Brexit Withdrawal Agreement Tax


Prior to the UK`s exit from the EU, the dividend exemption was sufficient if the dividend came from a British company that owned at least 10% of the Estonian company`s shares or votes. The Estonian company was not required to submit the income tax certificate. (Article 50 (11) 1) of the Income Tax Act) The transitional period is from February 1, 2020 to December 31, 2020. During this period, employers` salaries are properly perceived in cross-border situations, as was the case before leaving the United Kingdom. In the absence of a request for an extension of the transitional period, it will end on 31 December 2020. Notwithstanding the ongoing negotiations on a possible agreement on future relations and as ambitious as the agreement may be, as long as it is applicable, all states shipped to the Uk and received by the United Kingdom may be subject to customs formalities and checks from 1 January 2021. Prior to the UK`s exit from the EU, income tax was not levied on royalties paid to a UK-based tax for associates (paragraph 31, paragraph 4, of the Income Tax Act). The agreement on the UK`s withdrawal from the European Union provides for a transitional period from 1 February to 31 December 2020. EU law applies to the United Kingdom and the United Kingdom during the transitional period. Prior to the UK`s withdrawal from the EU, it was sufficient for the benefit of the establishment in the United Kingdom to be imputed (Article 50 (11) 2) of the Income Tax Act). In addition, the provisions of the withdrawal agreement of 12 November 2019 replace, during the transitional period, the rules of domestic law adopted for a „hard Brexit“ scenario. Finally, EU legislation, which comes into force during the transition period, should in principle be applied by the UK until the end of that period.

These include, for example, reporting obligations imposed on intermediaries and certain subjects from 1 July 2020 by directive 2018/822 of 25 May 2018 („DAC 6“). If the transition period were extended, it would include the new VAT system for e-commerce, introduced by directive 2017/2455 of 5 December 2017, which comes into force on 1 January 2021. On 14 November, EU and UK negotiators reached an agreement on the UK`s exit from the European Union (BREXIT). A political declaration has also been developed to create a framework for future relations. In accordance with the AGREEMENT on the UK`s withdrawal of 29 January 2020, the Uk has left the European Union since 1 February 2020. II – Some provisions are agreed for the period following the transition period The agreement does not contain permanent tax rules for the period following the transitional procedure, which must therefore be used by the European Union and, if necessary, by its Member States to organise their future relations with the United Kingdom. However, it sets out some rules that temporarily apply to situations that occurred before the end of the transition period. With regard to customs issues (Article 47-49), as well as VAT (Article 51) and excise duties (Article 52), the application of EU law to flows beginning before the end of the transition period is maintained.