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Romania: about the VAT

Alessandro PasutTaxable persons that have been de-registered for VAT purposes for not submitting the VAT returns for a period of six months or two consecutive calendar quarters may re-register for VAT purposes at any time, provided that they present the returns not submitted within the legal deadlines with a statement in which they undertake to file their future returns within the legal deadlines. If the supplier’s VAT code is cancelled, the beneficiary cannot deduct the input VAT starting the day following that on which the cancellation is performed in the Register of taxable persons. Taxable persons whose VAT code was erroneously cancelled by default are still regarded as taxable persons for VAT purposes, with the right to deduct input VAT. Persons erroneously registered for VAT purposes by the tax authorities are not obliged to invoice with VAT. In such circumstances, however, those persons have the obligation to pay the tax and their beneficiaries have the right to deduct the input VAT.

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Hungary: Corporate Income Tax

Alessandro PasutIn addition to the taxpayer, its related company may also deduct the direct costs of the taxpayer’s own research and development efforts from its pre-tax profit, in the proportion agreed between them. The tax base decreasing item may be applied, if the R&D activities carried out by the related company are related to both the taxpayer’s and the related company’s business activity, and the related company declares the direct costs of the research and development activities and the amount that may be used by the taxpayer. The parties will be jointly liable for the contents of the declaration, and both parties will have to provide information concerning the event in the corporate income tax returns.

The rules of loss carry-forward relating to transformations have been supplemented. In the case of a transformation, the legal successor may deduct the legal predecessor’s negative tax base from its profit before tax for the first time in the tax year that includes the day of the merger.

From 1 January 2014, when determining whether a company qualifies as an owner of real estate, the proportion of the assets/real estate shown in the financial statements must be calculated on the basis of the book values, instead of the market values.

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Bulgaria: the production and export of clothing and textiles revives

The production and export of clothing and textiles revives. According to the National Statistical Institute and Eurostat, Bulgarian export of clothing and textile marked growth in 2013. Last year export reached 1.8 billion euros – the highest level of Bulgarian exports since 2007. A 7-percent growth in export has been marked in comparison to 2012. Out of those 1.8 billion, export of textiles totaled € 328 million or about 18% of the total exports of the country.

Here is more from the President of the Bulgarian Association of Apparel and Textile Producers, Radina Bankova:
“Export of textiles and clothing is now going through another boom and is close to the strongest years before the crisis. European countries remain our traditional markets. We are glad that a significant recovery of the interest of these countries towards our production has been marked. A great number of major companies have been returning to Bulgaria because of its geographical location, traditionally good relations and technological capabilities of Bulgarian enterprises. Bulgaria’s biggest export market remains Germany, followed by Italy, France, Greece and Spain. Domestic consumption is relatively small. Although in 2013 a 25% rise was marked, it remains below the level of 10 percent of total production.”

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Croatia: Mercator has been sold to Croatian Agrokor Group

Slovenian retail chain Mercator has been sold to Croatian Agrokor Group, according to reports today by the Croatian media citing the announcement of the Slovenian news agency STA.

Trade consortium of majority shareholder of Mercator concluded the agreement with Agrokor Group to sell 53% of Mercator shares, priced at 86 euros per share. In recent weeks, there were increased pressures of certain political and other circles so that the contract wouldn’t be realized.
NLB (New Ljubljana Bank) as a bank, which is 100% owned by the Slovenian state has about 10% of Mercator shares.

Mercator and Agrokor confirmed today that all the conditions for the conclusion of the transaction were fulfilled so that the majority stake in Slovenia’s retail chain can be sold to the largest Croatian food Group. The agreed price per share is 86 euros, meaning that Agrokor for a majority stake in Mercator will have to pay 172 million euros. Agrokor will also make a capital increase in Mercator with 225 million euros, of which 200 million will go to pay off the debt, and 25 million for operating capital.

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Coindu open a new factory in Romania

The portuguese company Coindu that produces textiles for the audio industry is planning to open a new factory in Drobeta Turnu Severin, according to local authorities and is about to start a hiring campaign.
What will be a €10 million investment is expected according to company officials to create 1,200 new jobs, bringing the total number of employees Coindu has in the country to 2,200. The currently owns a factory in Curtici, in Arad county.
Coindu Romania SRL plans to hire 450 employees in 2014 with the prospect of hiring another 800 in 2015, according to what Drobeta Turnu Severin’s deputy mayor, Marius Screciu, quoted as saying to Agerpres newswire.
The factory will be built on a 4.5 hectare area the company has bought in Drobeta Turnu Severin and is expected to cost €10 million, with the municipality agreeing to provide utilities for the new industrial platform.

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Albania: annual inflation

Prime Minister Edi Rama says that clear signs of the improvement of the situation are coming. “In little less than 300 days, we have given the right messages and signals, but this is only the start and we must not forget this”, says he.
Two days ago, the Steering Committee of the Bank of Albania declared that the economy is gradually growing during the year, doing slightly better in the second half. Nevertheless, the increase of aggregate demand will remain under the potential of economy even during 2014, thus defining a gradual turn of inflation toward the objective. The Steering Committee decided to keep the base interest rate unchanged at 2.50%.

Governor of the central bank, Ardian Fullani says that annual inflation saw a slight fall at the end of May.
According to Fullani, the data on the month of June indicate that consumption and investments haven’t changes, while budgetary expenses were 7.5% lower than a year ago.
Exports in April went up by 10%, while lending for the private sector in the same month was 2.4% lower than a year ago.

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Austria: the assessment base in the event of the union of all shares of a company

Regardless of the kind of beneficiary, the triple amount of the appraised value of the property will remain the assessment base in the event of the union of all shares of a company possessing real property in the hands of one person only.

The tax for the transfer of agricultural and forested property will be assessed from the amount of the appraised value. In the case of a transfer of a company without consideration, a tax allowance amounting to 365.000 euro will be applied.

Finally in case of the reorganization of a company the double amount of the appraised value of the property will apply. As of 1 June 2014 the transfer of real property not subject to the Law on company reorganization will not benefit from any relief. Thus especially in case of contributions in kind to a corporation or a partnership consisting in real property, the tax will be calculated on the basis of the current market value.

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Austria: Amendment to the real property transfer tax law

In November 2012 the Constitutional Court had stated in a finding that the determination of the real property transfer tax law based on the unitary value is not compatible with the Austrian constitution and declared this method as obsolete. At the same time the Court invited the Government to amend the law by 31 May 2014.

Following up on the Court’s decision the Government has recently published a draft expert opinion pertaining to the Act amending the law on the real property transfer tax. Previously the base for calculating this tax was the consideration (i.e. the sales price). In the event where no consideration was paid, such as in the case of donations, inheritance or contribution of assets to a company, the triple amount of the appraised value of the property was applied.

The new rules envisaged in the Government draft make a distinction between purchase within and outside of families. In the new draft the term “family” has been extended. In the event of purchases without consideration within a family, the tax will be calculated based on the triple appraised value of the property which anyhow can amount only to 30% of its current market value. In the event of a transfer of property without consideration outside a family, from 1 June 2014 the tax will be calculated based on the current market value.

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Austria: Expected changes to the tax law

At the end of January the Council of Ministers approved a draft amendment to the tax law. The respective discussion in Parliament should be completed by the end of February.

With reference to the group taxation scheme, the draft states that from 1 March 2014 onwards an Austria tax group will be able to have only foreign corporations as members residing in an EU member state or with comparable corporations in third countries with which Austria has concluded a double taxation treaty or a comprehensive administrative assistance agreement.

Members of the Austrian tax group resident in third countries not meeting these requirements may remain group members until December 2014 and will automatically be excluded from the Austrian tax group on 1 January 2015.
As of 2015, such foreign losses can be offset only up to 75% against the overall income of all domestic group members and the group parent. The remaining current foreign losses have to be added to the tax loss carried forward of the group parent and can be offset against the future group income.

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Bulgaria: transactions between local and foreign persons

An ordinance of the Bulgarian National Bank (BNB) on the Balance of Payment Statistics, International Investment Position and Securities Statistics was promulgated in March. It introduces some changes in the regime of reporting and statistical declaration of transactions concluded between local and foreign persons.
A major difference from the previous regime is the need for statistical declaration of each account opened abroad by a local person and not only of accounts opened in relation to financial loans which have been granted.
Operations on, balances and other changes in the amount of a financial loan, received by or granted to a foreign person, should be reported to the BNB using quarterly statistical forms only in the event that at the time of the declaration or as of 31 December of the year preceding the reporting, the amount of the loan is equal to or larger than BGN 500,000 or its foreign currency equivalent.

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