Brexit - Checklist

With only 15 days ahead of us, companies dealing with the UK (and vice versa) can no longer sit and wait for a deal between the UK and the EU 27 on Brexit, and need to consider taking steps to be well prepared.

Below, you will find a checklist which can be useful to prepare yourself for a hard Brexit with the UK :

VAT and Customs

• Purchasing goods from/selling goods to the UK: obtain an EORI number;
• Purchasing goods from the UK: obtain an ET-14000 license to limit the pre-financing of import VAT;
• If you have a UK establishment: consider the Transitional Simplification Procedures (TSP) for deferral of Customs Duties and VAT on import from EU member states, available in the event of ‘no deal’;
• Future import duties on purchases of goods from the UK: determine cash-impact on your margin;
• Services supplied to and/or services received from UK resident entities: change in ERP/Accounting system;
• Obtaining a AEO-license (Authorised Economic Operator) to benefit from certain custom-regulations;
• Chain-transactions involving 3 parties (triangulation), call-off transactions, e-commerce transactions, MOSS VAT return for sales to UK private individuals: consider VAT implications of the regimes and loss of simplifications;
• EU VAT refund of 2018 UK VAT: ask for a reimbursement before March 29, 2019;
• ...

Global Mobility

• UK contractors are working on Belgian territory (and vice versa): apply for a valid work and residence permit in advance to avoid consequences of any delays;
• UK employers seconding staff to Belgium (and vice versa): determine social security status and benefits due to absence of EU social security regulation;
• Employing staff: verify specific local labour law regulations regarding working time, temporary staff, minimum wage, collective redundancy, temporary / permanent settled status for EU nationals already employed in the UK (and their families);
• UK Secondments to Belgium (and vice versa): check feasibility of local workforce or permanent recruitment instead of secondments;
• Labour cost: review existing reward structures/policies for UK national and EU staff and assess existing operating model viability in light of possible increased labour costs.

International Taxation / Corporate Income Tax

• Cross-border payments of interest / royalties / dividend between Belgium and UK companies: review additional tax impact as EU Directive benefits may no longer be applicable to UK companies;
• Cross-border reorganisations involving UK companies: review additional tax impact as EU Merger Directive benefits may no longer be applicable to UK companies.

Legal

• Existing contracts: review (commercial) agreements to assess potential Brexit impact (territorial scope, choice of law, applicable EU-regulations, liability clauses, termination, ...);
• New contracts: consider a Brexit-clause to limit any potential financial or other impact of the Brexit ("material adverse change" clause, renegotiation clause, limitation of liability, ...);
• IP-rights: assess your IP-rights especially if those have been requested on a EU-level;
• Review your data flows and identify where you receive data from the UK or transfer date to the UK;
• Assess necessity of putting in place the necessary legal safeguards measures (Binding Corporate Rules, Standard Model Contract clauses, ...);
• Assess whether your processing operations and policy information documents need updating.

Our colleagues from our Mazars Tax department are happy to discuss with you the potential implications of a "hard Brexit".