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Brexit – Impact on Irish businesses

Foreign Direct Investment (FDI) competition
Since the result, the UK has indicated their intention to reduce corporate tax rate to 15% and France has indicated incentivising their income tax regime to attract FDI.

Exchange rate volatility
Sterling has seen 31 year lows against the dollar and reductions against the euro since the result with continued fluctuations and market volatility.

Immigration rules change
There is no immediate change to the free movement of people into and out of the UK. The requirement for visas for existing and/or new EU employees will only be known at the end of the exit negotiations - anticipated to be a minimum of two years.

Lower competitive tax rates
The UK Chancellor has indicated an intention to reduce the UK’s corporate tax rate to 15%.

VAT rules will change
There is no immediate change to the movement of goods and services into and out of the UK with the likely introduction of excise duties and tariffs following the exit negotiations.

EU Directives will cease to have effect:

  • 1. Parent/Subsidiary Directive allows dividends between EU subsidiary and parent free of Dividend Withholding Tax (DWT); and
  • 2. Interest and Royalties Directive allows interest and royalties to be paid free of withholding taxes.

EU law no longer binding
Will there be possible retrospective effects and unfavourable European Court of Justice (ECJ) decisions ignored by the UK?

Movement of workers
Following exit negotiations EU nationals may no longer be able to enter or work in UK without a visa, this may also apply for Irish nationals living in the UK.

Trade corridor
Between Ireland and UK will need to be re-negotiated on EU terms.

We also included a Brexit timeline [ 220 kb ], which highlights the key dates you need to be aware of.