A leaked EU document seen by The Guardian suggests that Brexit could give rise to sweeping changes to the European tax system. Businesses, which are already having to adapt to the tax implications of the OECD BEPS project, Brexit, and the uncertainties of Trumponomics could also have to contend with a radical reform of the EU tax system. With the vote enabling the Prime Minister to exercise article 50 passing through the Commons on 1 February, the prospect of these changes draws nearer.
The Guardian indicates that the European Commission feel that Common Consolidated Corporate Tax Base (CCCTB) proposals are more likely to succeed with the UK outside the EU rather than inside. The proposals, which have been around for some time, would essentially ensure that corporate tax rules are harmonised across the EU, with national governments only able to control the rate of tax charged on the profits allocated to their territory.
UK businesses with a presence in Europe could have to factor these additional uncertainties into their planning for post Brexit activities.
Crowe Horwath International experts from around the world commented on these proposals late last year. At the time, there was some scepticism that the changes would be implemented, but the European Commission clearly feel the political sands could be shifting in their favour.