Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...

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Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Moving towards Brexit | Latest
developments and business implications
Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De
Blende, Hendrik Viaene, Erin Clor, Eric von Frenckell
2 July 2020
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Introduction
Richard Doherty | Deloitte
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   2
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Agenda

01                                                              04
                            The UK view                              People issues
                            Raoul Ruparel | Deloitte UK              Erin Clor | Deloitte |
                                                                     Global Employer Services

02                                                              05
                            Customs, Trade and VAT after the         Direct Tax aspects
                            Transition Period                        Eric von Frenckell | Deloitte
                            Daan De Vlieger, Natalie De              Legal | Global Business Tax
                            Blende | Deloitte | Indirect Tax

03                                                              06
                            Legal & Regulatory challenges            Wrap-up & Closing
                            Hendrik Viaene | Deloitte Legal |        Richard Doherty
                            Competition & Regulation

© 2020 Deloitte Belgium. All rights reserved.                         Moving towards Brexit | Latest developments and business implications   3
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Practicalities

• This webinar is being recorded
  and will be
  made available afterwards on
  Deloitte's Brexit Readiness Centre
• The slide deck can be downloaded
  in pdf format in the module
  "Resource list“
• During the webinar, do not
  hesitate to drop questions in the
  chat box (anonymously)
• Your questions will
  be addressed at the end of the
  webinar or after the event by
  e-mail

© 2020 Deloitte Belgium. All rights reserved.   Moving towards Brexit | Latest developments and business implications   4
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Brexit timeline

                                     5 June 2020                           July-August 2020              28 November 2020                                           2021
                                     Fourth round of UK-EU                 Accelerated negotiations      Deadline for the presentation of the                       technical
                                     negotiations finished                 commence                      deal to the European Parliament                            implementation
                                                                                                                                                                    period?

        31 January 2020                                      15 June 2020                        15-16 October 2020
                                                                                                 European Council meeting             31 December 2020
        UK left the EU                                       High Level UK-EU Summit
                                                                                                 scheduled (opportunity to            End of the transition period
                                                             reviewed progress
                                                                                                 approve an Agreement &
                                                                                                 send it to European &
                                                                                                 national parliaments)

© 2020 Deloitte Belgium. All rights reserved.                                                                   Moving towards Brexit | Latest developments and business implications   5
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
The UK/EU negotiations: the sticking points – which could block a deal
on trade & business

 Structure of the deal                          Level playing field     Security cooperation      Fisheries                              Northern Ireland
 •       UK wants suite of                      •   EU seeks non-       •   UK seeks access to    •   EU seeks                           Protocol
         arrangements                               regression on EU        EU security               status quo                         •       UK seeking light
 •       EU wants a                                 rules after             schemes               •   UK seeks annual                            touch ‘risk-based’
         single deal                                transition          •   But will not accept       arrangements                               approach
 •       Overarching                            •   UK seeks to             European Court of     •   UK submitted draft                 •       EU expecting
         governance is                              align with the          Justice oversight         deal on fisheries                          stringent border
         key difference                             precedent of        •   Arrangements may          prior to latest talks                      controls between
                                                    other trade deals       take a long time to                                                  GB and NI
                                                                            fully conclude                                               •       Concessions
                                                                                                                                                 could lead to
                                                                                                                                                 leverage elsewhere

© 2020 Deloitte Belgium. All rights reserved.                                                         Moving towards Brexit | Latest developments and business implications   6
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Agenda

01                                                              04
                            The UK view                              People issues
                            Raoul Ruparel | Deloitte UK              Erin Clor | Deloitte |
                                                                     Global Employer Services

02                                                              05
                            Customs, Trade and VAT after the         Direct Tax aspects
                            Transition Period                        Eric von Frenckell | Deloitte
                            Daan De Vlieger, Natalie De              Legal | Global Business Tax
                            Blende | Deloitte | Indirect Tax

03                                                              06
                            Legal & Regulatory challenges            Wrap-up & Closing
                            Hendrik Viaene | Deloitte Legal |        Richard Doherty
                            Competition & Regulation

© 2020 Deloitte Belgium. All rights reserved.                         Moving towards Brexit | Latest developments and business implications   7
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Polling question 1

 Which of the following outcomes to the EU-UK negotiations
 do you believe to be the most likely?

 •       A comprehensive Free Trade Agreement with a robust
         future governance system and consensus around
         implementing the Northern Ireland Protocol

 •       A narrow and shallow Agreement – which both sides seek
         to build on over time

 •       No Agreement – leading to a No Deal Brexit and the
         accompanying uncertainty for business

 •       Not sure/don’t know

© 2020 Deloitte Belgium. All rights reserved.                     Moving towards Brexit | Latest developments and business implications   8
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
Agenda

01                                                              04
                            The UK view                              People issues
                            Raoul Ruparel | Deloitte UK              Erin Clor | Deloitte |
                                                                     Global Employer Services

02                                                              05
                            Customs, Trade and VAT after the         Direct Tax aspects
                            Transition Period                        Eric von Frenckell | Deloitte
                            Daan De Vlieger, Natalie De              Legal | Global Business Tax
                            Blende | Deloitte | Indirect Tax

03                                                              06
                            Legal & Regulatory challenges            Wrap-up & Closing
                            Hendrik Viaene | Deloitte Legal |        Richard Doherty
                            Competition & Regulation

© 2020 Deloitte Belgium. All rights reserved.                         Moving towards Brexit | Latest developments and business implications   9
Moving towards Brexit | Latest developments and business implications - Richard Doherty, Raoul Ruparel, Daan De Vlieger, Natalie De Blende ...
The UK view
Raoul Ruparel | Deloitte UK
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   10
Economic impacts of Brexit
Source: HM Government, Long term Economic Analysis, Nov 2018

© 2020 Deloitte Belgium. All rights reserved.        Moving towards Brexit | Latest developments and business implications   11
Economic impacts of Brexit
Source: HM Government, Long term Economic Analysis, Nov 2018

© 2020 Deloitte Belgium. All rights reserved.        Moving towards Brexit | Latest developments and business implications   12
UK/Belgium trade

 UK trade in goods with Belgium (2018)

 Product                                        Exports | in €bn                          Imports | in €bn

 Total all products                                  16.9                                               30.8

 Primary commodities                                  4.7                                                6.7

 Fuels                                                3.4                                                2.9

 Manufactured goods                                  10.4                                               23.8

 Chemical products                                    3.3                                                7.5

 Machinery and transport equipment                    4.8                                               10.5

© 2020 Deloitte Belgium. All rights reserved.                 Moving towards Brexit | Latest developments and business implications   13
Customs, Trade and VAT after the
Transition Period
Daan De Vlieger | Deloitte | Global Trade Advisory
Natalie De Blende | Deloitte | VAT Consulting
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   14
Possible outcomes

                                                Will a trade deal be agreed and
                                                ratified by 31 December 2020?

                       NO                                                                       YES
    - Customs solutions from Withdrawal                                        - New economic relationship between
      Agreement will enter into force, in                                         UK and EU starts in principle on 1
       principle starting 1 January 2021                                                   January 2021

         Post-transition fallback scenario                                                     Future deal scenario

© 2020 Deloitte Belgium. All rights reserved.                                 Moving towards Brexit | Latest developments and business implications   15
Status and UK versus EU position on customs & trade

                                                Trade and Rules of origin negotiations

                                   1
                                                •   Same view regarding zero tariffs
                                                •   Rules of origin: UK would prefer rules as in EU-Japan FTA. EU would prefer UK to join PEM
                                                    Convention  UK asks for diagonal cumulation
                                                •   UK wants mutual recognition of conformity assessments, sanitary & phytosanitary
                                                    standards and AEO status. Currently rejected by EU who would prefer to embed this in a
                                                    comprehensive agreement and only where safety and security aspects can be assured.

                                                New UK Tariff (UKGT) – MFN tariff regime

                                   2
                                                •   Replacement of Common External Tariff (EU CET)
                                                •   Tariff on 2.000 products eliminated and 6.000 tariff lines simplified – designed to make
                                                    trade with UK more attractive
                                                •   EU tariffs are rounded down to the next even number  UK will always have a lower or
                                                    similar import tariff as the EU

                                                Northern Ireland Protocol
                                                •

                                   3
                                                    UK recognizes the need for additional checks and infrastructure on trade between Great
                                                    Britain and Northern Ireland, as expected by EU
                                                •   UK differs with EU approach on: no new customs infrastructure; checks “where necessary”
                                                    and potentially when goods are on the market (UK point of view) rather than at customs
                                                    checkpoints (EU point of view)
                                                •   UK has not yet answered the question on how goods at “substantial risk” of entering the
                                                    Republic of Ireland will be identified.

© 2020 Deloitte Belgium. All rights reserved.                                                                    Moving towards Brexit | Latest developments and business implications   16
Post-transition no trade deal scenario | Customs impact

  •       Trade between UK and EU will be subject to customs formalities and duties, with a special status for Northern Ireland
  •       UK and Northern Ireland form one single customs territory (outside the EU customs territory), with its own customs
          rules, duty framework, foreign trade policy (incl. the possibility to establish free trade agreements with non-EU
          countries, etc.)

                                                                                         Examples of customs formalities affecting
                                                                                         future EU-UK trade flows (both imports
                                                                                         and exports):
                                                                                         1. Registration with EU and/or UK
                                                                                             customs authorities
                                                                                         2. Entry Summary declaration (ENS) is
                                                                                            submitted to the port of entry
                                                                                         3. Goods are risk-assessed prior to entry
                                                                                         4. Temporary storage declaration
                                                                                            (+additional check if required)
                                                                                         5. Customs clearance
                                                                                         6. Goods presented to customs
                                                                                            authorities: checks (e.g. on rules of
                                                                                            origin) and additional declaration
                                                                                            if required

                                                                                                  These additional customs formalities
                                                                                                         imply additional costs as well
© 2020 Deloitte Belgium. All rights reserved.                                        Moving towards Brexit | Latest developments and business implications   17
Post-transition no trade deal scenario | VAT impact

  •       Supplies of goods between GB and EU will be treated as imports and exports
  •       Supplies of goods between Republic of Ireland and NI would remain dispatches and arrivals under the terms of the
          Northern Ireland Protocol (even if no FTA is reached by the end of 2020).

                                                                                        VAT impact on future EU-GB trade flows of goods
                                                                                        (import and export):
                                                                                        1.    Change in VAT reporting (e.g. use of different
                                                                                              boxes in VAT return, sales to GB no longer to
                                                                                              be included in EC Sales List)
                                                                                        2.    Impact tax codes (possible new tax codes or
                                                                                              codes becoming redundant)
                                                                                        3.    Possibly more VAT registrations (due to EU
                                                                                              VAT simplification rules no longer being
                                                                                              applicable, e.g. triangulation, distance selling,
                                                                                              MOSS)
                                                                                        4.    Change in evidence procedure (import/export
                                                                                              documents need to be obtained as evidence
                                                                                              for reporting)
                                                                                        5.    Cash impact (in case imports in countries
                                                                                              without import VAT deferral)
                                                                                        6.    New VAT legislation? (will UK introduce a
                                                                                              regulatory framework different from the EU?
                                                                                              Will they still adhere to existing ECJ case law?)
                                                                                        7.    Chain transactions (inside EU or UK VAT
                                                                                              scope? Quid application quick fixes?)

                                                                                       Cross border services between EU and GB,
                                                                                 NI to be treated as services with third countries
© 2020 Deloitte Belgium. All rights reserved.                                       Moving towards Brexit | Latest developments and business implications   18
Post-transition no trade deal scenario | Regulatory framework &
Ireland issues

     UK Regulatory territory                         • UK to implement and enforce its own
                                                       regulatory framework (which may be
     EU Regulatory territory                           different from that of the EU)
                                                     • But Northern Ireland will align to the
                                                       following rules of the EU Single Market:
                                                        − Legislation on goods
                                                        − Sanitary rules for veterinary controls
                                                        − Rules on agricultural production /
                                                          marketing
                                                        − VAT and excise in respect of goods
                                                        − State aid rules
                                                     • Specific customs rules and procedures
                                                       will apply to trade between the EU and
                                                       Northern Ireland

© 2020 Deloitte Belgium. All rights reserved.    Moving towards Brexit | Latest developments and business implications   19
Post-transition no trade deal scenario | UK Phased implementation

    From January 2021                               From April 2021                                     From July 2021
    UK importers of standard goods have             All products of animal origin and all               Traders moving all goods will have to
    up to 6 months to complete customs              regulated plants and plant products                 make declarations at the point of
    declarations and tariff payments can            will also require pre-notification and              importation and pay relevant tariffs.
    be deferred until completion of these           the relevant health documentation                   Full Safety and Security declarations
    declarations (except for some specific                                                              will be required, while for Sanitary and
    goods e.g. tobacco or toxic chemicals).                                                             Phytosanitary (SPS) commodities there
    Physical checks at the point of                                                                     will be an increase in physical checks
    destination are planned for several live                                                            and the taking of samples
    animal species (especially those
    deemed high risk)

                                                1                             2                                                                 3

  This approach does not apply to the flow of trade between Northern Ireland and Ireland, or between
  Northern Ireland and GB.
© 2020 Deloitte Belgium. All rights reserved.                                                Moving towards Brexit | Latest developments and business implications   20
Legal & Regulatory challenges
Hendrik Viaene | Deloitte Legal |
Competition & Regulatory Law
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   21
Consequences of No Deal – Regulatory divergence
4 important affected areas

 • Stakeholder preparedness                                                             • “UK GDPR”
   notices (2018 – 2019)                                                                • Role of UK’s Information
 • Notices for readiness                                                                  Commissioner’s Office
   (2020 – 48 available)                                                                • Transfers of data between
 • Duplication of regulatory approvals if                                                 – EU/UK will require EU adequacy
   UK diverges from EU rules                                                                 decision and
                                                                                          – UK equivalent behaviour
                                                Sectoral or
                                                Product
                                                                   Data
                                                Regulatory
                                                divergences

                                                               Contract
                                                M&A
                                                              Reliability

 •     Merger control                                                                   • Perform a contract check
 •     Foreign Direct Investment control                                                • Contract renegotiation and redrafting
 •     Foreign subsidies in the Single Market                                             should be high on your priority list
                                                                                        • Force Majeure will not come to
                                                                                          the rescue
© 2020 Deloitte Belgium. All rights reserved.                               Moving towards Brexit | Latest developments and business implications   22
GDPR – Data

• GDPR provisions (implemented in UK Data Protection Act 2018) continue to apply in UK after Brexit
• 2 areas of uncertainty remain

Data transfers from EEA to UK                                 Consistency and cooperation
• “Adequacy” is needed – otherwise: data transfer solutions   • 1 lead supervisory authority for cross-border cases
  at organization level required
                                                                −Report breaches to lead supervisory authority and UK
• Political Declaration (November 2019) and Commission           Information Commissioner’s Office
  Communication (June 2020)                                     −Separate enforcement actions may lead to duplicate fines
   −Data protection is “basis for cooperation”
   −Adequacy assessment under GDPR and Data Protection
    Law Enforcement Directive ongoing
• Adequacy decision expected during 2020

© 2020 Deloitte Belgium. All rights reserved.                                  Moving towards Brexit | Latest developments and business implications   23
Contracts – 6 months left to get ready
•      Covid-19 may have been a reason for not devoting sufficient resources to review contracts – but it
       will not be an acceptable excuse if problems arise
•      Best practice approach:

                                                                                                     No Force Majeure
     Step 1
     Mapping of
     the parties                 Step 2
                                 Mapping of the
                                                                Step 3
                                 contract structure
                                                                Screening of                                             Step 4
                                                                the contract                                             Actual renegotiation                                     31 December
                                                                                                                                                                                  2020

      1 July 2020                  1 August 2020                   1 September 2020                                         1 October 2020

                                                Contract impact                                                                         Renegotiate existing contracts

                    Intellectual property                           Pricing | Fluctuations
                                                                                                                                    Urgency:                          Method:
                Data protection | GDPR                              Delivery
                                                                                                                           • Hard Brexit vs. Soft         • Depending on time frame
                                                                                                                             Brexit (2020)                • Single general addendum vs.
                        Applicable law |             Impacted          Standards | Norms                                                                    Case-by-case renegotiation
                       Competent court                clauses          (e.g. CE-labels, packaging)

                                Territory                           Sectoral regulations                                                          Future contracts

                              EU funding                            Duration | Timings

© 2020 Deloitte Belgium. All rights reserved.                                                                           Moving towards Brexit | Latest developments and business implications   24
M&A – European Regulatory hurdles increasing Post Brexit

Is my M&A deal a “concentration” that must be cleared by competition authorities?
• Which competition authorities will be involved? UK CMA will be added to the list
• Impact on timing of transactions?
• What kinds of decisions will be made (conditional or unconditional clearance, or straight prohibition)?
Can my M&A deal be reviewed under Foreign Direct Investment legislation?
• European Commission Screening Guidelines 25 March 2020
• FDI legislation at Member State level – several Member States are tightening their rules based on COVID-19 experiences
  (e.g. Germany, Hungary, Poland) and UK also
• Will UK investment soon be reviewed under EU and Member State FDI legislation?
Commission White Paper on Foreign Subsidies in the Single Market
• Includes foreign subsidies facilitating the acquisition of EU companies (Module 2):
   −Notification obligation with European Commission when certain thresholds met
   −Suspension obligation
   −Application of European Interest test
• Consultation ongoing until 23 September 2020, adoption during 2021

© 2020 Deloitte Belgium. All rights reserved.                                     Moving towards Brexit | Latest developments and business implications   25
People issues
Erin Clor | Deloitte | Global
Employer Services
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   26
Brexit timeline: People Issues

                                                                                          1 January 2021
                                                                                          •   New UK immigration system.
                                                                                              All EU nationals arriving for
                                                   31 December 2020                           work purposes or stays of
                                                   •   Deadline for EU nationals              over 90 days will require
                                                       to enter/stay/work in the              visas.
                                                       UK without restrictions            •   UK nationals subject to same
                                                       (and vice versa).                      immigration rules as non-EU
                                                                                              citizens in Europe
                                                                                   2021

                                            2020                                                                                            30 June 2021
                                                                                                                                            •   Deadline for
                                                                                                                                                applications by EU
                                                                                                                                                nationals to apply
                                                                                                                                                for “Settled Status”
                                                                                                                                                or “Pre Settled
                                                                                                                                                Status” in UK

© 2020 Deloitte Belgium. All rights reserved.                                                    Moving towards Brexit | Latest developments and business implications   27
Freedom of Movement Landscape

                                                                             United Kingdom and EU 27

 Work                                    Residence                  Travel                       Personal Income Tax              Recognition of                        Social Security
 • Right to work                         • Rights of EU             • Visa free travel up        • Protection from                Professional                          • Expected
   protected for                            citizens residing in       to 90 days per               double taxation               Qualifications                           continuation
   those in UK/EU                           UK (and UK in EU)          180- day period              will remain                   • Applies to                             of current
   before January                           before January 1,          for business or              in place                         qualifications                        arrangements on
   1, 2021                                  2021 are                   tourism purposes          • Negotiations                      obtained after                        social security
 • Arrival post                             protected.              • New electronic                ongoing - future                 January 1, 2021                       coordination
   January 1: subject                    • Deadlines for               travel                       protections                   • Impact limited to                   • Negotiations
   to work visa                             registration of            authorisations               (capital gains tax)              specific regulated                    on extent of
 • Processing times                         presence:                  (ETA for UK, ETIAS           not guaranteed                   functions                             coverage ongoing
   can be long                              June 30, 2021              for EU) needed                                             • After January 1,
                                                                       prior to travel                                               professional
                                                                       (similar to the                                               qualifications
                                                                       ESTA system for                                               subject to
                                                                       visitors to the US)                                           new rules

                                                             Immigration - UK Points Based System and Reciprocity

       UK Points Based system                    Immigrant workers in UK        New applicants require a job     EU/UK negotiations                          Variation across the EU will
       applicable January 1, 2021                have more freedom in the       offer from a Home Office         regarding immigration                       add complexity and require
       for new arrivals                          labour market as they are      approved sponsor, & must         ongoing. Expectation that                   increased planning -
                                                 less dependent on their        meet required skill and          immigration rules for third                 processing times will
                                                 employers and do not need      language levels                  country nationals will apply                increase
                                                 permission to change jobs                                       to UK nationals in EU on
                                                                                                                 Jan 1, 2021

© 2020 Deloitte Belgium. All rights reserved.                                                                             Moving towards Brexit | Latest developments and business implications   28
Direct Tax aspects
Eric von Frenckell| Deloitte Legal |
Global Business Tax
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   29
Corporate income tax
Introduction

  Brexit consequences                                                     What is at stake?
  During transition period                                               Loss of access to EU law for UK-related situations
  • EU law will continue to apply during this period to and in the       • Primary EU law: fundamental freedoms, including case law and
    UK as if it were a Member State and any changes in EU law              its impact on national tax legislations
    will automatically apply to and in the UK                            • Secondary EU law: tax directives (Parent/Subsidiary Directive,
                                                                           Interest Royalty Directive, (Tax) Merger Directive, ATAD, …)
  After transition period
                                                                         Key points of attention
  • The UK’s starting position is to adopt all existing EU law into
                                                                         • Dividends/interest/royalties: application of the Tax Treaties
     UK law. This will create stability until and if the UK decides to
                                                                           between UK and individual EU Member States
     change its tax laws in the future
                                                                         • Domestic tax legislations dependent on EU/EEA
  • The existing tax reliefs and exemptions applicable to
                                                                           residency/nexus of the parent company (e.g. Belgian tax
     transactions between UK and EU based entities as well as
                                                                           consolidation regime)
     access to specific tax regimes/benefits may be affected after
                                                                         • Participation exemption availability
     the transition period
                                                                           (e.g. UK subsidiary subject to a specific low-taxation regime
                                                                           and upstreaming dividends to a Belgian parent)
                                                                         • Loss relief
                                                                         • Restructuring (and loss of access to the EU (Tax)
                                                                           Merger Directive)
                                                                         • Transfer pricing and elimination of double taxation
                                                                         • Other (UK) tax legislation derived from EU Directives
                                                                           (ATAD, DAC6, …)

© 2020 Deloitte Belgium. All rights reserved.                                               Moving towards Brexit | Latest developments and business implications   30
Agenda

01                                                              04
                            The UK view                              People issues
                            Raoul Ruparel | Deloitte UK              Erin Clor | Deloitte |
                                                                     Global Employer Services

02                                                              05
                            Customs, Trade and VAT after the         Direct Tax aspects
                            Transition Period                        Eric von Frenckell | Deloitte
                            Daan De Vlieger, Natalie De              Legal | Global Business Tax
                            Blende | Deloitte | Indirect Tax

03                                                              06
                            Legal & Regulatory challenges            Wrap-up & Closing
                            Hendrik Viaene | Deloitte Legal |        Richard Doherty
                            Competition & Regulation

© 2020 Deloitte Belgium. All rights reserved.                         Moving towards Brexit | Latest developments and business implications   35
Deloitte Brexit impact assessment: drivers of change for business
5 key themes – what we know and what still remains to be agreed

                                                                                                                       Trade and
                        Supply chain                    People                         Legal and regulation                                                      Tax and finance
                                                                                                                       market access
                      Customs declarations            UK’s EU settlement scheme       Corporate structure e.g.,       Standard Rules of Origin                  Outside of EU VAT system
                                                                                      establishment and board         (RoO) framework
                      Proof of origin                 EU member state                 composition rules of                                                      Withholding taxes (subject to
                                                      registration schemes            member states                   Sanitary and Phyto-Sanitary               double taxation treaties)
                      Northern Ireland in UK                                                                          (SPS) measures –
     Known knowns

                      customs territory, but          UK move towards same rules      Cross border mergers            border checks                             Changes to tax registration
                      applying union customs code     for EU and non-EU nationals                                                                               and reporting requirements
                                                      under points-based system       UK outside of EU                Technical barriers to trade
                      Customs duties, subject to                                      regulatory bodies                                                         Northern Ireland – subject to
                      FTA negotiations                UK’s future                                                     More limited services                     EU VAT rules for goods
                                                      immigration system              Northern Ireland – broad        access/certain areas excluded
                      Customs easements, mutual                                       alignment to EU rules           from FTA, e.g., audio-visual              Macroeconomic environment
                      recognition of Authorised       Conditions related to travel    for goods                                                                 may be influenced by
                      Economic Operator (AEO)         to perform services – limited                                   End to mutual recognition of              FTA negotiations
                                                      framework within FTA            State aid                       regulations – separate
                      Safety and                                                                                      regulatory approvals for                  Tax incentives –
                      security agreement              Mutual recognition of           Labour and social protection    UK and EU                                 subject to level playing
                                                      professional qualifications                                                                               field commitments
                      Details of the operation of                                     Environment and climate         Specific arrangements for
                      the Northern Ireland protocol   Social security cooperation     change provisions               Northern Ireland                          Details of the operation of the
                                                                                                                      (the protocol)                            Northern Ireland Protocol
                                                                                      Potential changes to UK
     Known unknowns

                                                                                      regulation over time            Financial services

                                                                                                                      Personal data flows

                                                                                                                      Third country FTAs

                                                                                                                      Product standards and
                                                                                                                      conformity assessments

                                                                                                                      Details of the operation of the
                                                                                                                      Northern Ireland protocol

© 2020 Deloitte Belgium. All rights reserved.                                                                        Moving towards Brexit | Latest developments and business implications      36
Polling

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   37
Polling question 2

 Which of the following business activities is of most concern
 to you regarding Brexit?

 •       Market access: trade barriers, delays, new regulatory
         challenges, VAT changes

 •       People issues: work visas, contracting and personal tax

 •       Data flows

 •       Cross-border Corporate Structure & Direct Tax: forced
         changes to your group structure, management and
         financing

 •       Other

© 2020 Deloitte Belgium. All rights reserved.                      Moving towards Brexit | Latest developments and business implications   38
Questions & Answers

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   39
Polling question 3

 To what extent do you think your business is prepared for the
 end of the transition period on 31 December 2020?

 •       Completely prepared and have no concerns

 •       Not prepared but confident we have enough time

 •       I am concerned we do not have enough time

 •       I am very concerned we do not have enough time

 •       Not sure/don’t know

© 2020 Deloitte Belgium. All rights reserved.                    Moving towards Brexit | Latest developments and business implications   40
Wrap-up
Richard Doherty
July 2020

© 2020 Deloitte LLP. All rights reserved.   Moving towards Brexit | Latest developments and business implications   41
Wrap-up

                                                The time to act is NOW

                                                          i

© 2020 Deloitte Belgium. All rights reserved.                      Moving towards Brexit | Latest developments and business implications   42
Deloitte’s Brexit support

                                  Brexit Help Centre                                                Brexit Readiness Centre

• Corporate & withholding tax                   • Risk management                                • Latest developments

• Customs and trade                             • SMEs                                           • Upcoming webinars and seminars

• Legal                                         • Supply chain                                   • Brexit Readiness Updates

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