We’re now several weeks out from the end of the “transition period” for the withdrawal of the U.K. from the European Union (EU), a process collectively known as “Brexit.” The economic impacts of Brexit will be largely determined by the EU-UK Trade and Cooperation Agreement and will likely be felt for years to come.
While this is all happening an ocean away, it will still have a significant impact on retailers in the U.S. that make sales to customers in the U.K. Keep reading to find out how!
A Quick History Of Brexit
The U.K. originally joined the predecessor of the EU, the European Economic Community, in 1973. Skepticism regarding the membership has been around almost right from the start, however. The first national referendum on whether the U.K. should remain a member actually took place in 1975.
The Minister for Finance, Public Expenditure and Reform Paschal Donohoe T.D delivered his first Budget on 10th October 2017 which concentrated more on expenditure than on tax changes. The Minister announced a number of positive measures to assist small and medium sized enterprises prepare for “Brexit” as well as confirming Ireland’s commitment to the 12½% corporation tax rate. We are pleased to bring you our summary of the tax measures set out in Budget 2018.
In a referendum in June 2016, the UK voted to leave the European Union (EU). The result was a surprise to many, as experts had been lining up to say that the UK would be worse off economically if it left. Just over a year on, it’s still a divisive issue in the UK. However the government formally triggered the start of the two year leaving process in March 2017, so it’s definitely going to happen. While heated debate on the pros and cons of staying and leaving still rages among the Brits, many U.S. expats are wondering what the implications for them are. Read More
One of the major economic fallouts of last year’s Brexit referendum was the sudden and significant depreciation of the British pound. Over the past week, the pound fell sharply again following the unexpected results of the most recent U.K. election.
What does this mean from a tax perspective for U.S. expats living in the U.K.?
Many of the big banks, investment funds, and large insurance companies have announced that hundreds to thousands of employees are being relocated to group members European Union countries. The UK financial industry is on track to lose within two years much more than the previously forecast 75,000 direct high paying financial services jobs and with those will go the back office support and compliance jobs attached.
Today, the Minister for Finance Michael Noonan T.D. delivered Budget 2017.
Until the Brexit negotiations begin, it is impossible to know the impact for Ireland. However today’s budget gave Minister Noonan the opportunity to affirm the stability of Ireland’s tax policies while at the same time introducing measures to promote economic growth.
As I hear it, if the Netherlands were to substantively amend its ‘maximum 20% bonus of salary’ regulation, then the relocation decision for many EU facing funds would be an easy choice. But because of that regulation, it has created an opportunity for other cities to pitch to the institutions for the funds and trading business relocation.
The issue of transfer pricing has never been a bigger issue than now. With news of the IRS auditing U.S. corporations who operate outside of the country, the Organization for Economic Cooperation and Development (OECD) latest action plans under the Base Erosion Profit Sharing (BEPS) project, and the U.K. voting to leave the European Union (Brexit), the effects with be seen by U.S. multinationals. You have the opportunity to learn from top tax experts who will discuss and analyze the transfer pricing market.