Today, the government of the United Kingdom (UK) has formally started the Brexit procedure by notifying the European Council of its intention to leave the European Union (EU). This means that the UK and the EU will now start the Brexit negotiations. Dutch businesses should therefore start preparing for the (possible) consequences and impact of Brexit.
Jan-Willem Thoen – Tax advisor at PwC
What does it mean for your business?
There is a need for companies to begin the process of understanding what changes may be required following Brexit and to show awareness. Business should determine the potential impact of Brexit and plan for any changes to be made. Especially the tax, legal and people consequences of Brexit could have a high impact on your business. In our publication ‘Leaving the EU: Tax, legal and people impact of Brexit on Dutch businesses’ (available in English and Dutch), you will find a more detailed overview of the impact of Brexit. This publication is available here.
Now that the UK has formally triggered the procedure leading to Brexit, the EU will have to come up with their view. In an EU summit on 29 April the other EU countries will determine their position after which the first talks between the UK and the rest of the EU can start. The negotiations for leaving the EU will last, in principle, up to two years under Article 50 of the Treaty on European Union. According to the UK, the negotiations will be a combined negotiation about the terms of Brexit and the new relationship between the UK and rest of the EU. However, the EU negotiators see this differently: they first want to deal with Brexit terms and thereafter discuss the new relationship. Different approval processes apply: the terms for leaving the EU will need to be agreed upon by a qualified majority vote whilst the new relationship (i.e. free trade agreement) needs unanimous consent. A key item in the negotiations is the financial settlement for leaving the EU. This ‘Brexit bill’ could be up to 50-70 billion euros as published in The Economist’s edition of 11 February 2017.
The key priority seems to be to deal with the EU nationals in the UK and UK nationals in the EU as soon as possible. We expect that on this topic relatively quick within the two year negotiation window things will become clearer.
The Brexit process is expected to be completed by March 2019 which will be the moment that the UK membership of the EU terminates. It may nevertheless be possible that the negotiation term will be extended and / or that transitional measures are agreed for certain markets.
Training ‘What is the impact of Brexit on Dutch businesses?’
For everyone interested, we offer a Brexit training on 8 May 2017, where we will share practical insights, market experiences and define clear actions to be taken in five different areas: Direct tax, Indirect Tax (including customs), Legal & Contracts, People/HR-aspects and Financial Reporting. Tax advisors, auditors / accountants and register controllers, can receive PE points for joining this training. You can find more information at our website of the Academy.
Jan-Willem Thoen is tax advisor at PwC. Do you want to know more about the possible consequences of Brexit? Visit our Brexit-page.