Brexit and tax—the continued application of EU law

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Brexit and tax—the continued application of EU law
  • Background
  • Causes of action before 31 December 2020
  • Retained EU law
  • EU-derived domestic legislation
  • Direct EU legislation
  • Rights, powers, liabilities, obligations, restrictions, remedies and procedures
  • EU Directives
  • Direct effect and conforming construction
  • Conforming construction—pre-Brexit example
  • More...

Brexit and tax—the continued application of EU law

This Practice Note is about the extent to which EU law continues to apply to the UK’s tax rules (direct tax and VAT) following the end of the Brexit implementation period (IP) at 11pm on 31 December 2020. It covers the different types of retained EU law including EU legislation, the case law of the EU Court of Justice, general principles of EU law and EU fundamental freedoms, in each case as they apply to tax.

This Practice Note does not consider the EU’s State aid rules. For information on State aid and tax, see Practice Note: State aid law and corporate taxation.

Different rules apply in relation to the VAT treatment of the movement of goods in and out of Northern Ireland, and these too are not covered in this Practice Note. For information on these rules, see: Cross-border VAT—Overview—Goods—Northern Ireland.

Background

EU Member States are subject to the principle of the supremacy of EU law (see Practice Note: The supremacy of EU law). In the UK, the supremacy of EU law was secured by the European Communities Act 1972 (ECA 1972). This had far-reaching effects on UK tax law that took many years, or even decades, to be fully appreciated (see Practice Notes: Interaction of EU law and direct tax and VAT—European legal principles).

The UK ceased to be an

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