment arrangements for exit taxes in the personal income tax and corporate income tax will stay possible for residents of the UK;
- The application of the participation exemption in corporate income tax for subsidiaries in the UK;
- Fiscal unities for corporate income tax purposes with a UK top holding or UK intermediate holding.
The transition period in the withdrawal agreement could possibly be extended. At the moment it is unclear whether there will be made use of this possibility.
During the transition period, it is of importance to assess which consequences the Brexit could have for your business.
In case your business imports goods from the UK frequently, it could be recommended to apply for a so-called art. 23 permit for VAT purposes. This art. 23 permit allows you to pay the VAT for the import via the regular VAT return. Also the import VAT can be deducted in the same VAT return as in which the import VAT is declared. This prevents that you will have to pay the import VAT directly at Customs, while the deduction is effected later.
Does your business supply goods to the UK? Then the supply will be qualified as export (instead of intra-Community supply) after the transition period. After the transition period you will have to fulfill the Customs formalities, such as an export declaration for each supply of goods.
Consequences for businesses in the Netherlands
According to Reuters the Brexit brings a record number of businesses to Netherlands. Twice as many companies set up operations in the Netherlands in 2019 compared to a year earlier.
Whether you must take action depends on your situation. Do you have questions regarding the consequences of Brexit for you or your business? Please contact your advisor at Joanknecht or one of our experts. Possibly you could use the so-called Brexit-voucher, which compensates 50% of your advisory costs (with a maximum of € 2.500 excl. VAT).