The potential impact of Brexit on tax

The British public have spoken and made clear that they see the UK’s interests best-served by leaving the European Union.

The Brexit could have significant implications for direct and indirect tax matters as well as on the economy as a whole.

Overview

In the short term, the vote in favour of leaving the EU will have little, if any, immediate impact on indirect or direct taxes. Few changes are likely to occur while the secession negotiations take place. Following a negotiation about exit terms, the UK’s approach to taxation could diverge from the current position.

The Brexit will provide numerous challenges and opportunities for the different industries and sectors of the Swiss economy that have to be analyzed and dealt with. Swiss companies are well advised to analyze the potential impact of Brexit on their business and in their planning, both short and long term and to adapt their strategies as needed.

Explore the potential direct and indirect tax implications summarized in Deloitte’s Briefing Paper

Our paper analyses the direct and indirect tax implications for the possible alternatives to membership of the EU:

• For indirect tax, the impact on Customs Duty; Excise Duty; VAT and Capital Duty, as well as which indirect taxes would be unaffected.
• For direct tax, relevant EU law; what would change if the UK left the EU; State Aid rules and Harmful Tax Practices.

Download the entire briefing paper (PDF)

Explore the other effects of Brexit on business and the economy

Over the coming months and years, there will be significant changes to the political landscape. In the short term, the government is likely to set up a cross-departmental task force in order to negotiate Britain’s exit from the EU.

To counteract the immediate negative shock to the economy, it is likely that a number of policy measures will be announced. The government could introduce some pro-business measures in an emergency budget, ease fiscal deficit cuts and temporarily suspend its fiscal rules and the Bank of England’s inflation target.

The medium-term impact on the economy is harder to assess and will depend largely on the pace and success of the government’s negotiations with the EU and on future access to the single market.

In the longer term, economic activity will be determined by a combination of the nature of the UK’s post-exit trade relationship with the EU and its ability to exploit its newfound freedom to forge individual trade deals with emerging markets outside the EU.

Find out more about the possible effects of Brexit (PDF)

Jackie Hess - Managing Partner, Tax & Legal

Jackie is the Managing Partner for Tax & Legal and a member of the Swiss Executive team. She has more than 20 years of experience serving some of Deloitte’s largest multinational clients. Her areas of focus include business model optimization in the BEPS era, Swiss ruling and tax holiday negotiations, tax controversy, and audit defense. In addition, she has extensive experience in cross-border tax planning including substance reviews, IP structuring, and finance planning. Jackie’s industry focus is life sciences where she advises predominately US-listed companies in the biotech and medtech space that have their European headquarters in Switzerland.

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Raoul Stocker - Partner, Business Tax Leader Zurich

Raoul Stocker is a tax partner with more than 15 years’ experience specifically in international tax litigation such as mutual agreement procedures and advanced pricing agreements. His focus lies on corporate tax planning, cross-border structuring of corporate transactions and businesses, transfer pricing as well as taxation of financial institutions. Raoul is also a lecturer of transfer pricing and tax law at the University of St. Gallen.

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Benno Suter - Partner, Indirect Tax

Benno is the Lead Partner for our indirect tax practice in Switzerland covering all industries. He has about 20 years’ experience as corporate and indirect tax advisor and many years in-house experience as a tax director of a leading Swiss multinational SMI company. He is a member of the prestigious Swiss VAT competency group of the Swiss Institute for Certified Accountants and Tax Consultants.

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