We communicate with you to inform you about the latest developments of the ECB/EU/IMF troika financial assistance to Cyprus. Last Saturday the Eurogroup decided in favour of a financial assistance to be provided to Cyprus with a package of measures which include:
• an one off solidarity levy on bank deposits and credit balances of 6,75% for amounts of up to €100.000 and of 9,99% for amounts exceeding €100.000. This levy will apply to all bank accounts (current, deposit, notice etc.) with banks operating in Cyprus (local and international) and bank branches. Depositors will be compensated with the equivalent amount in shares in Cyprus banks, and a plan is being contemplated for those who will keep their deposits in Cypriot banks for the next two years to be given bonds linked to revenues from natural gas; and
• an increase of corporate tax rate from 10% to 12,5%.
The upside of Saturday’s Eurogroup decision is that the uncertainty over the Cyprus economy and the future of its major banks will disappear with the financial assistance agreement. The EU and the IMF have also confirmed that these measures will ensure that the Cyprus economy will be sustainable without any further support or measures.
As a firm, we believe that:
• the increase of the corporate tax rate by 2,5% will not negatively affect international business in any significant way as corporation tax affects mainly trading income. Most international companies in Cyprus are set up as investment holding companies or group financing companies. Cyprus companies will still benefit from full participation exemption on capital gains, full participation exemption on dividend income, no Cypriot withholding tax on dividends, interest and royalties, no thin cap rules, no CFC rules, no exit charges, effective tax on royalty income of 2,5% (from 2%), interest income being taxed on thin margin only and all the other current positives of the Cyprus tax regime. In addition, even with this corporation tax increase, Cyprus remains one of the lowest corporation tax jurisdictions in the EU.
• the imposition of the one off solidarity levy on bank deposits and credit balances in the Cypriot banking system is unacceptable as such a measure is unprecedented and undermines the European banking system. Shares in banks on major international stock exchanges took a pummelling on Monday (yesterday) as a result of the dangerous precedent that has been set.
The Eurogroup decision needs to be ratified by the Cyprus House of Representatives to be effective. The decision with respect to the levy on deposits has sparked huge public anger in Cyprus and beyond and it is currently questionable if the House of Parliament will ratify it – the Parliament is expected to hold a special session for this today at 6pm Cyprus time.
We shall keep you informed of developments on this important issue. Please feel free to contact us for further information, assistance or clarifications.
- Cyprus Wins Exemption for Small Savers from Bank Levy (marketcurator.com)
- Bailout terms ‘death knell’ for Cypriot finance sector (ekathimerini.com)
- A look at Cyprus’ move to seize bank deposits (seattlepi.com)
- Eurogroup agrees to allow Cyprus to tweak deposit tax as long as agreed target is met (ekathimerini.com)
- Cyprus depositors face up to 10% haircut as part of bailout deal agreed at Eurogroup (ekathimerini.com)
- Cyprus seeks to alleviate pain from deposit raid (cbc.ca)
- Complete Eurogroup Statement On Cyprus (zerohedge.com)
In the above PDF, Baker Tilly Poland kindly share some of the news surrounding the new VAT and income tax changes in Poland that anyone investing or living in this country needs to be aware of.
|TAX ALERT | SLOVAKIA
|The most significant changes to the taxation of individuals from the start of year 2013:1. Personal tax allowances for spouse– From 1st January 2013, the spouse allowance is possible to apply only if the spouse living with taxpayer in common household is:
- taking care of a dependent child, or
- receiving a cash allowance for nursing, or
- unemployment registered and is actively seeking a job, or
- considered a disabled individual or a severely disabled individual.2. Tax allowance related to voluntary contributions to II. pillar – until the 31st December 2016 taxpayers may apply as a tax allowance the amount of voluntary contributions to pension, this amount is 2% of the taxpayer´s tax bases from active income, i.e. income from employment and from business. This amount should not exceed 2% of 60-times average monthly salary reported by Statistics Office of the SR two years previously.
3. Tax bonus – the tax bonus should be apply only by taxpayer, who in the period reached 6 times the minimum wage only from active income, i.e. income from employment and from business. The tax bonus should not be applied by taxpayers who earn only rental income.
4. The lump-sum expenses from business income – changes in the implementation of lump-sum expenses in 2013:
821 08 Bratislava
Tel: +421 250 203 302
Head of Accounting Department
Slovak Tax Advisor
821 08 Bratislava
Tel: +421 250 203 304
|Disclaimer: The information contained in this material is general and does not provide a comprehensive analysis of these topics. Despite the fact that we try to ensure the timeliness and accuracy of the information contained in this material, we cannot guarantee that it will still be valid on the date it is read. Therefore users of this information should not base any business or investment decisions on it without first discussing the matter with a professional advisor. Our initial consultation is free.Privacy & Disclaimer Feedback
Baker Tilly Slovakia Accounting s.r.o. and Baker Tilly Slovakia Audit s.r.o. are independent member firms of Baker Tilly International which is the world’s 8th largest accountancy and business advisory network by combined fee income of its independent members. Baker Tilly International member firms specialise in providing accountancy and business advisory services to entrepreneurial, growing businesses and mid-market corporates worldwide.
- Sky High in Slovakia – Latest News, Features, and Reviews (automobilemag.com)
- Slovakia, Tajikistan to sign agreement on encouragement and mutual protection of investments (en.trend.az)
There’s a lot going on in all our region with taxes at the turn of the year. Below Baker Tilly Slovakia have been kind enough to share their update on some of the key issues undergoing change. As always on these pages, the updates provided are subject to the usual caveats and these are on the page on this site marked disclaimers.
Parliament has approved the governmental Amendment to the Income Tax Act effective from 1st January 2013. The most significant changes resulting from the amendment are as follows:
1. Personal income tax
Personal income will be taxed at two tax rates depending on the amount of the income of the tax payer. A tax base of up to 176,8 times the subsistence minimum (for the year 2013 it is the amount 34.401,75€) will be taxed at a 19% tax rate, while a tax base exceeding this amount will be taxed at a 25% tax rate.
The threshold for payment of advance tax has also been increased from 1.659,70€ to 2.500€.
2. Corporate income tax
From 1st January the corporate income tax rate has been increased from 19% to 23%. Following the change of tax rate, corporate income tax advances paid for periods from January 2013 should be re-calculated with the 23% tax rate.
3. Extension of tax return filing deadline
The deadline for filing tax returns will be extended only for taxpayers whose income includes income from a foreign source. The deadline will be extended by 3 calendar months on the basis of a written notification delivered to the tax authority before the usual deadline for filing tax returns.
For taxpayers whose tax period is a financial year starting in 2012 and ending in 2013, the tax base to be decreased by any tax losses will be distributed proportionally based on the number of months in the tax period up to 31.12.2012 (taxed at the 19% rate) and the number of months in the tax period after 31.12.2012 (taxed at the 23% rate).
4. Tax assignation by legal entities
A legal entity liable to pay corporate income tax will be able to assign 2% of paid tax to entitled beneficiaries (not-for-profit organizations, civil associations, etc.), provided that during the term for filing of the tax return such entity makes a donation equal to at least 0,5% of the tax paid. In other cases, the legal entities will only be able to assign 1,5% of any tax paid.
821 08 Bratislava
Tel: +421 250 203 302
Head of Accounting Department
Slovak Tax Advisor
821 08 Bratislava
Tel: +421 250 203 304
- TurboTax – A Global Look at Personal Income Taxes Interactive Infographic (turbotax.intuit.com)
- Meet Five CEOs Who Prove That Lower Corporate Taxes Don’t Equal More Hiring (thenation.com)
- Why more and more businesses are being taxed like people (washingtonpost.com)
|Tisztelt Hölgyem/Uram,A Baker Tilly Hungária megjelentette legújabb „Business & Tax Newsletter” című kiadványát,melyet a következő linkre kattintva tekinthet meg: Newsletter 1/2013
Hírlevelünk témája a Társasági és cégeljárási törvénnyel kapcsolatos aktuális kötelezettségek
Hírlevelünk Acrobat Reader szoftverrel olvasható, mely ingyenesen letölthető a következő helyről:
Amennyiben hírlevelünket hasznosnak találja, és szeretné, hogy mások is megkapják, vagy a jövőben
nem szeretné, hogy hírlevelünket megküldjük Önnek, akkor kérjük, ezt a newsletter
címre küldött e-mail-ben jelezze.
|Dear Sir / Madam,Baker Tilly Hungária issued its latest „Business &Tax Newsletter”which can be accessed by clicking on the following link: Newsletter 1/2013
The actual topic covered therein is the obligations related to the act on business associations and company administration
Our newsletter can be read with Acrobat Reader which is downloadable by clicking on the following link:
If you found our newsletter useful and would like to include anyone else on, or would like to remove
your e-mail address from our mailing list, please notify us at newsletter.
Üdvözlettel / Best regards,
Baker Tilly Hungária
an independent member of Baker Tilly International
Address: H-1124 Budapest, Jagelló út 14., Hungary
phone.: +36 1 225 34 90
fax: +36 1 225 34 91
e-mail: newsletter; info
|Baker Tilly is a trademark of the UK firm Baker Tilly UK Group LLP, used under licence.Baker Tilly Hungária is an independent member of Baker Tilly International. Baker Tilly International Limited is an English Company. Baker Tilly International provides no professional services to clients. Each member firm is a separate and independent legal entity and each describes itself as such. Baker Tilly Hungária is not Baker Tilly International’s agent and does not have authority to bind Baker Tilly International or act on Baker Tilly International’s behalf. None of Baker Tilly International, Baker Tilly Hungária, nor any of the other independent member firms of Baker Tilly International has any liability for each other’s acts or omissions. In addition, neither Baker Tilly International nor any other member firm has a right to exercise management control over any other member firm.|
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Writing in the UK Guardian today, (page 31 – if you cannot buy the paper, you’ll find it among the related articles below assuming it is still available if you are reading this in a few weeks), Polly Toynbee accuses the Big Four of being “at the heart of almost every tax-avoiding scheme”. She proceeds to comment on their grip of the audit market and that, despite grave failures in auditing the banks they have not been disciplined by professional bodies.
Thank you, Ms Toynbee! We at Quoracy.com would just add that their immense lobbying power at the level of governments and regulatory institutions – their virtual control as a cartel of almost every regulatory insitution for audit in the EU – has made them almost impossible to punish. At the same time the middle tier audit Firms, with far fewer blemishes on their records, are bearing a proportionately greater brunt of the reforms that these Big Four governed or influenced “independent” bodies have enacted or are in the process of enacting.
No doubt they hope that they can pass their latest trick of raising the audit thresholds, in which the hidden agenda is to weaken the next tier down from the Big Four even more in the hope that some of the firms disappear (already appears to be happening to PKF from what was spoken about at their recent Cuba conference, and the merging into BDO of three already of their G20 firms) and that others will tone down or give up their audit offer. After which time, of course, they will no doubt be ready to lower the thresholds once again, in order to grab what they can from the reduced state of their mid-tier competition.
You heard it here first. Or maybe you know it already. If you’ve been running a mid-tier audit firm, you probably know it only too well…
- Tories at half-time: cruel and inept, with worse to come | Polly Toynbee | Comment is free | The Guardian (dralfoldman.com)
- Should tax-avoiding companies be named and shamed? – video (guardian.co.uk)
- Britain could end these tax scams by hitting the big four | Polly Toynbee (guardian.co.uk)
- Be bold, Labour, and expose Osborne’s skivers v strivers lie | Polly Toynbee (guardian.co.uk)
Please find below information regarding the Czech per diem as well as other travel expenses, correct as at the close of 2012 going into 2013, courtesy of Baker Tilly Czech Republic’s Head of Tax Lucia Rablova.
The new aspect is the obligation to reduce meal allowances when a free meal was provided.
The minimum statutory rates of meal allowances in case of domestic business trips are shown in the following table:
|Period of domestic business trip in calendar day||Meal allowances according to the decree||Obligatory reduction for 1 free meal|
|5 – 12 hours||min. CZK 64 (max. CZK 76)||up to 70%|
|12 – 18 hours||min. CZK 96 (max. CZK 116)||up to 35%|
|more than 18 hours||min. CZK 151 (max. CZK 181)||up to 25%|
The minimum statutory rates of meal allowances in case of business trips abroad are shown in the following table:
|Period of domestic business trip in calendar day||Meal allowances||Obligatory reduction for 1 free meal|
|less than 1 hour||———||——–|
|5 – 12 hours||1/3 of basic rate||up to 70%|
|12 – 18 hours||2/3 of basic rate||up to 35%|
|more than 18 hours||the basic rate||up to 25%|
Naturally, an employer may provide meal allowances to a higher amount, i.e. may set a higher rate of meal allowances or may claim reduction in lower than the statutory rate. From the corporate income tax point of view, the full amount of meal allowances is tax deductible. However, any difference between actually paid meal allowances and statutory provided maximum limits for employees in the public budgets sphere (see column II in table 1 – max. amount) is subject to personal income tax from dependent activities and is counted also for social and health insurance computations.
- CZK 3.70 per km and petrol usage reimbursement (price according to the receipt or average price according to the annually issued decree may be used)
- by receipt
- Netanyahu thanks Czech Republic for support (jta.org)
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- Marianne Memorial – Terezin, Czech Republic (travelpod.com)