So the UK is ready to leave the EU, but are you ready for it? As you can imagine, your ERP system will require some tweaks, and your compliance tool - or process – will need to be updated.
Should you start to panic? The answer is no. Simply put, the process is not instantaneous, it occurs in stages, and these stages will be spread over the course of years – not days, weeks or months. A country exiting the EU is very much like a country entering the EU, but then the other way around.
What to expect?
Firstly, EU member rights will automatically expire, the UK will be regarded as non EU and current treaties will cease to exist. New treaties will be formed and will inevitability have to deal with the issue of Tax. As a result of leaving, the UK will have independence and the ability to change taxation processes as they see fit, unbound from EU principles.
Any UK firm trading in the EU, will have to comply with EU rules that are applicable to Non EU companies, and EU firms trading in the UK will have to satisfy a UK regime. No more intra-community supplies from and to the UK, it will all be export and import. But there is more. Think about appointing fiscal representatives in certain EU countries, the impact on licenses and potential additional VAT registrations.
What will this mean for your ERP system and Compliance processes?
The main focus will be on country settings in your ERP: master data, tax procedures, tax codes and tax accounts. Essentially, your tax determination model will need to be reviewed, regardless of how your system is configured. Aside from your ERP system, it may be wise to consider if your business and/or compliance processes call for adjustments. Intrastat and EU sales listings will go, but those are the devils you know, we will have to wait and see what the UK will want in return.
Nevertheless, whatever changes lie ahead, we at Tytho are ready for it! Stay tuned for further developments.