‘God Save the Brexit’: Tax Implications of Leave Vote

European Taxation, Vol 56, n.º 11, 2016

Posted: 14 Aug 2020

See all articles by Laura Ambagtsheer-Pakarinen

Laura Ambagtsheer-Pakarinen

affiliation not provided to SSRN

Ricardo García Antón

affiliation not provided to SSRN

Laura Mattes

affiliation not provided to SSRN

João Félix Pinto Nogueira

International Bureau of Fiscal Documentation; University of Cape Town (UCT)

Oana Popa

West University of Timisoara

Ruxandra Vlasceanu

affiliation not provided to SSRN

Date Written: October 20, 2016

Abstract

This study was drafted shortly after the announcement of the referendum by which the United Kingdom decided to leave the European Union. In this article, the authors make a comprehensive assessment of what would be the tax consequences attached the decision. The article is of interest not only for this specific case but also for any other EU Member States deciding to leave the Union. The article starts to note that although the results of the exit referendum have been confirmed, the tax implications arising from the United Kingdom leaving the European Union will not be known until the United Kingdom invokes article 50 of the Treaty on European Union (TEU). Thus, no immediate changes have been triggered regarding the terms governing transactions carried out between the United Kingdom and other EU Member States; the United Kingdom will continue to be engaged in decision-making at the EU level as it did before. Even once article 50 is invoked, the United Kingdom will still be bound by all EU law up to the moment that the terms of the exit have been established. It will not, however, be involved in decision-making during that time. Article 50 provides for a period of at most two years between the moment it is invoked and the Member State's actual exit from the European Union. Hence, while legislative changes may not be made immediately, the effects that an exit will have on the UK tax system are expected to be significant. The most significant impact of the Brexit is likely to be on indirect taxes, as these are already harmonized at the EU level. In addition, the applicable rules in many areas of direct taxation that stem from EU primary or secondary law are also expected to change significantly, as the United Kingdom will become a non-Member State with regard to the application of the fundamental freedoms and the European directives. Significant developments will also occur in other areas, such as administrative regulations and social security. These are analysed in detail herein.

Keywords: Taxation, Tax Law, European Taxation

JEL Classification: K33, K34, F13, E62, D78, E62, F02, F23, F42, H20, H22, H23, H25, H26, H87, O19, O23, O24

Suggested Citation

Ambagtsheer-Pakarinen, Laura and García Antón, Ricardo and Mattes, Laura and Pinto Nogueira, João Félix and Popa, Oana and Vlasceanu, Ruxandra, ‘God Save the Brexit’: Tax Implications of Leave Vote (October 20, 2016). European Taxation, Vol 56, n.º 11, 2016, Available at SSRN: https://ssrn.com/abstract=3644430

Laura Ambagtsheer-Pakarinen

affiliation not provided to SSRN

Ricardo García Antón

affiliation not provided to SSRN

Laura Mattes

affiliation not provided to SSRN

João Félix Pinto Nogueira (Contact Author)

International Bureau of Fiscal Documentation ( email )

Rietlandpark, 301
Amsterdam, 1019 DW
Netherlands
+31205540100 (Phone)

HOME PAGE: http://https://www.ibfd.org/IBFD-Profiles/Jo-o-F-lix-Pinto-Nogueira

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

Oana Popa

West University of Timisoara ( email )

Bd. Vasile Parvan nr.4
Timisoara 300223, Timis 330023
Romania

Ruxandra Vlasceanu

affiliation not provided to SSRN

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