Indirect Tax News – July 2017
03 July 2017
Welcome to the summer edition of BDO Indirect Tax News.
While there haven't been many material developments on the indirect taxes front over recent months, the lead in to the Brexit negotiations in late June has attracted lots of speculation regarding how the remaining 27 European Union Member States will conduct business with the UK once the final details have been negotiated. Both VAT and Customs Duty are no doubt high on the list of issues for consideration.
As it is likely that the UK will leave the Customs Union, issues of concern range from 'additional bureaucracy likely to add to both costs and delays in delivery times for goods' to 'additional customs duty costs and VAT cash flow considerations'. As you would expect, these could prove to be particularly challenging when goods are sourced from, or supplies are routed through, the UK, or where 'end customers' are based in the UK.
As it's been a year since the Brexit vote was passed, the owners of quite a number of Irish and indeed European businesses whose supply chains are likely to be directly affected have been conducting 'impact studies' with a view to identifying ways for them to de-risk their businesses from any potential negative implications. As stability is key in any business, their aim has been to avoid finding themselves under pressure to change their business model in a tight timeframe at the end of the Brexit negotiations when the fine details of the negotiations become apparent.
BDO Member Firms have been proactively engaging with clients to assist with 'Brexit Impact studies'. Our colleagues in the United Arab Emirates, Kuwait, Bahrain, Oman, Qatar, and Saudi Arabia have also been working closely with clients with activities in the Gulf Region to help them assess the impact the introduction of VAT in the region in 2018 will have on their operations.
If you have any concerns regarding the impact these or any other developments may have on your business, please reach out to your local BDO Partner who will be delighted to provide the necessary support you may require.
In the meantime, I hope you find the various indirect tax updates included in this publication of interest.
Chair - BDO International VAT Centre of Excellence Committee