Some multinationals are likely to look at moving their headquarters out of Britain to avoid higher tax bills following Brexit, experts say.
Clifford Chance, a law firm, said companies with big European operations that expect to be hit by new withholding taxes “may need to consider taking radical measures”.
It said: “It may be that the only way to maintain the benefits of being an EU- headquartered group would be to shift the parent company and headquarters from the UK to another EU member state.”
Tax experts also warned that Brexit would have a big impact on indirect tax, as VAT would be paid when goods were traded across a border between the EU and the UK. Even though the VAT would often be recoverable, there would be cash flow costs.
Richard Asquith, VAT expert at Avalara, a tax software company, said since Friday he had been asked to offer advice to US and Chinese importers that had EU distribution centres in the UK. The prospect of extra paperwork and cash flow pressures was prompting them to consider moving to countries such as the Netherlands and Belgium.
“We are getting lots of requests from clients asking for advice on how to restructure UK out of EU VAT supply chains. It is a little premature, but indicates the level of concern and recalibration that has been unleashed.”
Source: Financial Times
Read complete article: https://next.ft.com/content/5a3b0bec-3ba4-11e6-8716-a4a71e8140b0