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Brexit

Information on taxes, customs and financial services

On 29 March 2017, the United Kingdom notified its intention to leave the EU. In order to be prepared for the exit from the EU and to make it as smooth as possible, the EU and the UK have negotiated a “Withdrawal Agreement” and a political declaration on the future relationship. 

Following the rejection of the agreement by the UK Parliament, additional declarations were adopted by the EU27 and the UK to facilitate the adoption of the agreement by the UK Parliament.

On the other hand, the European Council granted the UK an extension of the negotiating phase, resulting in the postponement of the withdrawal date. The current situation:

  • UK's withdrawal from the EU should take place by 1 November at the latest. 
  • If the UK ratifies the withdrawal agreement in the meantime, the withdrawal should take place on the 1st day of the month following the ratification.
  • If the UK does not participate in the EP elections, EU membership will cease on 31 May. 
  • UK has the right to withdraw its resignation at any time.

This leaves the actual date of withdrawal open. It is also unclear whether the withdrawal will be done on an  orderly or disorderly manner.

Orderly Withdrawal from the EU / Deal 

If the British Parliament approves the Withdrawal Agreement, the United Kingdom would essentially be treated as an EU Member State during the “transition period” until the end of 2020. With regard to the field of competences of the Federal Ministry of Finance of Austria (BMF), no significant changes for citizens or companies are thus to be expected for the time being.  

Subsequently, the entry into force of an agreement on the future relationship is planned by 1 January 2021. If no a such agreement can be found, the transition period could be extended by up to two years, the so-called “backstop solution” or an alternative arrangement for avoidance of a “hard” border between Ireland and Northern Ireland could be applied. 

Disorderly Withdrawal from the EU/ No Deal 

Without the adoption of the Withdrawal Agreement by the UK Parliament, the revocation of the withdrawal request or the proposal of a viable alternative to the EU27 by the UK, the UK would exit the EU by 1 November 2019 – but with no "transition period" or other arrangements.

This means that the United Kingdom will have to be treated as a third country. This will be accompanied by a number of changes in the scope of the Federal Ministry of Finance, involving the areas of customs, taxes and financial services, among others.

Revocation of the Withdrawal Request

ECJ case law has given the UK the opportunity to unilaterally withdraw its declaration of intent to exit the EU by the exit date.

Further information

The Withdrawal Agreement and the political declaration are available at the Website of the European Commission. The European Commission has prepared Fact Sheets in English on the topics that are affected by Brexit and put forward legislative initiatives on contingency measures.

The relevant European Commission's Brexit information can be found under the link EC Brexit negotiations

The Federal Ministry of Finance has compiled information on the subject for the following areas: