Double Taxation Agreement After Brexit

Once the UK leaves the EU, countries may reconsider their double taxation deal with the UK under future trade deals, but that still seems relatively unlikely before Brexit. Under double taxation conventions, you may have to pay taxes both in your country of work and in your country of residence: in January 2020, the EU and the UK agreed on the terms of the withdrawal agreement. A transitional period is in effect until 31 December 2020 and any reference to Member States in EU tax law and directives should be understood as involving the UK. Similarly, the fundamental freedoms of the EU will continue to apply to the UK. If you live in one EU country and work in another country, the tax rules for your income depend on national laws and double taxation conventions between the two countries – and the rules may differ considerably from those that determine the country responsible for social security issues. If the UK sets sail for sunset and leaves the European Union, so-called Brexit, what impact will this have on the taxation of international populations living in Spain? The tax framework in all countries is based on the fact that these agreements allocate tax duties between countries and eliminate double taxation, either by ensuring that only one country can tax labour income, or, if both countries have tax duties, that the country in which you live will receive the taxes paid in the country where you work. If the withdrawal agreement negotiated between the UK and the EU comes into force and an orderly Brexit comes to fruition, customs legislation will not change over the next two years. The withdrawal agreement provides for a transitional period until at least the end of 2020, during which time EU legislation will continue to apply. However, for companies that were relocated to the UK before Brexit and who, following relocation, have requested that the tax not be paid in tranches until 2016 or from 2016, subsequent Brexit will not result in immediate taxation or immediate payment of unpaid payments. The same is true where the taxation on exit from the United Kingdom, decided or signed contractually before the departure of the United Kingdom, has not been fixed or can be paid in tranches for restructuring under the Austrian Sanitation Act. On 23 October 2018, a new double taxation agreement was signed in Vienna, which came into force on 1 March 2019 and applies to Austrian taxes from 1 January 2020 (Bundesgesetzblatt III 32/2019). The new agreement will apply to the UK and Northern Ireland from 1 April 2019 for corporation tax and from 6 April 2019 for income tax and capital income tax.

Should there be a Brexit without a deal, the customs administration will treat the UK like any other third country that does not have a specific customs agreement with the EU. All customs rules governing trade in goods between third countries and the EU would apply immediately. The most important legislation that applies here is the EU Customs Code (UCC). The double taxation treaties The OECD, the United Nations and the United States have set models for double taxation conventions. Most countries use these frameworks.