Brexit  Crowe

TAXING TIMES WITH BREXIT WITH NUMEROUS POTENTIAL TAX CHALLENGES ARISING FROM BREXIT, NOW IS THE TIME FOR BOTH BUSINESS LEADERS AND POLICYMAKERS TO PREPARE, WRITES LISA KINSELLA, TAX PARTNER, CROWE. The impending departure of the United Kingdom from the European Union is likely to be the source of much turbulence for Irish business, presenting both practical day-to-day challenges as well as potentially giving rise to significant changes to the wider business environment in the long run. Uncertainty is the bugbear of business and Brexit threatens to bring this in abundance. It is already raising its ugly head as two years after the referendum we are still not much the wiser as to what form Brexit will take. Notwithstanding the difficulties in doing so, businesses should be making plans and taking steps to prepare for the new reality.

Practical Challenges

Some of the key issues that Irish business should be considering in the build-up to Brexit include: • Customs • VAT • Withholding Taxes • Impact on Key Tax Reliefs Customs  Failure on the part of the EU and UK to strike a tariff-free trade agreement will have a significant impact. The imposition of tariffs will impact on the cost of production for manufacturers that import materials and on the competitiveness of Irish exporters that sell into the UK market. These will have to be factored into business plans.  The imposition of customs checks will also create further red tape for business as well as leading to potential delays in moving goods between the two jurisdictions, in

Lisa Kinsella, Tax Partner, Crowe

particular if Brexit results in a hard border between the Republic and Northern Ireland. VAT  The

VAT implications of Brexit depend largely on the extent to which the UK remains wedded to the EU VAT regime. For instance, should the UK choose to operate an independent system of VAT, goods imported into Ireland from the UK would be treated as imports liable to VAT at the point

of entry, thereby adding to cashflow costs for Irish business even if such VAT is ultimately recoverable. The same would be true of UK business customers acquiring goods from Ireland. Withholding Taxes will likely mean that the benefits of EU directives in the areas of dividends, interest and royalty payments will no longer apply to transactions involving

 Brexit

50 SFA | BETTER BUSINESS

Crowe Ireland_DPS_CP_JM_Better Business Q3_V2.indd 50

19/10/2018 11:02