Tax Stories: Life, Business & Tax

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Apsargs

Edgars Zālītis ir G4S Latvia vadītājs vairāk kā 16 gadus, pirms tam 7 gadus vadīja Shell gan Latvijā, gan Krievijā. Cilvēks ar matemātiķa un ‘ārpus kastītes’ domāšanas stilu. Golferu aprindās viņu sauc par Apsargu. 

Inovācijas, lai uzlabotu lietas

Interesanti stāstot par saviem hobijiem - tenisu, NBA Fantasy, skriešanu un golfu, Edgars izmeta pa kādai filozofiskai frāzei. Piemēram, ka golfa noteikumu zināšana reizēm palīdz arī uzlabot spēles situāciju un visa dzīve jau ir par to, kā kaut ko uzzināt jaunu, lai uzlabotu lietas. Te, ja kas, ir links uz Edgara ieteikto golfa Meku Mission Hills Ķīnā[1] un te[2]. 

Labāk dūmu detektors, kā signalizācija

Parunājām arī par drošību, gan ģeopolitiskās situācijas, gan mūsu mājokļu kontekstā? Daudz svarīgāk ir uzlikt dūmu detektorus, nekā signalizāciju. Ja kaut ko nozags, tad var nopirkt vēlreiz to pašu. 

Ķer ķirsi, kad tas kritīs

Nākamā spārnotā frāze no Edgara bija - jābūt gatavam noķert ķirsi tad, kad tas kritīs. To Edgars minēja, kad runājām par nokļūšanu G4S vadītāja amatā. 

Vaļka Stakan un 2 veļasmašīnas nodokļu inspekcijai Pēterburgā

Pirms tam bija Shell Krievijā laiks ar fascinējošu stāstu par Edgara darba uzsākšanu Pēterburgā, Shell birojā, kas bija ierīkots guļamrajona pagrabiņā. Darbs tur sākās ar nodokļu inspekciju, kas lika manīt, ka ar 2 veļasmašīnām varētu atrisināt inspekcijas jautājumu, taču starptautisko kompāniju politika nepieļāva jebkādu kukuļošanu. Arī te risinājums nāca dēļ Edgara nestandarta domāšanas veida. Kāds? Un kas ir Vaļka Stakan un kāds viņai sakars ar Volodju no Pēterburgas? Un kur pazuda akcīzes nodoklis Krievijā svētkos starp 1. un 15.janvāri? Tad jāpaklausās pašu sarunu. 

3 šķīvji

Runājot par biznesa un līderības principiem, Edgars mēģina kā cirkā žonglēt, lai visu laiku 3 šķīvji nenokrīt zemē un nesasitās – klienti, darbinieki un akcionāri. 

Kādēļ Indexo?

Runājām arī, kādēļ radās Indexo un kādēļ Edgars bija viens no tās dibinātājiem. Edgars nepretendē uz precīzu datu atcerēšanos, bet viņš atminas, ka sākotnēji ap 20% no banku peļņas radās no 2.pensiju līmeņa komisijām. Pie reizes parunājām arī par to, kur vispār labāk investēt šajos pārmaiņu laikos.

Kas traucē nodokļu sistēmā Latvijā? 

Viennozīmīgi – tas, ka daudzi konkurenti nemaksā. To piemin daudzi lielie uzņēmumi. Paliek labāk, bet nav vēl labi. Tomēr velkot paralēles ar nodokļu džungļiem ASV, Edgars liek noprast, ka pie mums nemaz ar to nav tik slikti. Ar to sarežģītību, gan, pie mums vēl tāls ceļš ejams, uz ko norāda 2x mazāks grāmatvežu skaits Igaunijā. Sarežģītības dēļ arī cilvēkiem zūd motivācija maksāt nodokļus. To pašu nodokļu summu varētu valsts iegūt ar vienkāršāku sistēmu un mazāku administrēšanu. No Lielbritānijas varētu paņemt, ka tur ieņēmumi līdz GBP 12k gadā ar IIN neapliekas. 

Lai pašvaldības ar IIN konkurē!

Labu ideju Edgars aizņēmies no Dānijas, kur pašvaldībām dota rīcības brīvība ieviest IIN likmi (no – līdz ietvaros) pēc saviem ieskatiem. Tad tās savā starpā arī konkurē par cilvēkiem, kas tām maksā IIN. 

[1] https://missionhillschina.com/en/

[2] https://en.wikipedia.org/wiki/Mission_Hills_Golf_Club

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Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

Marius is a founder of Schwarzthal Tech, a Fintech start-up providing disruptive KYC solutions empowered by Artificial Intelligence for tackling financial crime by making it generally affordable. He has published 4 books, the book that interests the tax world the most is called VAT Fraud[1]. Marius also starred in 4 TV documentaries about financial crime, and a movie Lords of Scam[2] about VAT fraud with CO2 emissions, on Netflix. He is an associate professor of finance with Dauphine University (FRA), and has a PhD in mathematics from Paris Sorbonne University.

Co2 fraud – VAT fraud – tax fraud

Marius started his studies in tax with VAT fraud cases while trading with CO2 emissions, then expanding his work to VAT fraud in general and now – tax fraud and financial crime in general. People are creating nowadays sophisticated networks with a purpose of hiding money, so his firm is helping anyone to detect the networks, primary clients being banks and lawyers. Their approach is KYN (know your network), not KYC. Despite all the AI capabilities by some of the brightest minds in the profession it sounded like it will be impossible for a long time to detect the criminal networks of those who proactively hide their funds, like the war criminal Putin. 

Solutions 

We also discussed several measures how to make the world a better place. One of them was related to inter-connection of data bases of the tax authorities and between the public registers within the EU, to start with. Regarding evaluation if a UBO registered as such or is just a nominee the controlling authorities should evaluate if the person had capabilities to earn all the wealth registered on his/her name. There was a Cyprus law firm officially controlling most the Russian elite properties in London. So, compliance officers especially in banks should better look at transactions within the company in order to determine who the real (economic) UBO is. 

How VAT fraudsters choose the country? 

Several aspects are behind typology of VAT fraud. First, the higher VAT rates the more the country attracts fraudsters. Second, the business profile of the country impacts the fraud. For example, Germany makes a lot of VAT refunds which makes it easier for the fraudsters to defraud the refunds. Third, where the levels of corruption are higher it’s easier to infiltrate into the tax authorities. Marius thinks that for sure bigger companies are usual targets for the fraudsters, either without being aware of it or by criminals infiltrating into those companies. 

What’s wrong with the tax authorities?

The authorities normally go after the low-hanging fruit – companies involved in the fraud not the fraudsters themselves. Marius thinks the main problem is wrong KPIs the authorities measure. The authorities should be passionate about fighting the crime, not so much focusing on reaching a pre-determined number of fraud cases detected. The agencies should work more like NGOs – inspired by a cause to fight the crime. It requires a change in culture, mentality. Only then businesses will start trusting the agencies. They need to do the right thing regardless of the immediate results! 

Why the Lords of Scam movie on Netflix is not the way how the fraudsters work?

People committing the fraud are decentralised and rational. They calculate the risks and go for the crime where they are ready to take the risk, by even who and how much would need to spend in prison, if caught. All the facts happen quickly, within 2-3 months – they find and structure companies in a dozen countries, find the accountants, open bank accounts, do the VAT registrations, learn how the trading in the specific business area works.

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

During an interview it is often like in golf – in the first 10-15 minutes it is possible to understand quite clearly if you have a connection or don’t. With Allison, a tax law professor who is named one of the “Global Tax 50” most influential individuals in international taxation, it was easy and fun to discuss such topics like:

• Social media[1];
• Her drawings on RedBubble[2];
• Movies containing tax aspects[3];
• A tax story Allison would like to make as a cartoon;
• Why did Allison move from law firms to academia and how to keep hands on the business practice at the same time;
• Break Into Tax YouTube channel[4];
• Her new book - Tax Cooperation in an Unjust World that you can buy here[5] and here is a summary of the book main ideas[6] - on an equal division of the benefits between the countries involved, so the majority of the benefits doesn’t just go to the rich countries;
• On ideas how the tax world can help Ukraine, on UBOs of properties and Pillar2, tax on speculative foreign ownership, AML checks for the Golden visa source money.

[1]https://www.allisonchristians.com/

[2]https://www.redbubble.com/people/drbombtaxstic/shop

[3]https://www.allisonchristians.com/tax-law-in-film-and-tv

[4]https://www.youtube.com/channel/UCGEYoF757EOl-FXi0iyuqOw

[5]https://www.amazon.com/Cooperation-Unjust-World-Allison-Christians/dp/0192848674

[6]https://www.taxnotes.com/featured-analysis/harnessing-momentum-fairer-international-tax-system/2022/02/18/7d6gj?highlight=Allison%20Christians

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

First, here are the details for the donations. Illya confirmed that these donations will safely go to the most pressing needs currently in Ukraine.

• Come Back Alive Foundation (can de donated in cryptocurrencies as well)
• Support the Armed Forces of Ukraine via National Bank of Ukraine 
• Particular project – fit-out of the already built multi-apartment house to accommodate refugees. 

Second, I thought it’s important to catch up the situation within the war zone, so we all better understand what’s going on there, and clear some questions hanging in the air, like: 

• what are the most pressing needs now in Ukraine;
• now donations in crypto might be totalling EUR ~100m – is this a good way of donating; 
• how might Russians and Ukrainians live in the same world after the war ends;
• might the war expand to Europe;
• are there good Russians still to have business with – where to draw the line;
• is drinking a Latvian company-produced Solichnaya vodka a Russian business;
• should we deny help to people and companies running away from the Putin regime;
• how does the law firm and businesses in general function nowadays in Ukraine;
• about the economics in general - what can be preserved and restored, and what is irreversibly damaged;
• about the single tax regime of 2% of turnover (the only tax payable now by any businesses), if the turnover does not exceed a bit above EUR 300m, and is there a chance of having something like this permanently (I’ve always been hoping for such simplified tax system permanently, so I can finally go and do something more meaningful).

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

Illya Sverdlov 

Illya was a tax partner at DLA Ukraine. He still would be there, but DLA a year ago announced it leaves Ukraine. So, Illya with all the tax team moved to Kinstellar law firm, which is a Tier 1 firm in tax in Ukraine by Legal 500 directory. 

Politics 

While the media mostly talks of the potential war in Ukraine, Illya feels quite confident that everything politically is more or less stable, considering the circumstances. People are not panicking and feel more prepared than during the previous conflict with Russia in 2014. Then Ukraine had a mobilisation of all men, whereas now it has not happened so far. Nevertheless everybody checks in to the military units and even takes some shooting practice. 

Business

There is no downturn, quite on the opposite. The investments have not stopped, nor are exiting. The corruption situation is also getting better since 2014 reform. The scale of the grey economy has been reduced as well lately. I could feel that the politics and business in general were not comfortable topics for Illya right now as there is so much uncertainty. But the tempo of the discussion changed once we switched to tax.

Tax

Ukraine as of 2022 has introduced CFC rules. The place of effective management and the beneficial ownership rules may require foreign companies with management in Ukraine to restructure. Foreign holding companies through the foreign tax authorities now receive long lists of very detailed questions from the Ukrainian authorities in order to determine, if the cross-border taxation was correctly applied. The Ukrainian authorities are getting smarter. The corporate structure should be as simple as you can explain to a child. Either one should create substance in the foreign company or close it.

One of the best tax systems for IT companies

“One of the world’s best tax systems is now available for small startups as well as big IT companies at any location across Ukraine,” said Minister for Digital Transformation Mykhailo Fedorov[1].IT companies in Ukraine as of 2022 can pay either 18% corporate tax or pay no CIT until distribution of profits when 9% CIT is applied. Salaries of employees of such companies are taxed at 6.5% income tax, and the social contributions are capped at just USD 50 a month. At least USD 1200 salary should be paid to the employees and the company must have at least 9 employees. Now it seems at least as competitive as the tax system in the High Technology park in Belarus. 

Purple cow is having no purple cow

Illya thinks the best marketing of a tax advisor is recommendation once the firm has done a good job and the client is happy, as tax lawyers are handling very delicate matters of their clients. 

[1]Over 50 IT companies join Ukraine’s ‘special tax regime’ Diia City in first three days (as of 11.2.22.), incl. Revolut:

https://kyivindependent.com/tech/over-50-it-companies-join-ukraines-special-economic-zone-diia-city-in-its-first-days/

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

Vēlaties zināt vairāk? Lasiet Jāņa Taukača ⁠⁠⁠nodokļu blogus⁠⁠⁠ vai ⁠⁠⁠risiniet te nodokļu strīdus, vai vēl labāk - plānojiet te savus nodokļus laikus, lai šādu strīdu nebūtu⁠⁠⁠.

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

Would you like to know more? Feel free to read ⁠⁠tax blogs⁠⁠ by Janis Taukacs or ⁠⁠resolve here any tax disputes, or even better - plan your tax matters here timely, so you can avoid such disputes⁠.

Giving back to the community

I had a lot of respect for my guest right at the start of the conversation when they told about their community work they do besides the work. How many of us can tell that one is at the board of a school or sponsoring a football club (Green Eagles)? 

On happiness and motivation

It appears the tax lawyers in Africa are not that different from the ones in the other continents – the are happy, if they make other people happy, and they get pumped up to do more by getting energy back from the ones they are helping – a golden circle of energy. Also teaching at a university, family support, client success due to a tax advice are some of the proof of the circle. 

African literature suggestion

If you are a bit tired of the Western literature, a valuable suggestion by Edward for your reading table was Ngũgĩ wa Thiong'o from Kenya who wrote many of his books in English. Edward suggested to start with a book Petals of Blood. The Goodreads page has an inrigueing description of the book: “..as the intertwined stories of the four suspects (of a tripple-murder) unfold, a devastating picture emerges of a modern third-world nation whose frustrated people feel their leaders have failed them time after time. First published in 1977, this novel was so explosive that its author was imprisoned without charges by the Kenyan government. His incarceration was so shocking that newspapers around the world called attention to the case, and protests were raised by human-rights groups, scholars, and writers..”. 

For the rest of the description of the episode please click here:  https://www.linkedin.com/pulse/africa-rising-janis-taukacs/?published=t&trackingId=8JfzkLEmQ0mMoG4v0cWaDA%3D%3D  
 

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit