Brexit: Companies require legal certainty

Companies require legal certainty. Move to or stay in the UK today could be a leap of faith.

Great Britain won’t be a new tax haven.

After Brexit, companies are facing great uncertainty. It seems that Great Britain does not intend to make use of any available schemes and therefore a lack of clear rules and limitations over the next two years may cause confusion. It is apparent that companies cannot operate in an uncertain climate and therefore they might decide to opt for countries with a definite set of rules, though with less favourable tax rates.

It is highly unlikely that, at the end of this process, Great Britain would became a tax haven. Tax rates may fall from 20% to 17% by 2020, but it is anyone's guess what may happen in the future. In any case, we are still talking about a level of taxation higher than that of other “competitors” like Ireland.

The UK premier has to calculate accurately the economic impact of this decision. The government capability of attracting investments is of the essence. Today, we are witnessing to the opposite trend: Uncertainty is driving large corporations and multinationals’ decision to leave the country. OECD activities should help balance the situation providing basic standards member countries must abide by, as it is the case of the BEPS project for multinational taxation. Although these standards won’t ever be a replacement for EU rules, they could still be of help.