Lawyers on a Global situation

Lawyers on a Global situation

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U.S. taxpayers who failed to file disclosure forms were alerted by the U.S. Treasury on September 21, 2009 of a one-time extension of time to October 15, 2009 to comply with the special voluntary disclosure requirements of the Internal Revenue Service for Americans with unreported income from bank accounts situated outside the United States. As a result, after the deadline passed, many amnesty filings were made with the U.S. Treasury.
The total amount of tax, interest and penalties assessed and collected were so significant to the Treasury that another voluntary tax amnesty program and period would be offered with less favorable terms.According to the latest information from the U.S. Treasury, more than 15,000 amnesty filings were made on or before the 15th day of October 2009. The IRS and the IRS Commissioner, Douglas Shulman, disclosed that even after the above deadline, an additional 3,000 taxpayers came forward to be in compliance with America’s tax laws in relation to foreign bank accounts.
IRS Commissioner Shulman stated:
"As I've said all along, the goal is to get people back into the U.S. tax system. Combating international tax evasion is a top priority for the IRS. We have additional cases and banks under review. The situation will just get worse in the months ahead for those hiding assets and income offshore. This new disclosure initiative is the last, best chance for people to get back into the system.", "As we continue to amass more information and pursue more people internationally, the risk to individuals hiding assets offshore is increasing…This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all. And it gives people a chance to come in before we find them."
The voluntary amnesty program will be termed the "2011 Offshore Voluntary Disclosure Initiative" (OVDI) and, from what I have seen to date, will incorporate many of the items of the 2009 amnesty, both good and bad. Taxpayers participating in the new initiative must also file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties by the Aug. 31 deadline.

Tax specialists may make reference to a particular tax rule and continue to state that the rule had so many exceptions that it was like "the tail wagging the dog."
1. The above 25% penalty may be reduced to 5% in very special situations;
2. If your offshore accounts (and assets!) are less than $75,000 in any tax year from 2003 through 2010, then that year will face a reduced penalty from 25% to 12.5%. However, the tax, interest and accuracy related penalties will still apply in full, please see immediately below on the interest and accuracy related penalty.OVDI has increased the penalty to 25% of the amount in the foreign bank accounts in the year with the highest aggregate account balance while looking at a 7-year period, from 2003 through 2010. This 25% penalty will apply to most filers of the OVDI amnesty. In addition, amnesty filers will be required to accept and pay back any and all taxes, interest and accuracy related penalties with a total payoff of these taxes, and interest and penalties on or before the August 31, 2011 deadline.
3. As mentioned in the 2009 amnesty, the IRS continues to solicit compliance with the threat of "possible" criminal prosecution for taxpayers who do not come forward in the 2011 amnesty offering.
4. The 2011 initiative offers clear benefits to encourage taxpayers to come in now rather than risk IRS detection. Taxpayers hiding assets offshore who do not come forward will face far higher penalty scenarios as well as the possibility of criminal prosecution.

Lawyers facing internationalization

Growth-related factors seem to be a particularly important internal motivator among the SMEs investigated in these recent studies. This reflects the increasing appreciation of the growth opportunities associated with internationalization among this category of firms. It is interesting to note that in their quest for international market-led growth, SMEs increasingly seem to seek access and integration into the lucrative supply chains of international players. Another equally important endogenous motivation is the possession of critical resource factors, including knowledge resources and capabilities, by the investigated SMEs. Reflecting their status as social entities, SMEs are also motivated in their internationalization decisions by factors within their external environment, including networks and supply chain links, social ties, and the sector and region to which they belong. This appears to mitigate some of the resource-related impediments associated with SME internationalization (OECD, 2010). As noted by an example in a recent report, where Danish, Dutch, Finnish, Norwegian and Swedish enterprises form part of a global value chain and where these firms frequently gain business due to sourcing from abroad (Statistics Denmark, 2010). These resource-related factors typically take different forms, with those pertaining to managers‟ internationalization knowledge and firms‟ innovation, technological and relational capabilities seeming to be most influential. Of particular salience is the observed importance of firms sectorial and regional origin, as is the reported increasing relevance of network/social ties, and immigrant links in SME internationalization. These findings, indeed, raise the question of whether, and the extent to which, these drivers of SME internationalization behavior are factored into government support provision. The foregoing review of recent relevant evidence suggests the continuing relevance of both internal and external motivations for SME internationalization.

Knowledge-related Motives.

Recent research findings suggest that knowledge assets both push and pull SMEs into international markets.There are also related findings from a number of OECD countries (Sweden, Ireland, and Canada) and non-OECD economies (Chile, India and Indonesia) on the internationalization triggering effects of knowledge aspects, including R&D investment, innovation capabilities, unique product or technology, management, and language skills; and firm resource base, as indicated by such proxies as size, age, and experience. The push ‟dimension pertains to the importance of managers”previous international experience and related management capacity factors, as observed in studies among Canadian firms, Spanish firms, and Swedish firms. Search for knowledge assets may also pull SMEs into international markets, as suggested by Kocker and Buhl's findings that firms internationalize to obtain missing know-how required to maintain their lead in technological development.

Growth Motives.

Growth Motives.

Growth opportunities associated with international markets were identified as a key driver of firm internationalization in several recent studies. Orser et al. (2008), for example, reports say that after allowing for the impacts of firm size and sector, Canadian legal firms whose owners had expressed growth intentions were more than twice as likely to export, than those whose owners did not indicate growth ambitions. Firms‟ overseas venturing decision also seems to be motivated by a need for business growth, profits, an increased market size, a stronger market position, and to reduce dependence on a single or smaller number of markets. The possibility of growth in other markets and increased profit opportunities from international expansion were highlighted as key stimuli for exporting among the Australian, British, Spanish, Swedish, and US firms investigated in recent studies.

European Union Direct Taxes

Permanent Establishment is a vital concept in international taxation. While for direct taxes, it is mainly defined by the OECD Model Convention, the European VAT Directive and its implementing Regulation provide an EU-wide approach for VAT.
Difficulties arise as terminology and definitions in indirect and direct tax diverge. Moreover, countries have implemented and interpreted the EU and OECD rules in a different way, impacting on issues like cross-border reorganisations, transfer pricing, taxation of dividends and interest and royalties, tax residence, temporary and permanent transfer of assets, place of supply and VAT liability.
In both direct and indirect tax, the concept of Permanent Establishment has undergone very recent changes: The 2010 changes to the OECD Model Convention and Commentary, and in particular the new Art. 7, will be adopted in national law, as speakers from the Netherlands and Germany will report. The effect of the new definition on treaties with other countries will also be considered.
Some of this topic is addressed in the new book "European Union Direct Taxes", by the International Tax Professor Salvador Trinxet Llorca.
In indirect tax, the current more important issue is the practical consequences of the adoption of the Regulation implementing the EU VAT Directive in January 2011.

Internationalization of the SME

Other value adding features include the additional focus on motivations for SME internationalization ; the coverage of recently available documentation from economies involved in the OECD enlargement (Chile, Estonia, Israel, Russia, and Slovenia) and enhanced engagement process (Brazil, China, India, Indonesia, and South Africa); and the sub-national and sectoral insights offered on SME internationalization barriers, motivations and support programs.

This realisation was at the heart of the 2007 OECD-APEC study on Removing Barriers to SME Access to International Markets, which provided general findings on the major barriers to SME internationalization as perceived by SMEs and policymakers in OECD and APEC member economies. The need to obtain a greater depth of understanding and an updated view of the issues raised by the OECD-APEC study provided a raison d'être for this follow-up project.

 Internationalization and international entrepreneurship among small and medium-sized enterprises (SMEs) has remained a topic of considerable contemporary relevance, principally owing to the observed growth effects of cross-border venturing, and the demonstrated capacity of SMEs to drive economic development at national, regional, and global levels (European Commission, 2007).