How Brexit impacts tax deducted at source
Tax Deducted at Source after Brexit

How Brexit impacts tax deducted at source


At the time of writing, we are yet unaware of how Brexit will play out. Whether it will be a hard Brexit with Britain crashing out of the EU, or whether an agreement will be reached, is yet to be revealed. However, we are already now rather aware of how international investments will be impacted in terms of double taxation.

No investor like uncertainty, and if Brexit brings anything to the table, it is, you guessed it, uncertainty. But, hopefully our unawareness will stay at how United Kingdom’s leaving of the EU will impact companies and their stocks.

Taxes are, as is well know, the only thing in life that is certain (as is death). But with Brexit, will this have any impact on your taxation as an investor?

One could guess that, with United Kingdom leaving the European collaboration, whether in a hard Brexit or in an orderly fashion, this could impact certain agreements and multilateral arrangements between the United Kingdom and the remaining 27 member states.

However, for many investors’ joy, Brexit does not have any impact on your double taxation relief derived from each country’s bilateral tax treaty with the United Kingdom.

A tax treaty is, by its nature, a bilateral treaty between two agreeing countries. They are negotiated and agreed between the two countries that are party to the agreement, without the involvement of any other national or supranational instances.

Even if there is much cooperation within the EU with respect to tax, double taxation is not one of the items covered.

This means that all tax treaties with the United Kingdom will remain in place even after Brexit, and your taxes on investments will be treated as they have until this date. So even if the Brits are stepping back from cross-border trade and investing, you as an individual investor, regardless if your British or from the mainland of Europe, can proceed as always with your international investments, knowing your international taxes won’t change.

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