As the citizens of the UK opted for brexit on June 23, the aftermath will not be shown immediately as it may take 2 years to for the process to fully start. So, today we are presenting you some certain changes in the tax laws that can impact the businesses in the UK subsequently.

The indirect taxes like VAT and custom duties are likely to be affected following brexit. Nonetheless, direct taxes like income tax, corporation tax, capital gains tax and stamp taxes are less likely to be affected after all because they are governed by the UK law.

As VAT is chargeable on the sale of goods and services by the businesses in the UK, brexit means it will no longer be required. However, VAT is highly unlikely to be eliminated because it helps to accumulate a huge amount of revenue in the UK.

Since all the exports and imports were supplied freely within the EU (European Union), the custom duties will be imposed as a result of the UK leaving EU. This can also lead to EU’s custom duties to be applied in the imports from the UK making the business less favourable for the purchasers from EU.

When a parent company in one EU Member State collect distributed profits from a subsidiary company in other EU Member State, the former EU Member State must not tax the receipt. In case if it charges tax, parent company must be allowed credit for tax paid by the subsidiary company with regards to the distributed profits. Thus, leaving the EU means this rule will no longer apply which can result in double taxes in profit distributions.

Leaving EU also means that the UK will no need to comply with the merger directive and be free to charge taxes on the merger between the UK and different member states of the EU.

In conclusion, it can be stated that brexit can probably give rise to the above mentioned scenario in the future which can be good for the UK businesses. However, these tax implications still depend on the agreements between the UK and the EU.