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Donka Pechilkova According to the prognosis of the World Bank, Bulgarian GDP will grow in 2014 by about 1.7%. The analysis goes even further as the forecast for the coming year suggests an estimated increase of 2.4% in 2015; and up to 2.8% growth in 2016. As a comparison, at the beginning of the year the expectations were that the Bulgarian GDP will increase by 2%. The report is in alignment with the opinion of the European Commission and is slightly higher than the forecast of the International Monetary Fund. In the report, Bulgaria is listed in the sub-region of the developing countries from Central and East Europe, along with Albania, Romania and Serbia. The expectations are that the economies of these countries will increase mainly by realising higher export levels mainly to Western Europe, even though this index recorded a drop during the past 12 months. Exporting is the main index that could increase the GDP of the developing countries, due to several reasons such as the politically unstable situation in the region; the high rate of unemployment and the fragile bank systems. Another destabilising factor is the tension between the EU and Russia. Additionally, there is the risk that the growth of the Bulgarian economy will be prevented by both the ageing of the population and the emigration of the younger population. Also, according to the World Bank there are no significant reforms that could increase investments into Bulgaria.

India has announced the adoption of IFRS converged standards for financial reporting and tax accounting standards for the computation of taxable income. Sai Venkateshwaran, partner and head of the accounting advisory services group at KPMG in India analyses the impact and challenges of these announcements.

New Zealand has had a general anti-avoidance rule (GAAR) since income tax was first introduced in 1891. But in the past decade, changes in Inland Revenue practice and judicial attitudes have seen the GAAR, which was previously considered applicable only to highly artificial tax avoidance schemes, become probably the most broadly applied GAAR of any country in the world. Russell McVeagh’s Tim Stewart tracks this trend.

Christof Letzgus On June 12 2014, the ECJ issued a ruling in three joined cases on the Dutch fiscal unity regime. It held that the legislation allowing members of a tax group to consolidate their results must include local sub-subsidiaries of non-resident intermediate parents (vertical relief) as well as associated companies held by a common parent in another member state (horizontal relief). The cases did not deal with the use of final losses, and the taxpayers did not seek cross-border loss relief but only the consolidation of profits and losses between Dutch corporations.

The US Supreme Court is mulling over whether or not to hear WorldCom Inc v. Internal Revenue Service (13-1269), a case that holds the now-obsolete WorldCom (Verizon Communications) liable for millions in excise taxes for its telecommunications services.

Read this month's special features on Brazil and Tax technology

Elena Kostovska Until July 1 2014, the FYR Macedonian tax system recognised three types of VAT taxpayers depending on the VAT period applicable to them. Based on the annual turnover of taxpayers, the tax authority used to classify companies as either monthly, quarterly or annual taxpayers. As of July 2014, the calendar year as a VAT period is abolished and all annual taxpayers are now considered as quarterly taxpayers. In light of the above change, companies that are transformed from annual to quarterly VAT taxpayers are now obliged to submit quarterly VAT returns starting from the third quarter of 2014 (the return for which is due October 25 2014). For the first six months of 2014, these companies were liable for submission of a combined return for the first two quarters of 2014 (effectively for the period January 1 to June 30), due by July 25 2014.

HM Revenue & Customs (HMRC) has announced new measures to dissuade taxpayers from using avoidance schemes which involve the transfer of corporate profits. Taxpayers will need to familiarise themselves with the new measures and review their company’s arrangements to ensure they are not caught out.

A recent case involving Motorola Solutions India has shown taxpayers a way forward in the use of the capital asset risk pricing model for carrying out risk adjustment.

A new strategy and action plan aimed at developing better customs risk management has been approved by the EU Commission.