GGI announces Despacho Acevedo y Asociados, SCP as a new member firm in Mexico

Despacho Acevedo y Asociados, SCP, headquartered in Mérida, Yucatán, was founded in 1949 by Joaquín Acevedo Ruiz del Hoyo. In 1997 it was developed further by Javier Acevedo Menéndez who is the third generation to run this firm.
The firm provides professional services to clients both nationally and internationally, and is active in the spheres of: Legal, International Trust and Estate Planning, Tax Consulting and Management Consulting.
Despacho Acevedo y Asociados, SCP has long-term and extensive experience with clients in the fields of commercial transactions. Over time, in response to the requirements of their client base, they have established five specific practice areas: Corporate, Labour, Litigation and Tax.
The firm, with 14 professionals whom have expertise in different sectors, are led by two Partners and offer high level services in two operating languages: Spanish and English.

CONTACT:

GerardoAcevedo_colour2.143024
Gerardo Acevedo

Mérida (Yucatán)
T: +52 999 920 28 11
F: +52 999 925 37 22
E: gacevedo@acevedoyasociados.com.mx
W: http://www.acevedoyasociados.com.mx

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GGI expand horizons in Asia with new member in Vietnam

DCPA Auditing and Consulting Co are the newest member of GGI, and originated in Hanoi in 2005. In the past ten years the company has gone from strength to strength demonstrating that they are a dependable and trustworthy CPA firm. In 2006 the company added an additional office in Ho Chi Minh City in order to promote their services in southern Vietnam.

DCPA provides three major categories of services: Audit & Accounting, Tax Services, and Research & Business Consulting. The company are committed to assisting foreigners doing business in Vietnam and specialise in providing international quality services with local expertise and best practices.

DCPA employs 16 professionals led by three Partners, who are able to serve their clients in English, Vietnamese and French.

CONTACT:

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Truong Nguyen Tran

Ho Chi Minh City (Vietnam)
T: +848 5411 0609
F: +848 5411 0610
E: truongtn@dcpa.com.vn
W: http://www.dcpa.com.vn

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Rao and Ross grow GGI’s presence in UAE

Rao and Ross were founded in 1983, in Dubai, which is now the base for their head office. Over 30 years later, the firm has a well-established presence in the region with additional offices in Ajman and Hamriyah Free Zone and they cooperate with a wider network of associates throughout the whole country.

Rao and Ross’ high level service focuses primarily in accounting. Some of the services rendered by the company include Statutory, External and Internal Audit, Accounting and Financial Management Consultancy, Feasibility Studies, Formation of Offshore Companies and Allied Services.

The company defines themselves as being a complete solution provider as a Consultant for Corporate Business & Financial Management, Project Development and Infrastructure, Audit, Accounts Management.

The firm’s multi-disciplinary team of 11 full-time professional staff including two Partners serve their clients primarily in English.

 

CONTACT:

Navin_Devjani_Rao_and_Ross.105807

Navin Devjani
Dubai,
United Arab Emirates

T: +9714 3538338
E: navin.devjani@raoandross.com
W: http://www.raoandross.com

 

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GGI North American Best Practices Conference & Developing Leaders Conference, Las Vegas, USA: May 14-16, 2015

Las Vegas

The Best Practices & Developing Leaders Conference will take place in Las Vegas on 14-16 May 2015.  This is a dual track program that will run in parallel.  The Best Practices Conference is specifically for all Managing Partners and Firm Leaders to share ideas, experiences, views and visions. The Developing Leaders Conference is for all junior professionals, new partners, and associates for professional skills development, and for opportunities to network with colleagues from other GGI member firms.

There will be ample social opportunities for participants at both conferences to meet, network and connect with each other.

More information is available via the GGI intranet: Log In > Click on the Events tab > Locate the Event > Click on the Document icon to download the official documents and registration form for these events OR Click on the Pencil & Paper icon to Register (you can use the registration form on either event to register for one/both events). EARLY BIRD REGISTRATION 28 February 2015.

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GGI Latin American Regional Conference, San José, Costa Rica: 16-19 April 2015

Costa Rica Image

The GGI Latin American Regional Conference, kindly hosted by GGI member firm Guardia Montes & Asociados, will be held in San José, Costa Rica, on 16-19 April 2015. > NOTE: This conference will be held in Spanish with simultaneous translation into English.

More information is available via the GGI intranet: Log In > Click on the Events tab > Locate the Event > Click on the Document icon to download the official documents and registration form for this event. Registration by email only. EARLY BIRD REGISTRATION 28 February 2015.

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Nominate: GGI Member Firm of the Year

excellenceThe “GGI Member Firm of the Year” award has been created to recognize GGI member firms that are prominent in particular areas of expertise and excellence within the GGI community. The awards reflect the innovation, achievement, strategy, progressive and inspirational changes taking place within the industry.

Nomination
All GGI members are eligible to submit one nomination another GGI member as the “Member of the Year”. Award nominations must be received before 15 June each year. Non-GGI members are not permitted to submit nominations.

To make a nomination, you must first be logged in to the website.  First, go to GGI Website > Log in as Member > GGI XLNC Awards Tab > GGI Member Firm of the Year > Submit Nomination.

Selection
The judging panel which is comprised of GGI’s Executive Committee and GGI’s Executive Management will scrutinize all nominations received to ensure that they meet the specific criteria for the GGI Member of the Year Award and will compile a shortlist from the nominated firms on the basis of the following criteria:

  • Reliability
  • Professionalism
  • Best practices
  • Response behaviour
  • Reputation
  • Certification and further training
  • Outstanding commitment
  • Client Services
  • Professional qualifications

Criteria such as particularly sustainable office management (e.g. paperless office), or excellent working conditions and social responsibility (employer of the year), and rapid but sustainable growth are also taken into account.

Award Ceremony
The awards are presented during the Gala Dinner at the GGI World Conference.

Questions? Email info@ggi.com

The debate surrounding Swiss lump sum taxation and the importance of the use of trusts

dataBy Thomas Brunner

General taxation for individuals resident in Switzerland

Like many other countries, Switzerland generally taxes resident individuals on their worldwide income. The income is taxed at federal level, cantonal level and communal level. The cantons and their communes independently determine the tax rates within the constitutional principles. Wealth, gift and inheritance taxes are imposed on a cantonal and communal level, but not on a federal level.

Lump sum taxation for wealthy immigrants

Individuals who make Switzerland their country of residence for the first time, or individuals that have spent at least ten years outside of Switzerland before returning to Switzerland, may opt for lump sum taxation. There are approximately 5,400 foreigners benefiting from this special form of taxation in Switzerland. Lump sum taxation was first introduced by Canton Vaud in 1862 in order to establish a tax system to efficiently tax wealthy foreigners spending a fair amount of time in Switzerland and benefiting from the local Swiss infrastructures without contributing to their maintenance. What at the beginning was not intended to be a privilege has developed into an attractive option for wealthy individuals to reduce their tax burden significantly by taking up residence in Switzerland. A prerequisite to opt for lump sum taxation is to renounce any gainful activities in Switzerland and not become a Swiss national.

With lump sum taxation, the payable tax is calculated by considering the expenditures of the individual such as the taxpayer’s living expenses in Switzerland, the living expenses of the taxpayer’s family and those of other persons the taxpayer supports. The taxable amount is calculated by multiplying the annual rental cost by five or the deemed rental value of the taxpayer’s dwelling in Switzerland. The cantons may apply different calculation rates. In the past, the taxable amount was often calculated at less than CHF 250,000.00 (tax basis).

In practice, the taxable amount is negotiated with the tax authorities of the canton of domicile. As a general rule, foreign source income and assets held outside of Switzerland do not have to be declared. Swiss source income (income from real estate situated in Switzerland; income from movable assets situated in Switzerland; income from financial assets invested in Switzerland) is only relevant when it exceeds the calculated living expenses as mentioned above. In such a case, the tax rate will be based on the income from Swiss sources.

Pressure on lump sum taxation 

The Swiss lump sum taxation regime has been subject to regular political debate in the past. Some consider it to be a disingenuous means to privilege wealthy taxpayers, which, from a legal point of view, contravenes the fundamental principles of equal treatment of all taxpayers and taxation based on economic capacity. Others see it as an instrument for enhancing Switzerland’s appeal as a place of residence. The Federal Tax administration estimates that more than 22,000 jobs directly or indirectly derive from the lump sum taxation regime, particularly in more remote regions and mountain resorts.

Swiss citizens already voted on the abolition of lump sum taxation at cantonal/communal level in 10 of 26 cantons. Five of these ten cantons confirmed the continuation of lump sum taxation and citizens decided to abolish lump sum taxation in the other five cantons, namely Zurich, Basel-Landschaft, Basel-Stadt, Appenzell Ausserhoden and Schaffhausen. On 30 November 2014 Swiss citizens voted on adding a new clause to the federal constitution forbidding privileges for natural persons and therefore a total abolition of lump sum taxation in Switzerland across all three levels: federal, cantonal and communal. The result was that a clear majority of 59.2% of the voters wanted to maintain lump sum taxation.

The reasoning behind this solid result in favour of the continuation of lump sum taxation may be grounded in the Swiss parliament’s endeavours to increase the calculation base from 2016 onward. The minimum tax base will be increased and shall be no less than seven times the annual rent paid or, for home owners, deemed rental value. The minimum tax base will not be less than CHF 400,000.00 for federal income tax purposes. The cantons will have to apply the same calculation method as the federation, but will remain flexible in determining the minimum tax base. Some cantons have already tightened their calculation methods.

Lump sum taxation will become more expensive for all those who were taxed on a basis below CHF 400,000.00 while for those who have less than CHF 12 million worth of assets, changing to the ordinary taxation system should be considered.

The use of trusts 

For wealthy, new immigrants the establishment of trusts before coming to Switzerland has become ever more important. On the one hand, lump sum taxation does not cover gift and inheritance taxes. Therefore, the assets of a person whose last place of residence was Switzerland are exposed to these cantonal taxes that already exist. Additionally a popular people’s initiative wants to establish a general Swiss gift and inheritance tax of 20% for wealthy persons with an estate of more than CHF 2 million. These taxes could be avoided by using trusts.

On the other hand, the proper structuring of assets by transferring them into a discretionary irrevocable trust may significantly reduce the tax burden of an immigrant in Switzerland when opting for ordinary taxation instead of lump sum taxation.

If, for example, a wealthy individual considers CHF 10 million or less as sufficient to live on in Switzerland, they may transfer all their assets exceeding CHF 10 million to a discretionary irrevocable trust and then emigrate to Switzerland. The assets in a proper structured discretionary and irrevocable trust and its generating income will not be taxed in Switzerland as long as no distributions are made to a person resident in Switzerland. The wealthy individual just pays taxes on his private assets, in this example amounting to less than CHF 10 million, and the generated income out of it. Depending on the investment strategy, the performance and the chosen place of residence, the payable annual tax can be much less than they would pay being taxed on a lump sum basis. Additionally, an ordinarily taxed individual is not restricted in pursuing any gainful activities in Switzerland contrary to an individual who is taxed on a lump sum basis. Profound advice regarding tax and estate planning, proper structuring of assets and investments is essential for a sustainable and longstanding benefit.

Please contact us with any questions or for advice.

GGI member firm

Swiss Trust Company Ltd.

Zurich, Switzerland

Auditing & Accounting, Tax, Advisory, Corporate Finance, Fiduciary & Estate Planning

Thomas Brunner

E: thomas.brunner@stg.ch

W: www.stg.ch

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Focus on Luxembourg

Screen Shot 2015-01-30 at 3.09.48 PMBy Prof. Robert Anthony

The fourth amendment to the Tax Treaty between France and Luxembourg, as signed by the Ministers of Finance for the Grand Duchy of Luxembourg Pierre Gramegna and for France Michel Sapin, will further restrict potential tax evasion schemes and abuses by French financial investor centres. After an amendment in 2006 ended the non-taxation of immovable property in France owned by Luxembourg companies, another tax exemption has now been eliminated. This had made it possible to avoid tax on gains from the sale of securities of companies, trusts or other entities, predominantly real estate.

For many years, Paris and Luxembourg have been negotiating the end of this loophole, which has made Luxembourg very attractive through the possibility of creating holding companies in the Grand Duchy which primarily invested in real estate in France.

Exemptions from both sides of the border

It must be said that the old text gave rise to considerable abuse on the part of investors. Paris sought to achieve this in Luxembourg in 2006, when an amendment was signed to the Convention of 1 April 1958 between the two countries. This was the second amendment to the original. From 1 January 2008, the agreement made gains taxable in the country of location of the property, real estate property income or capital gains, even if they are generated by a company subject to a tax equal to the tax on corporate income in the Grand Duchy. However, this did not resolve all the problems of non-taxation as had been intended.

Nevertheless, the signing of the second amendment marked the end of an era that was advantageous to a Luxembourg fiduciary based on this monolithic activity. It had only existed by virtue of this niche tax planning opportunity: selling structures to French customers under Luxembourg law enabling them to hold property in their country without paying tax.

Only real estate

The result was a tax exemption on both sides of the border. Paris then pressed Luxembourgers to change the text, but the renegotiation of the agreement proved complex. The 2006 amendment did not take into account income from the direct ownership of real property or the income which passed through intermediaries.

According to the statement from the Luxembourg Ministry of Finance, Paris and Luxembourg will continue their work focused on modernising the text of 1958, which still needs a serious facelift.
GGI member firm
Anthony & Cie
Fiduciary & Estate Planning, Tax
Sophia Antipolis, France
Prof. Robert Anthony
E: robert@antco.com
W: http://www.antco.com

© http://www.paperjam.lu / Véronique Poujol

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Mexico’s tax reforms to date and what to expect next

200397092-001_mexico city_tcm530-378257By Sergio Guerrero Rosas

President Peña Nieto’s controversial “sugar tax” was brought into force a year ago, targeting high calorie foods to the tune of 8% of their value. While the jury is still out as to whether it has had the desired effect on the population and the various burdens, what has become an issue of far greater significance is the success or otherwise of the more substantial reform package to which the sugar tax belonged.

Rises in income tax and corporate tax sought to generate revenue in a new, forward-looking Mexico, focused on social responsibility, investment in infrastructure and economic growth. Furthermore, tightened loopholes and a simplified tax structure aimed to push Mexico towards increased productivity, while making it an altogether more attractive prospect for foreign investment – a key feature of Peña Nieto’s vision for Mexico.

“Our goal is to play a more active role in the global economy,” wrote the President in the UK’s Financial Times recently, before emphasising that his reforms “intertwine in pursuit of a single goal: to increase Mexico’s productivity and competitiveness”. He also took time to highlight Mexico’s significant international standing as an oil producer and its shale gas resources. It is Nieto’s historic, highly controversial, reform of Mexico’s energy sector that underpins his entire economic strategy, having swung open the door to private investment in Mexico which had previously remained closed.

The massive auctioning off of well over one hundred oil and gas blocks this year aims to create a bidding frenzy, generating USD 50 billion by the end of Peña Nieto’s presidency in 2018. However, falling oil prices threaten to undermine this strategy, which could in turn have a significant impact on domestic policy at a time when Nieto’s administration has been called into question following a series of political disasters.

The shocking disappearance of 43 student teachers in the state of Guerrero brought about widespread protest and international condemnation, just as revelations regarding Peña Nieto’s wife, Angelica Rivera, seemed to force the President’s hand in U-turning on a multi-billion dollar contract for Mexico’s first high-speed rail link, to be built between the capital and the city of Santiago de Queretaro.

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The contract, only recently won by a Chinese-led consortium, was suddenly cancelled when it emerged that a luxury property owned by Rivera had recently been built by a construction group, Grupo Higa, strongly connected with the contract-winning consortium. Further revelations showed other links between the group and the President himself, with Grupo Higa reportedly having benefitted from contracts to the tune of over USD 600 million in the State of Mexico during Peña Nieto’s time as State Governor.

Needless to say, Chinese investors were stunned at the turn of events, which, for a time at least, threatened to have far-reaching implications for the business links between the two countries. However, fortunately for Mexico (not to mention President Peña Nieto), Chinese enthusiasm for investment in Mexico appears to be unabated, and plans for more than USD 7 billion of investments in Mexican infrastructure and energy pipeline projects have since been announced by Beijing.

Moreover, there are further indications that Sino-Mexican relations are going strong, with the arrival of the Industrial and Commercial Bank of China (ICBC) being fast-tracked through what is an often laborious licensing process in Mexico, leading an ICBC spokesman to anticipate: “a boost in economic exchanges and trade between China and Mexico, contributing to bilateral co-operation in sectors such as energy, trade, projects contracting and equipment supplies.”

Furthermore, trade and manufacturing relations between Mexico and the United States continue to strengthen: over USD 500 billion is generated in business between the two countries per annum, and the countries’ presidents met in the White House at the start of the New Year to discuss, among other topics, the Trans-Pacific Partnership, as well as strategies for opening new markets to Mexico and the U.S. within and among its twelve Pacific Rim member countries.

Meanwhile, though, anxiety persists as to the success of that all-important energy sell-off. Despite the expectation that increases in tax revenue will continue for the duration of Peña Nieto’s presidency, uncertainties in the global economy could rein in Mexico’s anticipated economic growth, in the short term at least, and possibly even limit intended public spending in his budget plans for 2016, despite the political fallout that would inevitably ensue.

Nevertheless, despite what could prove to be a rocky road ahead for the big energy auction, no significant amendments have been made to the 2014 budget: corporate tax remains at 30% and income tax at up to 35%, all the while further reforms press ahead. The IEPS (the special tax on specific products and services, and which includes the sugar tax) also remains at a similar level.

Over the course of 2014, improvements in the efficiency of tax collection methods have been observed. The sugar tax has successfully raised tax revenue, but the tax authority has been very slow to make VAT returns to companies, which has caused some difficulties.

However, Mexico continues to maintain healthy debt levels, it has achieved its initial tax revenue targets, the country has made progress – despite notable setbacks – in transparency levels, and it has recently received rating upgrades from the three major credit ratings agencies.

In this context, irrespective of the immediate uncertainty under the current administration, Mexico remains committed to establishing itself in the global economy and encouraging foreign investment and trade. There is cause for optimism that the long-term reward will be well-programmed and administered investment in the country’s infrastructure and people. As always, though, the success of public spending programmes will largely depend on Mexico’s ability to combat corruption and its continued efforts to improve transparency.

GGI member firm

Guerrero y Santana, S.C.

Auditing & Accounting, Tax, Law Firm, Advisory, Corporate Finance

Tijuana, Baja California, Mexico

Prof Sergio Guerrero Rosas

E: sguerrero@guerrerosantana.com.mx

W: http://www.guerrerosantana.com.mx

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