1. Risk of reintroduction of customs duties and VAT - It is possible that Brexit will result in the imposition of customs procedures and duties and VAT on imports and exports between the UK and EU Member States. This would have a particularly serious impact on Ireland given that the Irish/Northern Irish border would become the only land border between the EU and the UK and given the high level of trade between Ireland and the UK. The increased costs and administrative burden of doing business with the UK would be likely to increase the cost of goods and have a negative impact on overall Irish/UK trade as well as having potentially negative economic and political effects on the border region.
  2. Risk of increased pressure on Ireland to accede to closer harmonisation on tax matters, in particular, the Common Consolidated Corporate Tax Base (CCCTB) - Both Ireland and the UK have been opposed to closer harmonisation on tax matters. After Brexit, Ireland will lose an important ally at the EU negotiating table, leaving us more isolated on our stance against harmonisation on tax matters. This could accelerate the possibility of the introduction of a mandatory CCCTB for all EU Member States.
  3. Risk of damage to competitiveness of Irish businesses trading in the UK - When the UK leaves the EU, the UK will no longer be obliged to comply with EU State aid rules and it will be free to offer tax and non-tax incentives to UK based businesses. The ability of the UK to favour domestic businesses over non-UK businesses could have an adverse impact on Irish businesses operating in the UK, Ireland's largest trading partner.
  4. Risk of loss of EU based tax measures - Various EU Directives grant tax exemptions and reliefs such as for group re-organisations/transactions (e.g. the Parent-Subsidiary Directive and the Interest and Royalty Directive). When the UK leaves the EU, subsidiaries based in EU Member States would not be able to rely on these Directives to make payments to their UK holding companies free from withholding taxes. However, this risk is comparatively low because Ireland and the UK are party to a comprehensive double tax treaty.
  5. Divergence from EU case law on tax matters - The Courts of Justice of the European Union have struck down a number of UK tax laws which were found to be contrary to EU law. The UK would be in a position to re-introduce these laws following Brexit (for example, the VAT treatment of various services, controlled foreign company provisions and the taxation of dividends from EU companies).