Capital Tax Consulting

2011 Quality of Living Woldwide City Rankings

capitaltaxconsulting — Fri, 03 Feb 2012 08:16:00 GMT

Vienna has the best living standard in the world, according to the mercer 2011 quality of living survey. Zurich and Auckland follow in second and third position, respectively, and Munich is in fourth with Dusseldorf and Vancouver sharing fifth place. Frankfurt is in seventh, followed by Geneva in eighth, while Copenhagen and Bern share ninth place.

European cities represent over half the cities amongst the top 25 in the ranking.

This year, the survey separately identifies those cities with the highest personal safety ranking based on internal stability, crime levels, law enforcement effectiveness and the host countries’ international relations. Luxembourg tops this personal safety ranking, followed by Bern, Helsinki and Zurich- all ranked at number two. Vienna ranks fifth, while Geneva and Stockholm both rank sixth. Baghdad (ranked 221) is the world’s least safe city.

For the full article go to http://www.mercer.com/press-releases/quality-of-living-report-2011?siteLanguage=100

Updated German Country Profile

capitaltaxconsulting — Tue, 31 Jan 2012 10:18:45 GMT

Check out our updated German Country Profile for 2012 HERE

Ireland Presents New 2012 Budget Measures

capitaltaxconsulting — Mon, 30 Jan 2012 09:43:00 GMT

The Budget for 2012 was presented to the Parliament by the Minister for Finance on 6 December 2011. As expected there will be no change in the attractive 12.5% corporation tax rate. Mortgage interest relief continues to be available for house purchasers who purchase property before the end of 2012 but will no longer be available after 2012 and will be fully abolished by 2018. The standard rate of VAT is being increased to 23% (from 21%) from 1 January 2012. The Minister confirmed that there will be no further increase in the standard rate of VAT for the duration of this Government. Capital Gain Tax and Capital Acquisitions Tax rate shall increase to 30% and the Class A threshold will reduce to EUR 250’000. Household tax of EUR 100 per annum will be introduced and payable on 31 March. Deposit Interest Retention Tax (DIRT) will be raised by 3% to 30%. Stamp duty for non-residential property transfers will be reduced to a flat rate of 2% (from the current top rate of 6%) in respect of instruments executed from 7 December 2011. Stamp duty on residential properties will remain unchanged at 1% up to EUR 1 million and 2% thereafter.

Article taken from Capital Consulting's newsletter, Taxing Issues

World Cost of Living Rankings 2011

capitaltaxconsulting — Tue, 24 Jan 2012 13:17:00 GMT

Luanda in oil rich Angola continues as number one in the ranking as the world’s most expensive city. In fact the top six places remain unchanged from 2010 according to the latest Cost of Living Survey released in July from Mercer Human Resource Consulting, the global leader for HR and related financial advice. London drops just one place from 17th place to 18th. Karachi continues to be considered the world’s least expensive city.

The survey covers 214 cities across five continents and measures the comparative cost over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. New York is used as the base city and currency movements are measured in US dollars. New York has dropped from 27th place to 32nd.

New entries in the top 10 list are Singapore (8), up from 11, and Sâo Paulo (10), which has jumped 11 places since the 2010 ranking. Recent world events, including natural disasters and political upheavals, have impacted the rankings for many regions through currency fluctuations, cost inflation for goods and services and volatility in accommodation prices.

Interestingly the European cities have three out of the top ten most expensive cities compared with four from the previous year. Moscow remains the most expensive city in Europe with Geneva and Zurich following close behind. Switzerland still has three cities in the top ten ranked in Europe.

Australian cities have witnessed some of the most dramatic jumps in the ranking as the local currency has gained almost 14% against the US dollar. Sydney (14) is up 10 places whilst Perth has surged 30 places to reach 30th spot. A significant increase in rental prices has also pushed up the cost of Australian cities.

Top Ten World Ranking

2011 Ranking	City	Country
1	Luanda	Angola
2	Tokyo	Japan
3	Ndjamena	Chad
4	Moscow	Russia
5	Geneva	Switzerland
6	Osaka	Japan
7	Zurich	Switzerland
8	Singapore	Singapore
9	Hong Kong	China
10	Sao Paulo	Brazil

Top Ten European Ranking

2011 Ranking	City	Country
1	Moscow	Russia
2	Geneva	Switzerland
3	Zurich	Switzerland
4	Oslo	Norway
5	Bern	Switzerland
6	Copenhagen	Denmark
7	London	UK
8	Milan	Italy
9	Paris	France
10	St. Petersburg	Russia

Article taken from Capital Consulting's newsletter, Taxing Issues

US Passport Holders-Beware

capitaltaxconsulting — Fri, 20 Jan 2012 09:00:10 GMT

There was an interesting article in one of the Swiss local newspapers, Le Matin, on 11 December discussing a case of a Swiss citizen who faces a US tax bill of USD 145’000 for taxes (USD 105’000) and penalties/interest (USD 40’000) as a result of filing late his US tax declarations. The individual was born on US soil and spent only one month there before moving to Switzerland permanently. As a result of being born in the US he was granted a US passport, something that many individuals would pay considerable money for, but in his case ended up being a poisoned chalice. The individual did not realise that even as a non US resident without even a US social security number he was obliged to complete a US tax return when his worldwide earnings exceeded USD 86,600 per annum (current US exemption limit) and pay any extra taxes due to the US if applicable. This only came to light once he began the process of renouncing his US passport. This rule also applies to any US Green card holders who are not living in the US! So next time you see there is a public draw to win a Green card, think twice before you enter as it can bring potential unforeseen obligations!

Article taken from Capital Consulting's newsletter, Taxing Issues

Digital Banking to Increase Greatly by 2015

capitaltaxconsulting — Thu, 19 Jan 2012 07:49:01 GMT

Digital banking is set to overtake branch networks as the main way customers interact with their bank by 2015.This is according to a new PwC report 'The new digital tipping point', which suggests that banks are missing a vital new source of revenue growth as they have been too slow to respond to the digital innovations that have radically changed business models and redefined customer experience. This is despite strong demand for digital banking products from consumers and the fact they are willing to pay for these.

PwC conducted research with over 3,000 banking customers across nine developed and emerging markets and found that most consumers are willing to pay up to £10 a month for digital banking services if they believe they offer convenience and value. The research reveals that there is customer demand for innovative digital offerings such as social media notifications, an electronic wallet for loyalty cards and financial tools provided by banks and that these are the products consumers are most willing to pay for. In the UK, almost two thirds (65%) of respondents said they are willing to pay just over £4 a month for their bank to store loyalty card information and convert accumulated points into cash. This amounts to an annual fee income for banks of approximately £50 per customer.

Stephen Whitehouse, retail and commercial banking partner at PwC, said:

"Banks have generally been slow to embrace the digital innovation customers now expect from other industries, such as retail or travel. This needs to improve if banks are to hold on to their existing customers and attract the next generation, as the quality of a bank's digital offering will become an increasingly important factor for consumers.

"Despite customers' appetite for new and innovative digital banking offerings, and the fact they are willing to pay for these, the majority of banks still only provide basic mobile and internet banking services. Banks are clearly missing a trick if they don't start to invest in their digital offerings and only see digital as a way to reduce costs."The lack of investment is perhaps even more surprising considering banks are struggling to grow revenues at a time of increased regulation and a difficult economic environment. Digital products are a significant opportunity for banks to grow revenues and serve their customers in a way that they want."

The research reveals that more and more consumers are using online and mobile channels to access financial products. 69% of those surveyed said they currently use the internet to purchase financial products. While a lower number of respondents (33%) currently use mobile to purchase financial products, mobile banking is expected to follow a similar usage curve to internet banking, with China, India and the United Arab Emirates currently leading its adoption. In terms of customer profile, it is not surprising that Generation Y leads the way, with 67% of respondents saying they currently use or are considering using mobile channels for banking.

Matt Hobbs, retail and commercial banking partner at PwC, said:

"To grow revenues and combat high customer inertia, banks need to focus on attracting the next generation of customers – which will be largely made up of Generation Y and the unbanked population. For these customers, a bank's digital services will be more central to their decision-making process than branch location or even brand.

"Generation Y are now choosing their main banking provider and represent an important source of future value for banks. Banks need to take their digital products to the next level if they want to secure these customers as they expect a rich digital experience that is both mobile and social and integrates their banking needs with their digital lives. If banks are too slow off the mark, they risk being overtaken by new entrants or non-traditional financial services providers, who already place digital at the heart of their offerings."

Despite new technology opening up banking to a number of new players, there is little evidence to suggest that they will be successful in taking over the entire customer relationship from banks. The survey reveals that the majority of respondents (61%) still trust their banks over other providers to provide their current account. However, the report suggests that new entrants, such as mobile payment providers, will continue to act as a catalyst for change in the retail banking space. Banks may also need to partner with technology, mobile and other non-traditional banking providers in order to deliver the digital experience customers now expect.

Matt Hobbs, retail and commercial banking partner at PwC, said:

"The growth of digital has removed key barriers to market entry, including the need for large branch networks, customer inertia and brand trust. Because of this, banks need to consider strategic acquisitions or partnerships with digital innovators to secure their long-term position and market share. Incumbents in developing markets, where there is a larger share of unbanked consumers, will experience the greatest threat from new players if they do not improve their digital offerings.

Stephen Whitehouse, retail and commercial banking partner at PwC, said:

"The banks that provide a differentiated digital experience, with advice and relationship management elements tailored to the individual customer, will secure deeper engagement and more profitable relationships with their customers."

Story taken from www.pwc.com

Doing Business in Switzerland

capitaltaxconsulting — Mon, 16 Jan 2012 07:40:34 GMT

A recruitment company that wishes to provide services to clients in Switzerland needs to have a Swiss establishment that is registered in the Swiss register of commerce and it must obtain the licencesfor the Hiring of Services and for Private Placement Services. A company that makes available their employees’ services to another company unconnected with it is considered to be offering services for hire. A company that introduces job-seekers and hirers for the purpose of concluding a contract of employment is considered to be providing a placement service. According to the Federal Act on Employment Services and the Hiring of Services (AVG) of October 6^th 1989, the licences for these activities can be obtained from the competent cantonal authorities.

In order to obtain these licencesa number of conditions have to be fulfilled: the business must be registered in the Swiss Commercial Register, it must have suitable offices and it may not engage in any other activities which could be detrimental to the interests of the employees or the clients. The responsible managers must be Swiss or EU citizens or foreigners who already have a residence permit. They have to have a good reputation (no convictions, no bankruptcy, no outstanding tax liabilities etc) and the necessary professional skills. Samples of the client contracts and the employment contracts have to be handed in with the application. In the case of labourhire a deposit, usually in the form of a bank guarantee, has to be made to ensure that the employees’ wages can be paid. Depending on the number of hours of hiring per year and which licences are applied for, the deposit can be up to CHF 150’000. The licences are valid for hiring of services and permanent placements within Switzerland.

The application for the placement and hiring of services licences has to be made to the competent cantonal authorities. The licenceis not limited in time; it is in the name of the business and also stipulates the responsible person. Any changes have to be announced to the authorities and require an amendment. Every branch in another canton needs a separate licence. If the licences have been obtained by the use of misleading information or the concealment of important facts or if the company breaches the law repeatedly or seriously, the licences can be withdrawn.

The Law on Employment Services and the Hiring of Services has been put in place to protect the interests of temporary workers and has therefore closed the Swiss market down to non compliant structures. It is absolutely forbidden for a foreign labourhire company to hire out their employees direct to companies in Switzerland.

These laws also cover one man or contractor owned limited companies. If the sole owner and director of a limited company purports to provide independent services in Switzerland, but in fact fulfills certain criteria including but not limited to; taking direction from the Swiss client; being integrated within the Swiss company and not taking responsibility for any defects in the execution of his work, he is considered to be an employee of that Swiss company. He, therefore, has hired himself out illegally.

Article taken from Capital Consulting's newsletter, Taxing Issues

Hong Kong Remains World's Freest Economy

capitaltaxconsulting — Fri, 13 Jan 2012 08:43:08 GMT

For the 18th consecutive year, Hong Kong maintained its position as the world’s freest economy, according to the 2012 Index of Economic Freedom, published annually by The Heritage Foundation.

Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets.

Based on its aggregate score, each of 179 countries was classified either as: “free” (i.e. combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).

Hong Kong scored 89.9 on the 1-100 scale, highest worldwide. Singapore, which has ranked second all 18 years, scored 87.5. Australia and New Zealand ranked third and fourth, respectively, enabling the Asia-Pacific region to account for the four highest-ranked countries.

The world average score of 59.5 was two-tenths of a point below the 2011 average and the second-lowest score recorded over the past 10 years. Among the 179 countries ranked, scores improved for 75 countries and declined for 90. Others did not change.

Hong Kong’s score improved following a recent government plan to rebate excess revenue to citizens. However, Index editors expressed concern that recent policy changes in Hong Kong, particularly the implementation of a minimum wage, had “moved Hong Kong modestly in the direction of a more bureaucratic and politicized economy”.

Rankings for economic freedom in some countries, including the United States, declined following massive government spending initiatives. Other countries improved their scores with efforts to broaden tax bases, lower rates and combat inflation.

Asia Pacific, although home to the four highest-ranked countries, scored 57.5 as a region. Despite this improved score, Asia-Pacific finished fifth among the six geographic groupings surveyed. The gain over 2011 was helped by Taiwan, which scored higher in six of 10 categories of economic freedom measures, finishing at 71.9 for 18th place, ahead of Macau.

Overall, 27 of the 41 Asia-Pacific countries were classified as “mostly unfree” or “repressed.” Three of the 11 lowest-ranked countries are in the region, including North Korea, which, unsurprisingly, ranks as the world’s least-free economy. Rankings declined for China and Japan, the region’s two largest economies. China dropped because of state control of the economy; Japan because of increased government spending, in part a response to the earthquake and tsunami that afflicted the country.

The Heritage Foundation noted that Index results continued to demonstrate that when countries adopt policies leading to high scores, they also enjoy prosperity, economic security and success. In the United Nations’ assessment of what it calls poverty intensity, mostly free and moderately free countries have only a third the number of people in this position as do mostly unfree and repressed countries.

The top one-fifth of countries in advancing economic freedom grew at an average rate of 3.7%. The bottom fifth grew 2.1%.

story taken from www.tax-news.com

Taxing Issues - January 2012

capitaltaxconsulting — Tue, 10 Jan 2012 11:00:44 GMT

In this month's edition:

Irish Budget Measures
Doing Business in Switzerland
Mercer Woldwide Cost of Living Survey Highlights
Romania and Mexico country profiles

You can download this edition of Taxing Issues here.

To view this file you will need Adobe Acrobat reader.

Taxing Issues - October 2011

capitaltaxconsulting — Tue, 10 Jan 2012 10:58:31 GMT

In this month's edition:

Open Government Partnership
Economic News for Brazil and Chile
Developments in Mexicao and Columbia
Brazil and Chile country profiles

You can download this edition of Taxing Issues here.

To view this file you will need Adobe Acrobat reader.