Brexit – Its Implications for Global Trade and Taxation

Brexit pic

Brexit
Image: uschamber.com

For over 40 years, Advisory Group Associates’ Tax & Advisory firms CEO and manager Frank L. Zerjav, CPA, has served as a source of guidance for business and real estate owners, professionals, investors and individuals seeking tax planning expertise. Operating out of the firm’s headquarters in St. Louis County, Missouri, Frank Zerjav Sr. CPA helps clients’ formulate strategic tax planning strategies for a vast array of life stages and events, all while keeping clients up to date on regulatory changes that may impact their tax, business or financial goals.

In June 2016, voters in the United Kingdom passed “Brexit,” a referendum that would initiate the UK’s separation from the European Union (EU). The measure was extremely divisive both in the UK and throughout the international community, and while England and Wales voted strongly in favor of exiting the EU, both Scotland and Northern Ireland voted to stay. While there is a two-year buffer period before this significant change begins to take effect, it could have several implications on the global tax and trade climate.

Brexit demonstrated a political rift in the UK on the matter of EU membership, and many experts are speculating as to whether Scotland and Northern Ireland will now leave the UK. If this happens, the countries would likely need to negotiate their own tax treaties with the United States, as their inclusion in the current UK-US tax treaty would no longer be valid.

In addition to warranting the consideration of any US business owner with partnerships or operations in the UK, Brexit also could introduce administrative complications in the realm of trade duties. If the UK does indeed exit the EU, European Union customs duties will no longer apply to it. This would likely necessitate renegotiations between the United Kingdom and European Union regarding customs duties, which could very well be a lengthy and complicated affair.

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