IAPA meeting regarding software programs

On January 14, 2017 a special IAPA meeting in Rotterdam took place. The meeting was voluntary and 7 countries joined the meeting.

During the meeting each attendant gave a presentation regarding the software programs used for billing, accounting, auditing, tax, correspondence and permanent files. The goal was to learn about the software used by the members to get new ideas for the automation for their offices. It was interesting to see that the attendants used software programs of several local and international suppliers.

The process of scanning invoices for automatically bookkeeping is a hot item and most attendants are working with that. The development of programs is going fast so the IAPA-members keep investing to be up to date and to be upfront against their competitors.

The attendants found the meeting valuable as they got knowledge of the practices and developments in other countries and based on this knowledge they can go further with their goal to work efficiently for their clients.

Author: Harry den Hond, Schagen Lensen & van Krieken Accountants, Rotterdam


International advice for medium-sized businesses

On the 23rd and 24th of May 2014 the IAPA (International Association of Professional Advisers) had their annual meeting in Hamburg where the international network celebrated their 25th anniversary. 34 persons from 16 European tax advising and auditing firms attended the meeting.

The participation of colleagues also from non-member countries at the annual meeting shows the attractiveness of this network as well as the increasing necessity for advisors of medium-sized businesses to gain international know how.

Apart from professional exchange via presentations about international tax law and lectures about changes in tax law in the countries of the IAPA members, Somann & Scheller had the opportunity to present their office to the IAPA colleagues.

The successful event has again emphasized that the members of the IAPA can give their clients fast and first class professional advice because of the intensive co-operation between the offices when it comes to cross-border cases.

Author: Claudia Keidies, Partner at Somann & Scheller, Hamburg


Ruling of the European Court of Justice on Inheritance Law

iapa-conference-london-june-2012_150pxOne of the topics of the Annual General Meeting of the IAPA International Association of Professional Advisers on 25 and 26 May 2011 in London was


Ruling of ECJ on Inheritance Tax

Inheritance and gift tax systems are less harmonised in the EU then other tax laws. This often leads to double taxation in cross-border cases. The EU commission describes in its recommendation of 15 December 2011 various reasons for double taxation scenarios. National tax systems of foreign relief of inheritance taxes have in general limitations. And there is a very limited network of double taxation treaties or no regulations in EU law.

The only protection against double taxation is provided by EU freedom rights of the EU treaty. Prohibited are discriminating measures by EU-member states. Not allowed is also legislation or other legal measures of a member state to restrict EU-freedom rights. There is a wide range of ruling of the European Court of Justice (ECJ) concerning taxation of cross-border transactions but only a limited number of rulings regarding inheritance and gift tax. The ruling of ECJ on inheritance and gift tax is based predominately on the violation of the Freedom to transfer capital. Other freedom rights such as the Right of establishment or Freedom of employees do not play a major role in the court’s ruling.

The ECJ is verifying a violation of EU law always in three steps:

  • Did the transfer of capital take place?
  • Was there a restriction of a free transfer of capital?
  • Is there a justification for a restriction imposed by a member state?

The ECJ considers inheritances, legacies, gifts and foundations always as a capital transfer in this respect. Excluded are only cases where a transaction does not have a cross-border connection. A restriction requires that a non-resident is treated less favourably than a resident in a comparable situation or vice versa, or a citizen of another state is treated less favourably than an own citizen in a comparable situation or vice versa. Important is that the situation is comparable based on objective criteria. But the court ruled that negative tax effects of activities abroad alone do not necessary result in a restriction of freedom rights. Reasons for restricting measures by member states can be the Consistency of tax systems, Measures against tax fraud and tax evasion or the Efficiency of tax collection. In recent rulings the ECJ developed as a new reason the Principle of balanced allocation of power to tax between member states. But the restricting measures must meet certain criteria set by the court. Restricting legal measures by member states often do not meet these criteria.

In recent years there were a few cases on inheritance a gift tax

  • Courts case van Hilden – van der Heijden (ECJ 23/02/2006 – C – 513/03): Dutch inheritance tax on citizens for a period of 10 years after leaving the Netherlands and taking residence in Switzerland is in line with EU law.
  • Court case Jäger (ECJ 17/01/2008 – C 256/06): It is not in line with EU law if Germany imposes different regulations on the valuation of domestic and foreign property (real estate).
  • Court case Arens-Sikken (ECJ 11/09/2008 – C – 43/07): It is not in line with EU law if the Netherlands do not allow a deduction of compensation payments to other heirs as estate debt if the deduction is disallowed only for non-residents.
  • Court case Block (ECJ 12/02/2009 – 67/08): A double taxation is in line with EU law if Spain taxes an estate because cash funds and bonds are deposited at a Spanish bank and Germany taxes the same estate because the descendent was resident in Germany at the time of death. Germany was not obliged to credit the Spanish tax against the German tax.
  • Court case Mattner (ECJ 22/04/2010 – C – 510/08): It is not in line with EU law if Germany grants a lower personal threshold for non-residents than for residents.

The court case Block seems curious. The court ruled that the Freedom to transfer capital is not restricted. But obviously the German regulation is meant to restrict a free capital transfer abroad. It seems that this ruling was a political decision. And one can understand the court’s problem. Which member state is breeching EU freedom rights: Germany or Spain or both?

There is no clear outline in the EU which member state has to avoid or minimise double taxation burdens. But the consequence is that one member state alone is not allowed to breech EU law. But two or more member states together can do it without any negative consequences.

Now the problem of double taxation in inheritance and gift tax law has been addressed by the EU commission in its recommendation dated 15 December 2011. The commission states very clearly that double taxation concerning inheritance or gift tax is not supporting the smooth functioning of the internal market. Revenues from inheritance and gift tax especially from trans-border transactions represent a relatively small share of overall tax revenue of member states while double taxation have a major impact in individuals affected. The commission recommends an EU-system which allows avoiding double taxation scenarios. Whether this recommendation has an impact on the ruling of the ECJ remains to been seen.

Another uncertainty is whether cases with connection to non-member states will be protected by EU law. This is due to the fact that the Freedom to transfer capital is not restricted to the EU. In theory also citizens or residents of non-member states are protected by Article 63 EU treaty. And also property outside of the EU might be protected. The ECJ will be able to clarify whether the Freedom to transfer capital will also be applicable in cases with connection to non-member states. The Bundesfinanzof (highest German fiscal court / BFH 15/12/2010, II R 63/09) asked the ECJ whether business property situated in Canada can be valued for inheritance tax reasons at a higher level than property situated in Germany.

Unclear is also whether Swiss citizens can claim the same rights as EU citizens based on the non-discrimination clause of the Agreement of free movement and settlement between Switzerland and the EU.

Author: Peter Scheller Hamburg www.somannscheller.de


London hosts IAPA Annual Conference 2012

iapa-conference-london-june-2012_150pxOn 25/26th May delegates gathered in London and enjoyed an unexpectedly fine spell of weather for the 2012 Conference.

On the Friday afternoon a visit was arranged to the offices of the host firm, Macilvin Moore Reveres, in Harrow and later on in the evening there was a dinner at Smith’s Bar and Grill in Paddington Central where everyone enjoyed cuisine described as “modern British”.

Saturday morning was the formal IAPA conference and AGM chaired with his usual aplomb by Peter Scheller with the financial report from Hugo Schauli, a very interesting presentation by Tom Keane and various contributions from the other delegates followed by a buffet lunch.

In addition to the usual program of events many of the delegates and their partners managed to find time for some of London’s famous shopping venues and even a round or two of golf ! Having proved to be capable of hosting an IAPA conference London is now declared officially ready to cope with the 2012 Olympic Games!

We now look forward to the 2013 Annual Conference at a venue still to be announced.

Author: David Segall, Macilvin Moore Reveres LLP, London, www.mmrca.co.uk

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Scientific Co-operation in International Tax Law

Tax law is a field of scientific research. And there are co-operations of universities from different countries. On 4 March 2011 the second Joint Seminar of the following universities will take place in Hamburg :

  • University of Hamburg (Course of studies: Master of International Taxation)
  • Universita die Roma Sapienza (Course of studies: Master in Pianificazione Tributaria Internazionale)
  • Guardia di Finanza – Corso Superiore die Polizia Tributaria

The seminar will cover the following topics:

  • Transparancy and Exchange of Information with “Tax havens”
    • The legal Framework for Exchange of Information
    • Domestic Measures against the improper use of tax havens
  • The Domestic Legislation against Tax Havens
    • Constitutional , EU and International Framework of Mutual Assistance in Tax Matters
    • The Single Instruments (New Rules and Critical Issues)

Co-ordinators are the professors Gerrit Frotscher and Pietro Selicato.

Speakers from the IAPA are involved and will cover the following topic:

Domestic Measures against the improper use of tax havens


General annual meeting in Moscow

This year’s General Annual Meeting of the IAPA took place on May 28th and 29th in Moscow. It was the first meeting of the IAPA in Russia. Host was Kosmos Audit. The participants of the meeting enjoyed Kosmos Audit’s outstanding hospitality.

The photo shows the participants on the Red Square in front of the Kremlin.

moscow

This year’s meeting focussed on the question how to provide clients, associated partners and other interested parties with interesting topics. The information center will provide details regarding tax and legal systems in member states, international tax planning as well as accounting and auditing issues in an international context. In the next months various articles will be published on this website.

Author: Peter Scheller, Editor-in-Chief


The first post

This is the first post from IAPA. In the future there will be blog-like information in this section. Everything around our claim „Audit, Tax and Accounting in Europe. And worldwide.“

You will find posts from Austria, Belgium, the Czech Republic, Denmark, France, Germany, Great Britain, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Switzerland.

The information comes from dozens of Chartered Accountants and Tax Advisers from numerous European IAPA members. Have fun with their posts. Comments are deactivated but, please, feel free to contact any individual author or other member of IAPA for questions or further assistance.