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Contribution Details

Type Master's Thesis
Scope Discipline-based scholarship
Title Brexit: Possible consequences and implications for the Value Added Tax in the United Kingdom
Organization Unit
Authors
  • Sacha Ravinger
Supervisors
  • Michel Habib
  • Jacqueline Haverals
Language
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Number of Pages 121
Date 2018
Abstract Text This Master’s thesis examines the possible consequences and implications on the UK VAT system caused by Brexit. A comprehensive analysis on possible future scenarios, consideration of current political discussions and interviews with various tax experts predict small direct changes for the UK VAT system by exiting the EU. With Brexit the UK will be free to set its own VAT rates, apply zero-rating again and will not be bound by decisions of the European Court of Justice anymore. Due to the lack of the “intra-Community” transaction type, all non-UK supplies and purchases of goods will be treated as exports and imports causing higher administrative burdens, longer processing times and therefore higher costs for UK companies trading with EU businesses and vice versa. For the British financial services sector Brexit might bring unexpected benefits from a VAT perspective. With Brexit, British financial services institutes might be able to deduct input VAT on the services provided to companies being established in the EU. After Brexit, the UK will not be able to participate in further VAT harmonization measures of the EU. Of highest importance will therefore be, that the UK will monitor changes in the EU VAT area closely and will try to align. Only an aligned VAT system will support frictionless trade between EU and UK companies by reducing complexity and minimizing double or non-taxation.
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