As expected, the UK EU Trade and Cooperation Agreement (“TCA”) does not contain any measures constraining the UK’s domestic tax regime or its tax rates which were largely always a matter for the UK to determine. See last month’s update on VAT and social security in the Brexit digest of 13 January.

However, the TCA does commit both the UK and the EU to uphold global standards on tax transparency and fighting tax avoidance. It also contains commitments to specific tax standards as they stand at the end of the transition period, including the international standards on exchange of information and anti-tax avoidance.

The commitments on tax are also captured in a stand-alone Joint Political Declaration on Countering Harmful Tax Regimes (here) with a continued commitment to BEPS (Base Erosion and Profit Shifting) actions. This declaration is aimed at being a political commitment to the principles of countering harmful tax regimes and reflects the work done by the OECD in this area.

It should also be noted that the UK no longer is a participant in the EU Arbitration Convention governing tax disputes.