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| 1 minute read

Brexit: Let's pretend...

The Financial Times has reported the issue of a technical note by the UK Government in which it is suggested that EU/third country agreements which currently apply to the UK in its capacity as an EU Member State should continue to apply to the UK during any transition period (even though the UK is not an EU member state at the time).  It's all presented as an issue of treaty interpretation and the inclusion of these arrangements within the EU acquis - but will of course depend crucially on the attitudes of non-EU states who have entered into such agreements with the EU.

There are apparently hundreds of these agreements covering a huge range of issues.  But if we leave aside the crucial area of customs duties, from the corporate tax perspective there may not be many  - the EU agreement with Switzerland which incorporates a form of the EU parent subsidiary directive is perhaps one.  And of course, it does not address at all the effect of the UK's ceasing to be an EU member state on the application of bilateral treaties (such as double treaties) between EU27 states and third party states , for example, where the change in the UK's status could affect benefits under treaties between EU27 states and the US as a result of the operation of limitation of benefits clauses.

Britain has a message for the rest of the world after Brexit next year: please pretend we are still in the EU. A “technical note” prepared by the British government calls on non-EU nations to treat the UK during its post-Brexit transition period after March 2019 as if it was still covered by more than 700 treaties Brussels has struck with third countries on everything from fishing rights to data sharing.


tax, brexit

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