Almost four years after the referendum on Britain's exit from the European Union (EU), it finally left the EU on 1 February 2020, at 1.00 AM (Romanian time). As the withdrawal agreement between the United Kingdom and the EU was ratified by the European Parliament on 29 January 2020, there will be a transition period until 31 December 2020, during which European Union laws will continue to apply in the United Kingdom. Definitive agreements will be negotiated between the United Kingdom and the EU during this period. Negotiations with the EU are set to begin in March 2020 and from 1 January 2021, the UK will be treated as a third country.
UK's exit from the EU - International mobility and fiscal implications
After several postponements of the UK's exit date from the European Union, it eventually left the EU on 1 February 2020 at 1.00 AM (Romanian time).
An agreement was finally approved by both parties and ratified by the European Parliament on 29 January 2020, and thus there will be a transition period of 11 months, during which the UK will have to to apply EU law and the treaties concluded by it, but will be able to negotiate other definitive agreements.
Discussions on the relationship between the EU and the UK after the end of the transition period will start on 3 March 2020. The EU’s position in these negotiations is due to be adopted in February. According to the withdrawal agreement, if a free trade agreement is not concluded by the end of the transition period, the UK may request an extension of this period by 12 or 24 months. However any extension must be agreed by the UK and the EU by 1 July 2020. If a free trade agreement is finalized before 31 December 2020, the transition period may also be shortened.
During the transition period, the United Kingdom will be required to apply European Union law. Thus, there will be no major changes in the following areas:
After the transition period, in the absence of an agreement to continue the application of the above-mentioned directives (on the model of Switzerland and of the member states of the European Economic Area (EEA)), which would ensure that the payments of dividends, interest and royalties made by residents of the UK to EU/EEA/Swiss residents and vice versa would remain exempt from non-resident income tax, these will be taxed.
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