Breckith, increasingly impossible

As progress in the United Kingdom emerges from the European Union, the issue of the various scenarios is becoming more and more relevant, especially after recent events - the rejection of the deal negotiated by Theresa May, the parliament on January 15 and the no-confidence vote the next day.

What next?

Apparently, leaving the EU from the UK will not develop in accordance with the following scenarios: a comprehensive free trade agreement (CTA) of the kind of CETA that the EU has signed with Canada; a deep and comprehensive Free Trade Agreement (DCFTA), which was signed with the EU's peripheral countries, Ukraine, Moldova and Georgia; the two countries do not reach an agreement by the end of the deadline set for the end of 2020 and the relations between them are based solely on the provisions of the World Trade Organization, which is considered to be a firm Breckit with the most unpleasant consequences.

Shameful loss. The British Parliament rejected the agreement, with an overwhelming majority of 432 MPs and a difference of 230 votes - an unprecedented loss of government throughout the history of the state. Shameful loss.

There is a likelihood that Article 50 will be extended so as not to get the worst - Brexit without a deal, and Teresa May to gain extra time to reach new arrangements. There is no guarantee, however, that the EU will hesitate. And if he still agrees, what can he follow? Will other countries not want to take advantage of the right to enjoy the benefits of Europe without being members of the European Union?

Negotiating the conditions for leaving? It is not very likely, given that EU countries do not intend to make more concessions.

Reversing the process? This means May's government unilaterally withdrew its request to leave the EU. This option is extremely unlikely given its huge political cost.

New elections? It is possible if Theresa May provoked them. She won the vote of no confidence in the government the day after the rejection of her deal by parliament. The Labor Party was the initiator of the vote, and the vote was close - the government survived by 19 votes, a minimal difference but enough to remain in power.

New referendum? So far, Mae has denied such an opportunity, but given its unstable political position and the Conservative Party's doubts about its leadership, such an event is quite likely. Above all, opposition leader Jeremy Corbin, who initially firmly rejected the possibility of a second vote, has already changed his mind. And there is a strong public pressure and this scenario is becoming more and more probable with every new day. It is also important if Parliament votes for a legislative decision to ban the possibility for the UK to leave the EU without a deal.

Why do the British not like the deal with the EU?

An important issue to be solved with the EU-UK agreement is the border between the Republic of Ireland and Northern Ireland. By the Good Friday agreement of 1998, it was decided to abolish the border between the two parts of the Irish island, which was only a fact in 2005. However, with Brexit, the border should be restored as the Republic of Ireland stays in the EU while Northern Ireland as part of the United Kingdom will be considered as a non-EU territory. In order to resolve this problem, which will not only create economic but also political turmoil, the EU-UK withdrawal agreement provides that:

1. Is it possible for a new warfare conflict, linked to the newly-established border of Northern Ireland

1. Northern Ireland remains permanent in the single market.

2. The rest of the United Kingdom, namely England, Scotland and Wales, remains in the single market until the end of the transitional period expiring on 31 December 2020.

3. In the event that England, Scotland and Wales decide to extend the transitional period, the UK Government must apply for such an extension six months before the expiration of that period. The decision must be taken by a bilateral commission between the EU and the UK. Should such an agreement not be reached, Britain will leave the single market on 31.12.2020.

4. After leaving the single market, Britain must remain in the customs union and continue to apply the EU's common customs policy.

There are many clauses in the EU exit agreement that worry the various actors on the political arena in the UK.

Brexit supporters can not accept that the kingdom will have to apply EU law during the transition period. It is completely unacceptable for them to remain in the customs union after the transition period.

On the other hand, adherents in the EU do not agree with the deal, insisting that it does not match the vote of those who voted in the referendum. They state readiness to cause the process to be reversed.

For the coalition partners of the Northern Ireland Conservative Party, the Democratic Unionist Party of Northern Ireland, the division of Northern Ireland from the rest of the United Kingdom is a national treachery.

Scottish politicians who want Scotland to stay in the EU are dissatisfied with the fact that Northern Ireland will be in a more privileged position than Scotland in terms of its trade relations with the Union.

It is clear why the political situation in the United Kingdom has deteriorated considerably in recent days, and the most reasonable scenario is the extension of Article 50.

EU Chief Negotiator Michel Barnier proposed another option to unblock the situation. The extension of the transitional period until December 2022 is envisaged. Thus, EU Member States are not ready to renegotiate the agreement reached, and that compromise options may be sought for an extension of the transitional period. This, however, does not solve the above problems in any way, but, on the contrary, it exacerbates them, because it postpones the actual Brexit too far in time.

Beyond the scenarios

Brexit is a first-of-its-kind event that makes it almost impossible to make accurate economic forecasts. It represents a huge political and economic shock for the European Union and increases uncertainty for the EU as a whole, not just for the United Kingdom, which can weaken the EU's ability to attract investment and even repel potential investors. It can also have serious negative consequences for the financial systems of the entire euro area. On the other hand, many investors saw the UK as a transit hub for their investments in the rest of the EU, which will no doubt now change.

The Commission has made a major change to the VAT system

The tax will already be paid in the country where the item is sold. The European Commission is preparing the biggest changes in value-added tax for a quarter of a century. VAT is also proposed for cross-border trade in the European Union (EU) and companies will be able to submit one-stop-shop declarations via an online portal in their own language.

"Twenty-five years after the creation of the single market, companies and consumers still face 28 different VAT regimes in cross-border operations. Criminals and possibly terrorists have long used these omissions by organizing fraud, "said Economic and Financial Affairs, Taxation and Customs Commissioner Pierre Moscovis.

"This anachronistic system based on national borders must end. Member States should consider cross-border VAT transactions as domestic operations on our domestic market by 2022. This will make life easier for EU companies doing cross-border trade, reduce bureaucracy and simplify VAT procedures, "the EU commissioner . Four amendments are proposed to enter into force as from 2019. These measures are explicitly requested by Member States to improve the day-to-day operation of the current VAT system until the final regime is fully negotiated and implemented.

They include:Tackling fraud: VAT will be charged on cross-border trade between businesses. This kind of trade is currently exempt from VAT, providing a simple loophole for unscrupulous companies to collect VAT and then disappear without transferring government money.

One-way shop: For companies that sell across borders, it will be easier to handle their VAT obligations through a one-stop shop. Merchants will be able to make declarations and payments using a single online portal in their own language and according to the same rules and administrative templates as in their home country. Next, Member States will pay directly to VAT, as is true for all sales of electronic services. Greater consistency: a transition to the 'destination' principle, where the final VAT is always paid to the Member State of the final consumer and is charged at the rate of that Member State. This is a long-standing commitment of the European Commission, supported by the Member States. It is already in force for the sale of electronic services.Less bureaucracy: simplification of billing rules, which allows vendors to draw invoices according to their own country rules, even when doing cross-border trading. Companies will no longer need to produce a list of cross-border transactions for their tax authorities (the so-called Recapitulative Statement). Today's proposal also introduces the notion of "certified taxable person" - a category of trusted business that will benefit from much simpler and time-saving rules. Four "quick fixes" were also proposed to enter into force by 2019. These short-term measures were explicitly requested by the Member States to improve the day-to-day operation of the current VAT system until the definitive regime has been fully negotiated and implemented. According to the EC estimates, over € 150 billion of VAT is lost each year, meaning that Member States omit revenue that could be used for schools, roads and healthcare. Of these, around € 50 billion - or € 100 per EU citizen each year - is expected to be due to cross-border VAT fraud. This money can be used to fund criminal organizations, including terrorism. It is estimated that this amount will be reduced by 80% thanks to the proposed reform.

Amazon has to return 250 million euros to Luxembourg

The Commission did not fine the company, but ordered it to return about 250m euros to Luxembourg, as well as interest. The European Commission (EC) said the US online merchant Amazon has received tax breaks from Luxembourg for a total of about 250 m euros. According to the European Union rules on state aid, this is illegal and the country is told that the sum should be reimbursed, writes Engadget. Amazon has agreed to pay the simplified taxes to interest. Jeff Bezos's company has managed to pay considerably less taxes. "Following an in-depth investigation commenced in October 2014, the Commission found that a tax decision issued by Luxembourg in 2003 and extended in 2011 has lowered the tax paid by Amazon there without any valid justification", commented EU Commissioner Margrete Vestagger.

Although the Commission does not fine Amazon, it has ordered the company to reimburse the simplified amount "in order to eliminate the distortion of competition created by the aid provided". The Commission has calculated the difference between what the company has paid and what Amazon actually owes to Luxembourg. The amount is about 250 million euros ($ 294 million), and the interest is also due. The Tax Administration of the Kingdom is obliged to determine the exact amount of unpaid tax. Recall that at the end of June this year, the EC fined another major US technology company - Google - 

with EUR 2.42 billion after a seven-year investigation of allegations that the technology giant has abused the monopoly used in internet search. The fine remains the largest imposed so far by the EU executive. 

Today, the EC has announced that the European Court will consider another case related to tax concessions granted by states to large companies. This is the technology giant Apple, which has received preferences from Ireland, and has thus managed to avoid tax payments of 13 billion euros.

The EU is considering banning the withdrawal of deposits from troubled banks

The European Union is considering measures to temporarily suspend the withdrawal of deposits from troubled banks, Reuters reported, referring to a draft document. The proposal aims to help rescue banks that are doomed or those that are likely to go bankrupt. Critics of the proposal, however, point out that it may undermine the credibility or even encourage the withdrawal of deposits if rumors spread to an institution that it is in poor condition. The proposal, which has been under consideration since the beginning of the year, has come to light less than two months after the Spanish Banco Popular has been the subject of massive withdrawal of deposits, which has contributed to its collapse. The project also comes amid the debates in individual European countries about how to deal with troubled banks around a decade after the start of the financial crisis that the European Central Bank has had to print billions of euros to cope with a prolonged economic downturn. The power to temporarily block the withdrawal of deposits is a "viable option". This is Estonia's position on the case, which is currently the EU's rotating president, which shows that individual countries have different positions on the case. Countries like Germany, where there is a similar option at national level, support such a pan-European measure.  "We want to prevent bankrupt banks from going bankrupt," an anonymous German government official told Reuters.

"We strongly believe that this will prevent depositors from withdrawing money early," said Charlie Banister of the Association for Financial Markets in Europe (AFME) lobbying group. The Estonian proposal was discussed on July 13, but no decision was taken, Brussels told the agency. It is expected that the discussions will continue in September. The text can not enter into force without the consent of the European Parliament. If it is accepted, the document will run counter to the November European Commission proposal to strengthen the powers of national supervisors in cases of mass withdrawals. However, it provides for exclusion from the general rule of guaranteed deposits, ie up to 100,000 euros. The Estonian proposal provides for the withdrawal to be blocked within five days and extended to a maximum of 20 working days in exceptional circumstances.

The current rules within the EU allow a two-day denial of payment in banks in a bad state, but they exclude deposits. Many countries are in favor of stopping payments from supervised banks, but at that time the Bank's other activities continue to run. Most countries are opposed to so severe restrictions when it comes to knowing that a bank is experiencing difficulties, Reuters notes.