What Should We Prepare for After Brexit?

9. August 2019 | Reading Time: 2 Min

At the request of the United Kingdom of Great Britain and Northern Ireland (hereinafter ‘the UK’), the European Commission has decided to postpone Brexit until 31 October 2019 at the latest. This means that if an agreement between the EU and the UK is ratified before this date, the UK will be able to leave the EU sooner. Companies that trade with the UK can expect a number of significant changes regarding customs, as well as direct and indirect taxes following the country’s withdrawal from the EU.

After Brexit: A Hard Brexit with NO deal

In the event of a hard (no deal) Brexit, the UK shall be considered a third country, and therefore it will be necessary to prepare for the following most significant consequences:

  • changes in the VAT and customs systems for goods travelling from the UK into the EU and, on the other hand, the obligation to pay import VAT and customs duties;
  • an impact on goods subject to excise taxes;
  • changes in rules when applying for refunds of VAT paid in Slovakia to persons from the UK and vice versa, and when Slovak businesses apply for a refund of VAT paid in the UK;
  • UK taxpayers will be taxed in accordance with the Income Tax Act as ‘third-country’ taxpayers (of course, the relevant double taxation treaty will also need to be taken into consideration);
  • Brexit will not affect the double taxation convention entered into between the UK and Slovakia.

Slovakia & Brexit

In relation to Brexit, Slovakia has already prepared legislative changes in various fields, e.g. to the Health Insurance Act, the Employment Services Act, and the Act on the Residence of Foreign Nationals.

If you have questions about the Brext and what you need to do, please contact TPA tax expert Peter Ďanovský in Slovakia.

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