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Brexit

Information on taxes, customs and financial services

On 29 March 2017, the United Kingdom (UK) notified its intention to withdraw from the EU. In order to be prepared for the withdrawal from the EU and to contain disruptions, the EU and the UK have agreed on a “Withdrawal Agreement” and a political declaration on the future relationship. As the Agreement has been rejected by the British Parliament, potential scenarios for the UK´s withdrawal from the EU are:

Orderly Withdrawal from the EU / Deal 

If the British Parliament approves the Withdrawal Agreement, the UK 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 (free trade agreement) is planned by 1 January 2021. If no 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.

Extension of the Negotiation Period

UK could ask for an extension of the negotiation period; agreement of all other EU Member States provided the Withdrawal could be postponed by one year.

Revocation of the Withdrawal Request

The European Court of Justice ruled that the UK is free to unilaterally revoke its intention to withdraw from the EU by 29 March 2019 or, in the event of an extension of the negotiation period, even up to its end.

Disorderly Withdrawal from the EU / No Deal 

If none of the above mentioned steps are taken by the UK, it will automatically leave the EU at the end of March 2019 – but without a “transition phase” or other provisions. Hence, the UK will have to be treated as a third country with immediate effect. This entails a number of changes with regard to the BMF’s competences – above all in respect of customs, taxes, and financial services.

The Withdrawal Agreement and the political declaration are available at the website of the European Commission. Furthermore 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.

On February 18, 2019 the European Commission intensified information dissemination on Brexit preparedness.

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