Politics and the European Tax Market
In recent years, it’s been hard to ignore the political changes going on across the globe. There have been a number of significant political events that have the ability to impact the tax market, both positively and negatively. Whilst the full impact of such events remains speculative, we are already witnessing the repercussion within the wider European Tax Market.
The ripple effect of Brexit
Back in 2017, we shared our insights on the predicted implications of Brexit on tax recruitment. Still, today, midway through 2018, the effect of Brexit on the UK tax job market remains muted. If some companies have pulled back from hiring in the UK, they have been replaced by others consolidating tax teams in the UK. Talks between the UK and EU has now moved on to the topic of Trade, currently under intense negotiations.
We have started to see evidence of the ripple effects of the UK’s decision to leave the EU, particularly in Ireland and Switzerland. Ireland has most to lose from a no-deal Brexit, so it is considering holding off tax cuts to its already heated economy while it waits to see what type of trade deal is agreed on.
The EU has never been happy with Switzerland’s settlement with the EU. Its unique approach to accessing parts of the single market through over 100 bilateral agreements has survived many challenges against the odds. But that bespoke arrangement is coming under increasing strain.
Switzerland’s President accused Brussels of practising “unacceptable” discrimination, intending to undermine the country’s role as a financial centre. The stand-off could result in the Swiss exchange losing the EU’s “equivalence” status, which allows cross-border financial markets trading. It is a dispute that has implications for Britain’s relationship with the bloc after Brexit. It seems the EU is taking a tough stance towards Switzerland as Brexit negotiations continue.
U.S. Tax Reform
As we unravel the complicated new rules of the current tax reform, it may be years before we fully understand the implications.
As the U.S. tax reforms currently stand, their implementation will mean the U.S. will re-enter international M&A, with a better ability to compete on deals that have previously eluded U.S. headquartered companies. Following its rollout, we expect that such reforms will lead to an increase in M&A volumes over the next 18–24 months.
If you have any queries on any of the above please contact Barrie Pallen for further information.
Barrie@bpasearch.co.uk / +44 20 3457 2625