29 01 2018

Dutch Firms Face Substantial Brexit-Related Tax Costs: KPMG

The Government of the Netherlands has warned Dutch companies trading with the United Kingdom that they will face "high costs" if the UK leaves the European Union without a deal.

According to research conducted by KPMG on behalf of two Dutch ministries, import and export costs will increase by between EUR387m (USD473m) and EUR627m annually, excluding customs duties, additional value-added tax costs, and expenses related to sector-specific market entry requirements, which are at present unknown.

The Government said that based on figures from 2016, businesses will have to make 752,000 additional import declarations and 4.2 million additional export declarations if Brexit takes place without a deal. It estimated that additional costs stemming from new customs formalities would range from EUR78.20 to EUR126.70 per shipment.

The study does not take into account additional tax-related costs, but these could also rise if bilateral trade is subject to new trade tariffs or additional VAT compliance requirements.

Despite the fact that the outcome of Brexit negotiations remains unknown, the Government has urged businesses to prepare for the possibility of additional costs.

"Brexit will have major economic consequences, as confirmed by this study, so I advise business owners to start preparing in good time," said Mona Keijzer, State Secretary for Economic Affairs and Climate Policy.

"The Government is eager to help, but entrepreneurs will have to do the most important work themselves," she added.