Brexit –The Global Business Impact
When the 5th largest economy in the World leaves the EU, it definitely will reflect on all others.
While UK slowly starts Brexit processes, the impact on UK, the rest EU countries and least but not last – on each 3rd country is definitely noticeable.
The main obstacle which Brexit will accrue to UK and to the other EU members is the European Union single market access which allows the free movement of goods, services, money and people within the European Union.
Exactly the free movement of goods and services, migration and regulation are the three critical areas affected by Brexit, outlining the possible tax implications for international businesses.
All free trade movements between UK and other European countries will be seriously affected by the additional VAT charges and custom duties on all exported and imported goods.
With all these new rules and facing this new reality we have to adapt and rearrange our industry and our client’s business approach. Most probably, many UK businesses will try to find a proper and legitimate way to avoid the additional tax charges and custom duties inducted by Brexit and many EU countries will do their best to attract UK businesses to repatriate their business activities abroad.
Along with the access to the European Union single market, East European countries might offer a lot of opportunities to the UK business – low taxation, less bureaucracy and low business costs
Having said that, Bulgaria (EU Member since 2007) – benefits from the lowest taxation not only among EU, but the lowest taxation – comparing with the rest of East European countries , to run a Bulgarian company, would be very attractive.
Setting up either a sole Bulgarian entity or as a part of international structure may dramatically decrease the global tax burden of a UK entrepreneur. Whilst still remaining in full compliance with the new EU and Global regulations.
Tax payers in Bulgaria benefit from:
- Corporate Profit Tax (Flat) 10%
- VAT within the EU 0%
- Dividend Tax within the EU 0%
- Dividend Tax Third countries (Flat) 5%
- Double taxation avoidance treaties with 80 countries, including UK.
Bulgaria is also perfectly positioned as a trade bridge between Europe and Asia and has a particularly beneficial tax environment on all trading income.