Brexit, a view from the UK
Daniel Sladen, partner of PKF Francis Clark, gives a current overview of the effects and expectations of the exit from the EU
Following the referendum in 2016, the UK was expected to leave the European Union in March 2019. It hasn’t quite gone to plan. Having failed in three attempts to obtain our Parliament’s support for her proposed Brexit deal, Prime Minister Theresa May has just resigned. Her Conservative party is expected to elect a new leader by the end of July, but until this new Prime Minister is in post it’s difficult to see any progress being made in negotiations on the UK’s exit arrangements and future relationship with the EU. Despite this, the UK is now due to leave on 31 October, leaving little time for serious negotiations to take place.
It’s been a difficult three years for businesses who ship goods between the UK and the rest of the EU, with continuing uncertainty about what form Brexit will take. The central problem is that the UK is seeking greater independence from the rules of the EU institutions without wanting to give up the benefits that membership brings. This paradox is particularly visible when looking at tariff and non-tariff barriers to cross-border movement of goods: for example the UK is still looking for ways to diverge on product standards while not wanting any kind of border checks which could disrupt ports and cause damage to just-in-time supply chains.
Although the impact of new trade barriers will be much less significant for businesses in other member states, the lack of any certainty about the rules for importing from and exporting to the UK from 1 November onwards will still have a material impact on many firms’ business plans.
So what will happen next? The short answer is that nobody knows. It seems increasingly unlikely that an exit without a deal will be allowed by either the EU or the British Parliament, but there is also no particular deal that Parliament will support. The situation is made more complicated by the internal politics of the Conservative Party, with leadership hopefuls queueing up to sound more Eurosceptic than their rivals - although the successful candidate will have to deal with the same parliamentary arithmetic and the same EU position as Mrs May faced. All in all it seems to be a recipe for further delay and uncertainty and the only advice we can offer businesses is to maintain flexibility to deal with whatever outcome finally emerges from the political process, whether that is a deal, more delay, or eventually an abandonment of the whole Brexit project.
Daniel Sladen is a tax partner at the PKF member firm Francis Clark, based in the coastal region of Cornwall in the south west of England. He leads the firm’s international tax practice and frequently advises clients on restructuring to mitigate the effects of Brexit
Holding Company: The Revenue Agency expands the audience of those required for “specific communications”
PKF Studio TCL clarifies the new criteria of prevalence that extend the number of holding companies obliged to communicate with the Revenue Agency and the tax registry.
Legislative Decree 142/2018 has seen an extension of the reporting obligations of the Holdings towards the Revenue and Tax Register Agency
It should be pointed out that holding companies differ between “financial holding companies” which are mainly engaged in participation activities of financial intermediaries and “non-financial holding companies” which carry out mainly participation activities in non-financial companies.
The first, defined as financial holding companies, are those for which the total of the assets resulting from the last approved balance sheet consists of more than 50% of participation activities in financial intermediaries and other assets of a nature related financial statements of the investees; whereas the latter, defined as industrial or mixed holding companies, are those for which the total of the holdings in non financial intermediaries and other capital items related to the participation exceeds 50% of the assets. The new prevalence criterion therefore assumes exclusively the total assets resulting from the 2018 budget duly approved, as clarified by the new Article 162 of the Act.
The number of companies covered by this definition, which cover a wide range of industrial sectors, is consequently increased.
Before the holding companies which, in addition to the requirement “patrimonial”, also met the requirement “economic” (the income from the acquisition of shares in industrial companies had to be more than 50% of the total income for two consecutive years).
The failure of the second requirement greatly increases the number of companies required to comply.
Basically, they are also extended to non-financial holding companies that meet the above capital predominance criterion, the monthly reporting requirements to the tax registry of the financial reports held in the course of their business, and the obligations to comply with the requests made by the Financial Administration pursuant to art 32 of dpr 600/73 and ex art 52 of DPR 633 /72.
Finally, it should be noted that the failure to comply with the above obligations causes the application by the Financial Administration of financial penalties which may vary up to a maximum of EUR 20.658.
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PKF Studio TCL – Genova Milano – www.studiotcl.com