According to a briefing paper published by the UK House of Commons, the tax-related implications of the UK exiting the European Union mainly concern indirect taxation. The impact on indirect taxation is due to EU law that has established common rules regarding value added tax (VAT), which limits the UK's ability to set particular rates for various goods and services, as well as the ability to provide exemptions. Regarding other forms of taxation, the paper states that no such direct rules exist, although the overarching provisions of the Treaty for the Functioning of the EU, which provides for the free movement of goods, persons, services and capital across the single market and the prohibition of discrimination, would no longer apply for the UK. In addition, the UK would no longer need to comply with EU State aid rules.

One area the briefing paper overlooks is the benefits of the EU Parent-Subsidiary Directive and the Interest and Royalties Directive, which provide for withholding tax exemptions on dividends distributions and interest and royalty payments respectively. Such benefits would no longer be available to UK groups once the UK leaves the EU, although depending on how the exit is ultimately negotiated, certain benefits may be maintained.

Click the following link for the briefing paper on the UK parliament website.