The Trade and Cooperation Agreement (TCA) between the UK and the EU, which took effect on 1 January 2021, dedicates an entire chapter to digital trade arrangements, such as the supply of goods and services through online channels. This is the first time an EU trade agreement has included a specific chapter of this nature and marks the importance of digital trade between the two jurisdictions. But how much will it really impact UK-based tech businesses?
The TCA provisions relating to digital trade have the stated objectives of addressing "unjustified barriers to trade enabled by electronic means" and ensuring an "open, secure and trustworthy online environment for businesses and consumers". Subject to various exceptions (discussed further below), the UK and the EU make commitments in the following areas:
- not to impose customs duties or tariffs on electronic transmissions (such as software) provided in its territory;
- to adopt a broad definition of "computer-related services" (see discussion below)
- not require businesses to obtain prior authorisation for any services purely because they are provided by electronic means;
- not require the forced transfer of source code as a prerequisite to doing business in its territory;