Blogs

Jarl Moe - President and Founder Of The TaxWizards

Dear Friends and Clients all over the world.

We have almost reached the middle of a new year, the great year of 2014.

At TaxWizards we have had an exciting time as we have branched out from the basic Cyprus operations to Asia and new markets.

Cyprus had a financial crisis in summer 2013 and many within our indudstry had to re-organise themselves. We where no different.

Our clients wanted more banking solutions!

That's why we now can offer our clients to open accounts in other European countries and Asia at this second.

We can even open you a new bank account in 1 day!

Our 24 hour service has been greately appricated by many old and new clients ensuring them online banking facilities in hours and minutes.

Contact us today to look at your options.

We are looking forward serving you.

Warmest regards,

Jarl Moe

President.

EUROZONE

EurohandsThe Eurozone, as I’m sure by now everyone is aware, comprises of 17 EU member states that have the Euro (€) as their currency. These states are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.  In the Eurozone just of late, the Finns are starting a process to form a government and the Greeks and Germans are attempting to restructure their debt.  It is probably a good idea for all countries in the Zone (that are in debt) to divert their money to where it can be used to create maximum growth.  Although Greece and Germany are likely to be unable to sustain their current debt burden many of the other European banks are trading profitably and rebuilding their balance sheets.

Ireland’s finance minister told parliament recently that people are making false comparisons with Greece and that the country is not in the same category as Greece as, their position is sustainable. For politicians there could be the commendation to use taxpayers' money locally and profitably which could forestall the real danger of outbreaks of civil unrest, bank collapses and full-blown economic crises.

Shares in aerospace firms and other exporters producing in the Eurozone and selling in the United States are seen as vulnerable stock.  Over the past year the European market has been rocked by the debt crisis, and during respite moments when the euro rallied, stocks followed suit, with a number of foreign investors seen playing the strong positive correlation between the euro and euro zone equities.  In addition, European stocks have been quite flexible in uniting hand in hand with the Euro over the last 2 months.

The European Central bank has increased the Eurozone’s interest rates to 1.25% as of last month, this being the first increase in almost 2 years after being held at a record low of 1%, following the financial crisis.  Figures released at the end of April depict that inflation in general in the Eurozone has risen from 2.7% to 2.8%.  The European Central Bank is charged with keeping standard rates at 2% and below; the marginal lending rate being 2% and the deposit rate 0.5%.

Friday, 6 May 2011


TELEPRESENCE

According to the Global Business Travel Association, people in America went on 427 million business trips last year. Their travel included making sales presentations, checking in on branch offices, placating clients, making site visits, lobbying politicians, meeting with suppliers, manning job fair booths and interviewing applicants.  They also traveled in order to be able to attend corporate retreats, trade shows, conferences, etc, and then they traveled some more to get back home again.  All of this travel cost approximately $228 billion, as well as countless gallons of jet fuel, masses of carbon dioxide and hours spent in traffic.

So why do it? Because we all believe there can be no substitute for in-the-flesh contact.  It's all well and good to be able to project elements of ourselves over a distance, for example; a phone can carry our voice, a computer or fax can send our words, video calls transmit our faces.  But, none of these things offer a sense of human presence (that the person is there in front of you), and to evaluate or win their belief or smoothly work together on a complex, task or project, you do still need to be there.

Conference

A new set of tools, however, has now come about that has the potential to change this way of life and the term the creators of this new technology use is "telepresence." Some of the tools are custom-built meeting rooms (see photo right) with HD screens and cameras.

Others look like humanoid robots.  And although neither really fools people into thinking their distant delegates are right there in the flesh, what it does achieve (according to a telepresence spokesman) is the ability to look somebody in the eye and say: ‘Do I trust this person?’

"You're able to virtualize people and resources," says Marthin De Beer, the Cisco executive who led the development of the company's telepresence offerings.  Cisco is currently one of the biggest players in the field along with Polycom.  A third, Norwegian company Tandberg, was taken over by Cisco last year and the market that they're competing over is growing.

Just as most people 15 years ago felt uncomfortable shopping or dating online, it is easy to imagine that interactions now understood to require physical interaction may soon become perfectly acceptable to do by telepresence. Even today, expensive as the technology can be, for many users it's being there in person that's beginning to feel like a luxury.

Monday, 14 March 2011

 

Does it 'work for you'...?

Credit CardA week ago, Northern Rock bank launched a ‘brand' campaign called 'Northern Rock. Works for me'. The new campaign was put together following extensive research by Northern Rock into what its customers think about banking in general and how things can be improved on a day to day basis. The UK-wide print advertisements place its customers at the heart of its operations, while radio spots push the message home.

The 'Works for Me' campaign is the first from Tangible Group and Farm Communications since they were hired by the bank last month. The new brand strategy, 'Northern Rock. Works for me', cements the Company's commitment to listen to what its customers want from their bank, and to use that knowledge to deliver straight-forward, clear and simple products in a friendly and understanding way.

Andy Tate, Northern Rocks' commercial director, said: "We've spent a lot time listening to our customers to find out what they value and want from their bank. It was overwhelmingly apparent that having good, friendly service and a fair and open relationship with their bank is very important to them. They want evidence that we are working for them. This is what Northern Rock is striving to offer.‘Works for me' is about putting our customers at the heart of Northern Rock - that's why we're letting them do the talking in our advertising. We want them to tell other people that we're committed to building an honest and straightforward bank for all. We've got a strong range of savings products and we're confident that by putting our customers first, they will continue to re-build their trust in us, and help us build a better Northern Rock."

The campaign suggests that Northern Rocks customers are assured a friendly welcome and easy-to-understand products, with the narrator of one of the advertisements saying: “I want a bank that gets it's about me not about them”.

Whilst I believe it's a commendable start at rebuilding their tarnished image, many others will require a lot more convincing that Northern Rock is a bank to be doing business with – let alone one to trust with your savings!

Thursday, 17 February 2011

 

ENERGY PRICES FUEL INFLATION RATE INCREASE

CurrenciesThe topic in the news in Europe that has dominated much discussion over the past few days was inflation. The latest data shows that it rose almost 4% per cent during December. Food and fuel prices have risen by nearly 30% per cent over the summer and are still rising. The biggest contributor though was air fares, probably due to the fact fuel and lubricant costs have gone up at the fastest pace since 1996.

Signs of surging prices have called for the Bank of England to raise interest rates and the markets are also doing some raising of interest rates for policymakers. British industrial companies are feeling the pinch too. On a good note however, wages are rising much more slowly than prices.

Inflation in India remains elevated despite tight cash conditions. This suggests the central bank should be more aggressive in raising interest rates as inflation spreads beyond food and primary articles.
More expensive food items have played a key role in pushing up headline inflation, and the Reserve Bank of India's projection for inflation to ease to 5.5% at the end of the fiscal year in March appears optimistic.

The Reserve Bank of India is expected to raise its interest rates for the seventh time in less than a year. However, monetary conditions in India, Asia's third largest economy, remain relatively loose which leaves room for further tightening, particularly as price pressures are building.

Tight cash conditions have done little to help contain inflation and reserve money has continued to rise rapidly in recent months. Before the financial crisis, reserve money consistently led broad money growth, the central bank's key monetary gauge.

Between the years 2000 - 2007 the annual change in reserve money had a 0.6 correlation with the year-on-year change in M3 and it dropped to 0.4 for the period 2000 - 2010 due to huge liquidity injections during the global financial crisis.

CREDIT-DEPOSIT RATIO WIDENS
With more and more of the nation turning to loans and credit cards, people taking bank credit is growing at a yearly pace of around 24.4%, while deposits are on the increase at just 16.5%.

The credit-deposit ratio widened to around 75.7% at the end of December 2010 compared to around 70% at the beginning of last year, making it climb above the monthly average of the past five years of 69%.

And here is another figure: 2%. This is the level at which the Bank of England is meant to keep inflation. 1% above that and Mervyn King (bank governor) has to write to the chancellor explaining why and what action he will take.

Given that oil and food prices are still on the rise, there will be plenty more memorandums heading from Threadneedle Street to the Treasury over the next few months. The Bank chief and his colleagues on the monetary policy committee (MPC) are bound to come under growing pressure to raise interest rates - or face losing their inflation-fighting credentials. This does not make life easy for the chancellor. For a start, it's the right of his own Conservative party who are sounding the most alarmed about inflation and calling for rates to rise and if workers do start asking for inflation-busting salary increases, then Mr Osborne faces the dreaded wage-price spiral.

But if voters don't win such wage rises (which is looking likely) they face a hard pinch on their living standards. This will leave the economy facing three big deflationary threats: a historic cut in public spending, the possibility of rate rises, and consumers forced to consume less. Not a good combination.

Wednesday, 12 January 2010

 

Shift of Power

A new study recently released found that a “dramatic shift” in the balance of power has given institutional investors the upper hand in the alternative investment industry. Offshore financial centres like the British Virgin Islands may be poised to benefit from the shift as investors look for transparent, lightly regulated jurisdictions. The findings show that managers and administrators believe that regulation and governance are the most important challenges facing the industry over the next three years.

According to the study, Transformation: The Future of Alternative Investments, a survey of 200 respondents from more than 26 countries found that most institutional investors believe that that regulation will not produce any tangible benefits, but will add costs and bureaucratic burden, stall the industry's engine of creativity and limit choice.

Further barriers from regulation are expected to impact the rate of new start-ups, particularly for managers with assets of less than $100 million, who will find it increasingly challenging to run a long-term business.

This is of particular importance to the BVI because BVI managers are typically start-ups with less than $100 million under management.

Nevertheless, the report finds that most agree that further regulation is on the way. “Investors, managers and servicers take a fatalistic approach to this subject. It is viewed as an inevitable consequence of the recent well publicised scandals affecting the industry, combined with the dramatic market volatility in recent months,” the report said.

Despite this, the offshore industry is “well poised” to benefit from recent growth due to initiatives taken by the Financial Services Commission and the International Finance Centre. “New legislation and achievement of the OECD's White List are significant changes that increase the credibility of the jurisdiction in the eyes of potential investors.”

Tuesday, 7 December 2010

 

Cyprus shapes up

Island of CyprusFrom the heart of Limassol's past you can see the future. The ramparts of the medieval castle in Cyprus's southern-most city, the legendary site where Richard the Lionheart married Berengaria of Navarre, look out across centuries of history – but also afford a view of the recently started works to give the island a new marina. At the foot of the fortress walls, stylish contemporary restaurants reminiscent of those in the south of France attract in-the-know visitors and the local beau monde .

In effect extending the city centre, the €350m marina, due to be operational by 2013, will sit next to the ancient port that has sheltered fishermen and traders for centuries. It has been designed to blend in with its historic surroundings, and will offer 600 berths, dry dock facilities, 6,000 sq metres of new boutique retail and restaurant space and more than 270 apartments and villas. Seventy of these will allow owners to moor boats at the bottom of their garden and 16 will have direct access to a newly created beach.

Reservations are now being taken for the Nereids Residences, with prices ranging from €430,000 for a one-bedroom unit to €2.3m for a four-bedroom apartment with extensive terraces. Other developers too are aiming to woo high-end investors with high-spec properties. A mile along the beach the twin towers of the Olympic Residence are rising, offering sea-view, modernist apartments and penthouses with luxury facilities priced from €700,000 to €13m (both plus VAT); while in heart of the city but still only minutes from the beach, the Columbia Townhouses offer duplex and triplex accommodation, some with rooftop swimming pools, from €360,000.

Island idyll?

Pros

● Sunshine 330-plus days of it per year

● Tax A corporate rate of only 10 per cent

● Low crime rate

Cons

● Division of the island with the northern Turkish Republic of Northern Cyprus

● Completion times. Many developments are large and take many years to finish, meaning owners can endure a long wait

● Heat in June, July and August temperatures soar to levels that many northern Europeans struggle with, making the island perhaps less attractive during UK school holiday months

Further along the coast, near the edges of the city, the island's beaches, bluffs and coves are the centrepieces of residential developments such as the Amathusa Coastal Heights, where Stephen Gillman, chairman of a media services company, and his wife Maria own a two-bedroom, sea-view holiday home. The fiftysomething Guernsey-based couple reserved their property in 2005, took ownership in 2007, and have since seen it rise in value about 50 per cent. They had previously considered buying on Crete but chose Cyprus for its more straightforward property purchase process.

“The Cypriots are making lots of improvements – to the roads and infrastructure – and really investing,” Gillman says. “In the five years we've been coming here we've noticed that attitudes have changed. Partly because tourism has struggled, the Cypriots have realised that they have to change.”

The Limassol marina is the first element in an initiative by the tourist arm of the Republic of Cyprus, which governs the southern part of the island. Having joined the European Union in 2004 and adopted the euro in 2008, it is attempting to attract higher-income visitors and property investors. To further raise the island's yachting profile, more marinas are planned for Larnaca, Agia Napa and Paphos. And the Akamas peninsula, in the north-west of the island near Polis, home to a hatching site for loggerhead turtles and more than 230 sq km of mountain wilderness, is expected to be turned into a national park.

Nearby, on a beach just outside Latchi, Cybarco is building 40 modernist residences at the Akamus Bay Villas development, priced from just under €4m for a four-bedroom house. Each has views over the beach and sea, swimming pools, landscaped grounds and concierge services.

Meanwhile, developments such as Minthis Hills and Aphrodite Hills, a few minutes' drive from Paphos and the bay where legend holds that the goddess Aphrodite was born, cater for that other great generator of high-end property appetite: golf. Almost a dozen courses are open or planned for the island, several with upmarket residential complexes. Properties at Minthis Hills start at €1.3m for a three-bedroom home, while at Aphrodite Hills €1m will buy a three-bedroom villa.

High-end and luxury properties are helping to keep the Cyprus property market moving, says Spyros Droussiotis, an independent estate agent. He says that while areas such as Limassol weathered the economic downturn with drops in property prices of only 5-8 per cent, some areas of the island saw falls as big as 40-50 per cent.

“There is great demand for expensive projects,” he says. “It's not easy to sell a cheap apartment in Limassol but it's much easier to sell an expensive apartment. Two hours ago I sold two three-bedroom apartments approximately 180 metres from the sea at €700,000 plus VAT. They are very exclusive properties: they are gated, they have underground parking, all the modern facilities and all the satellite and media systems. Now it's a buyers' market. You can find a lot of opportunities, a lot of bargains.”

Monday, 15 November 2010

 

As part of a large scale, phased, amendment of the VAT rules at a European level...

VAT_return_Jarl_Moe_Bloga large number of EU VAT rules will change with effect from 1 January 2010. The most significant change concerns the rules for determining the place where a service is supplied according to the VAT rules, and which country can therefore tax these services (the "place of supply" rules). In 2011, 2013 and 2015 a number of smaller changes will follow. In addition to simplifying some of the existing rules, the changes also create new obligations, particularly from an administrative point of view.

All EU member states must implement these European rules into their national legislation. Accordingly, the proposed amendments to the Dutch VAT legislation have been published and are examined below.

Place of supply of services from 2010
Until 1 January 2010, the place of supply of services is where the service provider is established for VAT purposes, according to the ‘basic rule' (specific rules exist for certain services). With effect from 1 January 2010, this ‘basic rule' will change: for services provided to businesses (B2B services) the new ‘basic rule' is that these services are deemed to be supplied where the recipient of the services is established (reverse charge mechanism).

The service provider will not charge VAT but the recipients of these services will have to account themselves for the VAT payable on these services in their local VAT returns under the reverse charge mechanism. This VAT is deductible in the same VAT return according to the normal rules. As a result of this new ‘basic rule' for cross-border B2B-services, in many cases VAT will no longer have to be charged (and reclaimed).

The changes to the rules that determine the place of supply of services to non-business customers (B2C services) are less far-reaching.

Listings
With effect from 1 January 2010, businesses that supply ‘basic rule' services to businesses in other EU countries will have to periodically report these services by submitting a listing electronically to the tax authorities. These services must be broken down by value per VAT number for each service recipient. Services that are exempt in the recipient's country should not be included in the listing.

The listing should be submitted monthly to the Dutch tax authority, but all businesses may opt to submit quarterly listings. This choice should be communicated to the Dutch tax authority in a timely manner.

Refund of foreign (EU) VAT
With effect from 1 January 2010 it will be easier for EU established businesses to reclaim foreign (EU) VAT. The new procedure is also applicable to foreign (EU) tax paid in 2009. Where previously businesses had to send a number of documents and all original invoices by mail to each individual foreign tax authority, Dutch established businesses can, from 2010, apply for a refund of foreign (EU) VAT with the Dutch tax authority via the internet. The Dutch tax authority will assess the refund applications and forward them to the relevant foreign tax authorities.

From 1 January 2010, the costs on which VAT is reclaimed will have to be classified according to ten categories (nine specific categories and a general category). In addition, the applicants must include details of their deductible VAT method of calculation (if applicable) in the country of establishment. In addition, the foreign tax authorities will be required to process requests within a certain time. If they exceed the specified time (different time limits will apply in different circumstances), they will have to pay interest to the applicants.

Tax point – when is VAT due?
An additional rule will be introduced into the Dutch VAT legislation regarding the time at which VAT should be accounted for, i.e. the tax point. Where the service recipient is required to account for VAT under the reverse charge mechanism (as explained above), the tax point will be the moment when the service is provided.

In most cases, recipients of these services will not know (or will have no way of knowing) at what moment the services are provided or the value. They will usually rely on the invoices issued by the service providers. If they receive these invoices after the moment at which the VAT was due according to the new rule, strictly, they will be late in accounting for this VAT.
This new rule will have the most significant impact for businesses that cannot fully deduct input VAT, as these businesses will actually have to pay (part of) the VAT due on these services. Businesses with a right to fully recover input VAT can normally fully deduct the VAT accounted for on these services in the same VAT return.

In addition, where these services are supplied cross-border within the EU, there is a chance that mismatches will occur between the VAT accounted for in the VAT returns of the recipients and the services reported in the listings submitted by the service providers. This could result in enquiries from the tax authorities.

Important: what to do now?
The date of 1 January 2010 has passed and many are not aware of the new rules, it is a lot that needs to be done:

Both for determining the place of supply of services as well as for completing the new listing, businesses will have to establish whether their (EU) clients are VAT taxable businesses.

For this purpose, clients will have to provide businesses with their VAT identification numbers and these numbers should be checked by the service providers with the Dutch tax authority. When a customer provides a business with its VAT identification number, and the business has checked this VAT number with the Dutch tax authority, the business may assume that it will provide its services to a VAT taxable business.

Businesses will have to adjust their ERP systems to accommodate the new rules. This applies not only to the place of supply, but also, for example, when invoices include a reference to specific sections of the relevant legislation. ERP systems should also allow compilation and easy access to all data relevant for completing the new listings.

The procedures for reclaiming foreign (EU) VAT will have to be adjusted.
Everyone in your business that is involved in processing and raising invoices, and the completion and filing of VAT returns and listings, should be familiar with the new rules in time to implement new procedures and be fully compliant.

Jarl Moe
President
The TaxWizards