Draft decision providing for transitional legislation in “no-deal Brexit” scenario

The Dutch State Secretary for Finance has published a draft decision providing for transitional legislation in the event of a “no-deal Brexit” involving the United Kingdom pulling out of the European Union without a withdrawal agreement having been reached. The decision in question provides for general approval of a selection of (national) tax laws to ensure that the Netherlands should continue to treat the United Kingdom as an EU Member State for the financial year 2019 where the latter is concurrent with the calendar year, or – where a split financial year applies – as long as the date of commencement of the financial year 2019 has predated the 30th of March. The general approval has been designed to address the following components of national legislation:

• the Income Tax Act 2001,
• the Payroll Tax Act 1964 (featuring an extended transitional period for existing cases only),
• the Salaries Tax and National Insurance Contributions (Reduced Remittances) Act,
• the Corporation Tax Act 1969,
• the State Taxes Act, and
• the various associated orders in council, ministerial regulations and policy decisions.

The draft decision in question also provides for specific endorsements in a Payroll Tax Act, Collection of State Taxes Act and private motor vehicle cum motorcycle tax context. The specific endorsement in the Payroll Tax Act sphere relates to the application of the so-called anonymous persons rate and the duty to provide proof of identity. As United Kingdom citizens and their family members will continue not to be regarded as “aliens” as per the Aliens Act for a period of up to 15 months of the UK’s exit date, they will not be needing a residency permit and work permit throughout this period to ensure that they should not be taxed at the anonymous persons rate.

The endorsement in the Collection of State Taxes Act sphere deals with payment deferral in relation to income tax and corporation tax assessments for the fiscal years up to and including 2019, whereas the specific endorsement relating to private motor vehicle cum motorcycle tax addresses exports of motor vehicles prior to 30 March 2019 where the vehicle in question goes on to be entered in the UK vehicle registration system within three months of the export date.

Dutch version: Conceptbesluit overgangsrecht Brexit zonder overeenkomst