Brexit and Your Overseas Operations
If you’re operating overseas, you should be aware of the economic impact new Brexit rules could have. Requirements will become more complicated and it could become more expensive to do business. The Value Added Tax (VAT) system that currently exists will be eliminated between the UK and other members of the EU. With the UK as part of the EU, it is easier for manufacturers distributors to maintain multi-country supply chains. However, with new Brexit regulations, there could be up to 17% duty added to the trade of goods between the UK and the EU.
This could cause big compliance headaches for manufacturers, many of whom may reevaluate their supply chains and consider alternate options with business partners who are all still in EU member countries. When Brexit is finalized, transactions between the UK and EU will be treated as imports and exports, rather than intra-community transactions. Any manufacturers distributors planning to move forward with their current supply chains should use the next two years before implementation to figure out a sound business-to-government compliance reporting system.
Talk to one of our CPAs if you have any questions about this or other matters affecting your business. The full article can be found here.