The British Parliament voted on 20 December 2019 on a proposal on how the UK should leave the EU. The proposal is not yet formally British law but is expected to be rushed through when the Parliament reopens after the holidays in January 2020. The proposal passed the House of Commons on 9 January and is currently being processed in the House of Lords. The proposal means that the UK formally will leave the EU on 31 January 2020, provided the EU accepts the proposal.

From 1 February 2020 a transitional period will start, which will run until 31 December 2020. During the transitional period, EU-UK trade will in principle continue as before, while they will negotiate a trade agreement that can enter into force when the transitional period ends. An important part of the new proposal is that the UK cannot request an extension of the transitional period, if for example a trade agreement could not be reached before 31 December 2020. This means that the EU and the UK will have a short time frame of 11 months to reach an agreement. The UK Government is optimistic that a trade agreement can be reached in time while on the opposite side the EU seems to be of a more skeptical view as other trade agreements have taken considerably longer to negotiate.

Although even if the parties would reach a trade agreement that can enter into force in 2021, trade with the UK will be seen as export / import which may result in customs duties and other restrictions. It is therefore crucial to review the consequences Brexit will have for your company and the best way you can prepare yourself. We at KPMG have recently strengthened our team of specialists in customs and are happy to help and discuss how Brexit affects your company.

Read more:
The article in Swedish

Ulrika Badenfelt
Head of Trade & Customs KPMG Sweden
+46 72 368 85 80
ulrika.badenfelt@kpmg.se

Pavel Morawski
Indirect Tax
pavel.morawski@kpmg.se

Emmilie Welander
Trade & Customs 
+46 72 394 65 80
emmilie.welander@kpmg.se

Subscribe to TaxNews och other news from KPMG Sweden.