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Corporate tax code implications of Brexit

Joe Harpaz  Managing Director, Tax & Accounting Corporate Segment, Thomson Reuters

Joe Harpaz  Managing Director, Tax & Accounting Corporate Segment, Thomson Reuters

A vote to exit the EU in the Brexit referendum will introduce an enormous level of complexity into an already incredibly complex corporate tax code for multinationals operating in the UK.

What does this mean for corporate tax preparation?

Currently, all members of the union share common external tariffs on exported goods when trading with non-member countries, but do not pay any customs duties when trading among one another. It also means that they share a harmonized value-added tax (VAT) system that is charged on a consistent basis throughout the Union.

If the UK were to exit the EU it would need to reconfigure its VAT system to accommodate the newly introduced customs duties and tariffs that would now exist on all goods being imported or exported to other parts of Eurozone.  Britain’s largest trade partners are the other countries in the EU, and any changes to the current system of treaties that govern that relationship from a tax or trade perspective will surely introduce a level of administrative complexity, let alone political wrangling that could drag on for years.

And that’s not all. Read about the possible implications for global trade and investment, taxes and UK government spending in my full analysis on Forbes.

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Thomson Reuters BEPS research and technology solutions empower you with up-to-date knowledge, analysis and documentation tools to respond, comply and advise as new tax laws and standards are passed on a country-by-country basis. Learn more at tax.tr.com/BEPS.


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