ITR Search | International Tax Review

Big four spared in SEC guidelines

Alenient Securities and Exchange Commission (SEC) has granted the big four permission to provide tax services to audit clients into the foreseeable future. Results of the US organization's January 22 open meeting on auditor independence indicate that accounting firms will not have to restructure operations and can continue providing tax services to audit clients with few limitations. The results shift the burden of deciding what is and what is not a permissible service to the company's audit committee.

February 01 2003

Big four turn to China

With China gradually opening up its market and joining the World Trade Organization, demand for tax advice is booming in the mainland. In the last month alone Ernst & Young (EY) has boosted its China tax practice with five partners and intends to triple its tax group in the next three years. The big four firm has relocated four partners from its Hong Kong office including Stephen Lau Sing-hung, the firm's chair of tax services in China and Alfred Shum with Shum going to Shanghai and Lau moving to Beijing.

February 01 2003

Group relief for European losses rejected

The Special Commissioners have recently denied Marks & Spencer the right to obtain group relief in respect of losses incurred by certain European subsidiary companies in Belgium, France and Germany and have declined to make a reference to the European Court of Justice (ECJ) (Marks & Spencer plc v David Halsey (HM Inspector of Taxes) (Special Commissioners 352) December 17 2002).

February 01 2003

How finance directors should deal with VAT

At the end of the financial year, value-added tax is likely to be on tax directors' minds around the clock. In the process of preparing the annual return, several VAT items are to be examined, the last quarterly declaration has to be drawn up and possibly provisions formed. These tasks require a series of steps, which in practice often are not considered or not dealt with systematically. Among others, the last quarter VAT return includes the following steps:

February 01 2003

Chief Executive seeks to boost revenue

On January 8 2003 the Chief Executive of the Hong Kong Special Administrative Region, Tung Chee Hwa, delivered his policy address. He foresaw that the Hong Kong government US deficit for the fiscal year 2002-03 might exceed HK$70 billion ($9 billion). The government will adopt a three-pronged approach to eliminate the deficit and arrive at a balanced budget in 2006-07. They are boosting economic growth, cutting public expenditure and raising revenue.

February 01 2003

Bush axes dividend tax

President George W Bush has proposed legislation abolishing tax on dividends. The legislation would remove the double taxation which dividends face today and make equity financing more attractive to companies. He faces a struggle to get the package passed as both Republicans and Democrats have problems with the $364 billion cost and the distribution.

February 01 2003

Ireland raises VAT

From January 1 this year the supply of certain goods and services in Ireland has been raised to 13.5% from a previous rate of 12.5%. The goods include fuels such as electricity and oil as well as immovable goods and printed matter. Affected services include the provision of hotel and guesthouse accommodation, restaurants, cinema and theatre tickets and sports facilities.

February 01 2003

Cable & Wireless sets aside tax reserve

Telecoms company Cable & Wireless has ploughed £1.5 billion ($2.4 billion) of its diminishing £2.2 billion cash reserves into an escrow account. The money will be used to cover a potential tax liability that may come from the 1999 sale of mobile phone company One2One to Deutsche Telekom.

February 01 2003

EC takes Spain to the ECJ

The European Commission has referred Spain to the European Court of Justice (ECJ) over its discriminatory capital gains tax regime. The EC thinks Spain's refusal to change legislation giving more favourable capital gains tax conditions to shares traded on Spanish stock exchanges is against EU treaties for freedom of movement and capital.

February 01 2003

European accounting body elects new president

The Fédération des Experts Comptables Européens (FEE) has appointed David Devlin as its new president. Devlin replaces Görab Tidström and will hold the role for a two-year period.

February 01 2003

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