Brexit and its tax context still a big question

The United Kingdom's withdrawal from the European Union will of course have an impact on many tax areas, either business entities or citizens. The impact on the Czech tax area can be assessed only when it is clear if there is a deal on Brexit and a certain transient period or if there is a hard Brexit. Apart from changes in the regime of mutual trading regarding customs and value added tax, entrepreneurs in particular will have to consider the impact on income tax, such as the potential duty to apply withdrawal tax or guarantee of taxes when providing various payments to British subjects. In such cases, the double taxation treaty concluded with the UK will be relevant. Citizens from both countries having income in the other country or having activities in its area can lose certain tax advantages after Brexit, and they would need to solve questions regarding their social security and payments of insurance.

The government prepared a bill that should adjust some of the impact from a hard Brexit during a transient period until the end of 2020, and the bill is now waiting to be debated in the Senate. From the above-mentioned areas, the bill deals only with some questions regarding income tax, but it does not give many unambiguous answers. The adjustments in the bill do not cover the issue of jurisdiction of employees with respect to social security, with the exemption of the issue of entitlement to unemployment allowance.