Among others we covered the following topics. Lobbying the right things only.Has Christian made a family tree? Any relations in the family to cheese making? Why did Christian go against his father’s (also a lawyer) wish not to study law? And why tax law?What makes Christian happy? Why Christian hates Twitter and business books?Christian told about his podcasting experience (in German) – it is available here: https://open.spotify.com/show/2hWBK0xOAmVhR5003nFPj7?si=d04c24fb0c154c7bWhat Siemens products does he have at home?What is now going on at Siemens with all the virtual madness – NFTs, virtual currencies, metaverses, AI, robots?How does the Russian war in Ukraine impact the work? How does ESG affect the business of Siemens?WTS international tax network originated from Siemens tax dptm. How does Christian see pros and cons of WTS comparing to Big4s? How does a great external tax advisor look like? IFA Germany this year is hosting the global congress this September (gathering ~2k tax professionals from around the world). Christian gave us a great teaser for those still considering if to go.Of course, there was a short tax related story as well.We also spoke about a German village Norderfriedrichskoog, which for some 10 years until 2004 did not apply local business tax. (BTW, if anyone would like to practice longer German words, please have a look at this video of Christoph Waltz Gives Jimmy Fallon a German Words Quiz: https://youtu.be/F0jr-HQeT74)How much in reality business decisions at Siemens, but also within multinationals in general are taken based on tax incentives or loopholes? Does Christian think it’s possible to reform the tax systems so they become really simple? And, like all the guests, also Christian gave his version of meaning of life. 

Among others we covered the following topics. <ul><li>Lobbying the right things only.</li><li>Has Christian made a family tree? Any relations in the family to cheese making? </li><li>Why did Christian go against his father’s (also a lawyer) wish not to study law? And why tax law?</li><li>What makes Christian happy? </li><li>Why Christian hates Twitter and business books?</li><li>Christian told about his podcasting experience (in German) – it is available here: <a href="https://open.spotify.com/show/2hWBK0xOAmVhR5003nFPj7?si=d04c24fb0c154c7b" rel="nofollow" target="_blank">https://open.spotify.com/show/2hWBK0xOAmVhR5003nFPj7?si=d04c24fb0c154c7b</a></li><li>What Siemens products does he have at home?</li><li>What is now going on at Siemens with all the virtual madness – NFTs, virtual currencies, metaverses, AI, robots?</li><li>How does the Russian war in Ukraine impact the work? </li><li>How does ESG affect the business of Siemens?</li><li>WTS international tax network originated from Siemens tax dptm. How does Christian see pros and cons of WTS comparing to Big4s? </li><li>How does a great external tax advisor look like? </li><li>IFA Germany this year is hosting the global congress this September (gathering ~2k tax professionals from around the world). Christian gave us a great teaser for those still considering if to go.</li><li>Of course, there was a short tax related story as well.</li><li>We also spoke about a German village Norderfriedrichskoog, which for some 10 years until 2004 did not apply local business tax. (BTW, if anyone would like to practice longer German words, please have a look at this video of Christoph Waltz Gives Jimmy Fallon a German Words Quiz: <a href="https://youtu.be/F0jr-HQeT74" rel="nofollow" target="_blank">https://youtu.be/F0jr-HQeT74</a>)</li><li>How much in reality business decisions at Siemens, but also within multinationals in general are taken based on tax incentives or loopholes? </li><li>Does Christian think it’s possible to reform the tax systems so they become really simple? </li><li>And, like all the guests, also Christian gave his version of meaning of life. </li></ul>

Christian Kaeser (Siemens, Germany) – on integrating virtual and physical worlds

ApsargsEdgars Zālītis ir G4S Latvia vadītājs vairāk kā 16 gadus, pirms tam 7 gadus vadīja Shell gan Latvijā, gan Krievijā. Cilvēks ar matemātiķa un ‘ārpus kastītes’ domāšanas stilu. Golferu aprindās viņu sauc par Apsargu. Inovācijas, lai uzlabotu lietasInteresanti stāstot par saviem hobijiem - tenisu, NBA Fantasy, skriešanu un golfu, Edgars izmeta pa kādai filozofiskai frāzei. Piemēram, ka golfa noteikumu zināšana reizēm palīdz arī uzlabot spēles situāciju un visa dzīve jau ir par to, kā kaut ko uzzināt jaunu, lai uzlabotu lietas. Te, ja kas, ir links uz Edgara ieteikto golfa Meku Mission Hills Ķīnā[1] un te[2]. Labāk dūmu detektors, kā signalizācijaParunājām arī par drošību, gan ģeopolitiskās situācijas, gan mūsu mājokļu kontekstā? Daudz svarīgāk ir uzlikt dūmu detektorus, nekā signalizāciju. Ja kaut ko nozags, tad var nopirkt vēlreiz to pašu. Ķer ķirsi, kad tas kritīsNākamā spārnotā frāze no Edgara bija - jābūt gatavam noķert ķirsi tad, kad tas kritīs. To Edgars minēja, kad runājām par nokļūšanu G4S vadītāja amatā. Vaļka Stakan un 2 veļasmašīnas nodokļu inspekcijai PēterburgāPirms tam bija Shell Krievijā laiks ar fascinējošu stāstu par Edgara darba uzsākšanu Pēterburgā, Shell birojā, kas bija ierīkots guļamrajona pagrabiņā. Darbs tur sākās ar nodokļu inspekciju, kas lika manīt, ka ar 2 veļasmašīnām varētu atrisināt inspekcijas jautājumu, taču starptautisko kompāniju politika nepieļāva jebkādu kukuļošanu. Arī te risinājums nāca dēļ Edgara nestandarta domāšanas veida. Kāds? Un kas ir Vaļka Stakan un kāds viņai sakars ar Volodju no Pēterburgas? Un kur pazuda akcīzes nodoklis Krievijā svētkos starp 1. un 15.janvāri? Tad jāpaklausās pašu sarunu. 3 šķīvjiRunājot par biznesa un līderības principiem, Edgars mēģina kā cirkā žonglēt, lai visu laiku 3 šķīvji nenokrīt zemē un nesasitās – klienti, darbinieki un akcionāri. Kādēļ Indexo?Runājām arī, kādēļ radās Indexo un kādēļ Edgars bija viens no tās dibinātājiem. Edgars nepretendē uz precīzu datu atcerēšanos, bet viņš atminas, ka sākotnēji ap 20% no banku peļņas radās no 2.pensiju līmeņa komisijām. Pie reizes parunājām arī par to, kur vispār labāk investēt šajos pārmaiņu laikos.Kas traucē nodokļu sistēmā Latvijā? Viennozīmīgi – tas, ka daudzi konkurenti nemaksā. To piemin daudzi lielie uzņēmumi. Paliek labāk, bet nav vēl labi. Tomēr velkot paralēles ar nodokļu džungļiem ASV, Edgars liek noprast, ka pie mums nemaz ar to nav tik slikti. Ar to sarežģītību, gan, pie mums vēl tāls ceļš ejams, uz ko norāda 2x mazāks grāmatvežu skaits Igaunijā. Sarežģītības dēļ arī cilvēkiem zūd motivācija maksāt nodokļus. To pašu nodokļu summu varētu valsts iegūt ar vienkāršāku sistēmu un mazāku administrēšanu. No Lielbritānijas varētu paņemt, ka tur ieņēmumi līdz GBP 12k gadā ar IIN neapliekas. Lai pašvaldības ar IIN konkurē!Labu ideju Edgars aizņēmies no Dānijas, kur pašvaldībām dota rīcības brīvība ieviest IIN likmi (no – līdz ietvaros) pēc saviem ieskatiem. Tad tās savā starpā arī konkurē par cilvēkiem, kas tām maksā IIN. [1] https://missionhillschina.com/en/[2] https://en.wikipedia.org/wiki/Mission_Hills_Golf_Club

ApsargsEdgars Zālītis ir G4S Latvia vadītājs vairāk kā 16 gadus, pirms tam 7 gadus vadīja Shell gan Latvijā, gan Krievijā. Cilvēks ar matemātiķa un ‘ārpus kastītes’ domāšanas stilu. Golferu aprindās viņu sauc par Apsargu. Inovācijas, lai uzlabotu lietasInteresanti stāstot par saviem hobijiem - tenisu, NBA Fantasy, skriešanu un golfu, Edgars izmeta pa kādai filozofiskai frāzei. Piemēram, ka golfa noteikumu zināšana reizēm palīdz arī uzlabot spēles situāciju un visa dzīve jau ir par to, kā kaut ko uzzināt jaunu, lai uzlabotu lietas. Te, ja kas, ir links uz Edgara ieteikto golfa Meku Mission Hills Ķīnā<a href="#_ftn1" rel="nofollow" target="_blank">[1]</a> un te<a href="#_ftn2" rel="nofollow" target="_blank">[2]</a>. Labāk dūmu detektors, kā signalizācijaParunājām arī par drošību, gan ģeopolitiskās situācijas, gan mūsu mājokļu kontekstā? Daudz svarīgāk ir uzlikt dūmu detektorus, nekā signalizāciju. Ja kaut ko nozags, tad var nopirkt vēlreiz to pašu. Ķer ķirsi, kad tas kritīsNākamā spārnotā frāze no Edgara bija - jābūt gatavam noķert ķirsi tad, kad tas kritīs. To Edgars minēja, kad runājām par nokļūšanu G4S vadītāja amatā. Vaļka Stakan un 2 veļasmašīnas nodokļu inspekcijai PēterburgāPirms tam bija Shell Krievijā laiks ar fascinējošu stāstu par Edgara darba uzsākšanu Pēterburgā, Shell birojā, kas bija ierīkots guļamrajona pagrabiņā. Darbs tur sākās ar nodokļu inspekciju, kas lika manīt, ka ar 2 veļasmašīnām varētu atrisināt inspekcijas jautājumu, taču starptautisko kompāniju politika nepieļāva jebkādu kukuļošanu. Arī te risinājums nāca dēļ Edgara nestandarta domāšanas veida. Kāds? Un kas ir Vaļka Stakan un kāds viņai sakars ar Volodju no Pēterburgas? Un kur pazuda akcīzes nodoklis Krievijā svētkos starp 1. un 15.janvāri? Tad jāpaklausās pašu sarunu. 3 šķīvjiRunājot par biznesa un līderības principiem, Edgars mēģina kā cirkā žonglēt, lai visu laiku 3 šķīvji nenokrīt zemē un nesasitās – klienti, darbinieki un akcionāri. Kādēļ Indexo?Runājām arī, kādēļ radās Indexo un kādēļ Edgars bija viens no tās dibinātājiem. Edgars nepretendē uz precīzu datu atcerēšanos, bet viņš atminas, ka sākotnēji ap 20% no banku peļņas radās no 2.pensiju līmeņa komisijām. Pie reizes parunājām arī par to, kur vispār labāk investēt šajos pārmaiņu laikos.Kas traucē nodokļu sistēmā Latvijā? Viennozīmīgi – tas, ka daudzi konkurenti nemaksā. To piemin daudzi lielie uzņēmumi. Paliek labāk, bet nav vēl labi. Tomēr velkot paralēles ar nodokļu džungļiem ASV, Edgars liek noprast, ka pie mums nemaz ar to nav tik slikti. Ar to sarežģītību, gan, pie mums vēl tāls ceļš ejams, uz ko norāda 2x mazāks grāmatvežu skaits Igaunijā. Sarežģītības dēļ arī cilvēkiem zūd motivācija maksāt nodokļus. To pašu nodokļu summu varētu valsts iegūt ar vienkāršāku sistēmu un mazāku administrēšanu. No Lielbritānijas varētu paņemt, ka tur ieņēmumi līdz GBP 12k gadā ar IIN neapliekas. Lai pašvaldības ar IIN konkurē!Labu ideju Edgars aizņēmies no Dānijas, kur pašvaldībām dota rīcības brīvība ieviest IIN likmi (no – līdz ietvaros) pēc saviem ieskatiem. Tad tās savā starpā arī konkurē par cilvēkiem, kas tām maksā IIN. <a href="#_ftnref1" rel="nofollow" target="_blank">[1]</a> <a href="https://missionhillschina.com/en/" rel="nofollow" target="_blank">https://missionhillschina.com/en/</a><a href="#_ftnref2" rel="nofollow" target="_blank">[2]</a> <a href="https://en.wikipedia.org/wiki/Mission_Hills_Golf_Club" rel="nofollow" target="_blank">https://en.wikipedia.org/wiki/Mission_Hills_Golf_Club</a>

(in Latvian) Edgars Zālītis, G4S LV CEO – pie mums ir ļoti droši!

Marius is a founder of Schwarzthal Tech, a Fintech start-up providing disruptive KYC solutions empowered by Artificial Intelligence for tackling financial crime by making it generally affordable. He has published 4 books, the book that interests the tax world the most is called VAT Fraud[1]. Marius also starred in 4 TV documentaries about financial crime, and a movie Lords of Scam[2] about VAT fraud with CO2 emissions, on Netflix. He is an associate professor of finance with Dauphine University (FRA), and has a PhD in mathematics from Paris Sorbonne University.Co2 fraud – VAT fraud – tax fraudMarius started his studies in tax with VAT fraud cases while trading with CO2 emissions, then expanding his work to VAT fraud in general and now – tax fraud and financial crime in general. People are creating nowadays sophisticated networks with a purpose of hiding money, so his firm is helping anyone to detect the networks, primary clients being banks and lawyers. Their approach is KYN (know your network), not KYC. Despite all the AI capabilities by some of the brightest minds in the profession it sounded like it will be impossible for a long time to detect the criminal networks of those who proactively hide their funds, like the war criminal Putin. Solutions We also discussed several measures how to make the world a better place. One of them was related to inter-connection of data bases of the tax authorities and between the public registers within the EU, to start with. Regarding evaluation if a UBO registered as such or is just a nominee the controlling authorities should evaluate if the person had capabilities to earn all the wealth registered on his/her name. There was a Cyprus law firm officially controlling most the Russian elite properties in London. So, compliance officers especially in banks should better look at transactions within the company in order to determine who the real (economic) UBO is. How VAT fraudsters choose the country? Several aspects are behind typology of VAT fraud. First, the higher VAT rates the more the country attracts fraudsters. Second, the business profile of the country impacts the fraud. For example, Germany makes a lot of VAT refunds which makes it easier for the fraudsters to defraud the refunds. Third, where the levels of corruption are higher it’s easier to infiltrate into the tax authorities. Marius thinks that for sure bigger companies are usual targets for the fraudsters, either without being aware of it or by criminals infiltrating into those companies. What’s wrong with the tax authorities?The authorities normally go after the low-hanging fruit – companies involved in the fraud not the fraudsters themselves. Marius thinks the main problem is wrong KPIs the authorities measure. The authorities should be passionate about fighting the crime, not so much focusing on reaching a pre-determined number of fraud cases detected. The agencies should work more like NGOs – inspired by a cause to fight the crime. It requires a change in culture, mentality. Only then businesses will start trusting the agencies. They need to do the right thing regardless of the immediate results! Why the Lords of Scam movie on Netflix is not the way how the fraudsters work?People committing the fraud are decentralised and rational. They calculate the risks and go for the crime where they are ready to take the risk, by even who and how much would need to spend in prison, if caught. All the facts happen quickly, within 2-3 months – they find and structure companies in a dozen countries, find the accountants, open bank accounts, do the VAT registrations, learn how the trading in the specific business area works. They already have a network of people and companies they can trust. In the movie it is more depicted around a certain bunch of people. Some of people do the fraud, because there is no other option – this is their way of life. We also discussed other topics like: how a law firm can combine tax advice and IT new possibilities;the VAT within the EU will get more centralised to fight the fraud, but trading on the bigger marketplaces still remains a problem regarding the fraud.[1]https://www.amazon.com/gp/product/B07KCPZF1R/ref=dbs_a_def_rwt_bibl_vppi_i1[2]https://youtu.be/nNdWJivSfd0?t=11

Marius is a founder of Schwarzthal Tech, a Fintech start-up providing disruptive KYC solutions empowered by Artificial Intelligence for tackling financial crime by making it generally affordable. He has published 4 books, the book that interests the tax world the most is called VAT Fraud<a href="#_ftn1" rel="nofollow" target="_blank">[1]</a>. Marius also starred in 4 TV documentaries about financial crime, and a movie Lords of Scam<a href="#_ftn2" rel="nofollow" target="_blank">[2]</a> about VAT fraud with CO2 emissions, on Netflix. He is an associate professor of finance with Dauphine University (FRA), and has a PhD in mathematics from Paris Sorbonne University.Co2 fraud – VAT fraud – tax fraudMarius started his studies in tax with VAT fraud cases while trading with CO2 emissions, then expanding his work to VAT fraud in general and now – tax fraud and financial crime in general. People are creating nowadays sophisticated networks with a purpose of hiding money, so his firm is helping anyone to detect the networks, primary clients being banks and lawyers. Their approach is KYN (know your network), not KYC. Despite all the AI capabilities by some of the brightest minds in the profession it sounded like it will be impossible for a long time to detect the criminal networks of those who proactively hide their funds, like the war criminal Putin. Solutions We also discussed several measures how to make the world a better place. One of them was related to inter-connection of data bases of the tax authorities and between the public registers within the EU, to start with. Regarding evaluation if a UBO registered as such or is just a nominee the controlling authorities should evaluate if the person had capabilities to earn all the wealth registered on his/her name. There was a Cyprus law firm officially controlling most the Russian elite properties in London. So, compliance officers especially in banks should better look at transactions within the company in order to determine who the real (economic) UBO is. How VAT fraudsters choose the country? Several aspects are behind typology of VAT fraud. First, the higher VAT rates the more the country attracts fraudsters. Second, the business profile of the country impacts the fraud. For example, Germany makes a lot of VAT refunds which makes it easier for the fraudsters to defraud the refunds. Third, where the levels of corruption are higher it’s easier to infiltrate into the tax authorities. Marius thinks that for sure bigger companies are usual targets for the fraudsters, either without being aware of it or by criminals infiltrating into those companies. What’s wrong with the tax authorities?The authorities normally go after the low-hanging fruit – companies involved in the fraud not the fraudsters themselves. Marius thinks the main problem is wrong KPIs the authorities measure. The authorities should be passionate about fighting the crime, not so much focusing on reaching a pre-determined number of fraud cases detected. The agencies should work more like NGOs – inspired by a cause to fight the crime. It requires a change in culture, mentality. Only then businesses will start trusting the agencies. They need to do the right thing regardless of the immediate results! Why the Lords of Scam movie on Netflix is not the way how the fraudsters work?People committing the fraud are decentralised and rational. They calculate the risks and go for the crime where they are ready to take the risk, by even who and how much would need to spend in prison, if caught. All the facts happen quickly, within 2-3 months – they find and structure companies in a dozen countries, find the accountants, open bank accounts, do the VAT registrations, learn how the trading in the specific business area works. They already have a network of people and companies they can trust. In the movie it is more depicted around a certain bunch of people. Some of people do the fraud, because there is no other option – this is their way of life. We also discussed other topics like: <ul><li>how a law firm can combine tax advice and IT new possibilities;</li><li>the VAT within the EU will get more centralised to fight the fraud, but trading on the bigger marketplaces still remains a problem regarding the fraud.</li></ul><a href="#_ftnref1" rel="nofollow" target="_blank">[1]</a><a href="https://www.amazon.com/gp/product/B07KCPZF1R/ref=dbs_a_def_rwt_bibl_vppi_i1" rel="nofollow" target="_blank">https://www.amazon.com/gp/product/B07KCPZF1R/ref=dbs_a_def_rwt_bibl_vppi_i1</a><a href="#_ftnref2" rel="nofollow" target="_blank">[2]</a><a href="https://youtu.be/nNdWJivSfd0?t=11" rel="nofollow" target="_blank">https://youtu.be/nNdWJivSfd0?t=11</a>

Dr. Marius-Cristian Frunza on VAT fraud

Allison Christians

During an interview it is often like in golf – in the first 10-15 minutes it is possible to understand quite clearly if you have a connection or don’t. With Allison, a tax law professor who is named one of the “Global Tax 50” most influential individuals in international taxation, it was easy and fun to discuss such topics like:Social media[1];Her drawings on RedBubble[2];Movies containing tax aspects[3];A tax story Allison would like to make as a cartoon;Why did Allison move from law firms to academia and how to keep hands on the business practice at the same time;Break Into Tax YouTube channel[4];Her new book - Tax Cooperation in an Unjust World that you can buy here[5] and here is a summary of the book main ideas[6] - on an equal division of the benefits between the countries involved, so the majority of the benefits doesn’t just go to the rich countries;On ideas how the tax world can help Ukraine, on UBOs of properties and Pillar2, tax on speculative foreign ownership, AML checks for the Golden visa source money.[1]https://www.allisonchristians.com/[2]https://www.redbubble.com/people/drbombtaxstic/shop[3]https://www.allisonchristians.com/tax-law-in-film-and-tv[4]https://www.youtube.com/channel/UCGEYoF757EOl-FXi0iyuqOw[5]https://www.amazon.com/Cooperation-Unjust-World-Allison-Christians/dp/0192848674[6]https://www.taxnotes.com/featured-analysis/harnessing-momentum-fairer-international-tax-system/2022/02/18/7d6gj?highlight=Allison%20Christians

During an interview it is often like in golf – in the first 10-15 minutes it is possible to understand quite clearly if you have a connection or don’t. With Allison, a tax law professor who is named one of the “Global Tax 50” most influential individuals in international taxation, it was easy and fun to discuss such topics like:<ul><li>Social media<a href="#_ftn1" rel="nofollow" target="_blank">[1]</a>;</li><li>Her drawings on RedBubble<a href="#_ftn2" rel="nofollow" target="_blank">[2]</a>;</li><li>Movies containing tax aspects<a href="#_ftn3" rel="nofollow" target="_blank">[3]</a>;</li><li>A tax story Allison would like to make as a cartoon;</li><li>Why did Allison move from law firms to academia and how to keep hands on the business practice at the same time;</li><li>Break Into Tax YouTube channel<a href="#_ftn4" rel="nofollow" target="_blank">[4]</a>;</li><li>Her new book - Tax Cooperation in an Unjust World that you can buy here<a href="#_ftn5" rel="nofollow" target="_blank">[5]</a> and here is a summary of the book main ideas<a href="#_ftn6" rel="nofollow" target="_blank">[6]</a> - on an equal division of the benefits between the countries involved, so the majority of the benefits doesn’t just go to the rich countries;</li><li>On ideas how the tax world can help Ukraine, on UBOs of properties and Pillar2, tax on speculative foreign ownership, AML checks for the Golden visa source money.</li></ul><a href="#_ftnref1" rel="nofollow" target="_blank">[1]</a><a href="https://www.allisonchristians.com/" rel="nofollow" target="_blank">https://www.allisonchristians.com/</a><a href="#_ftnref2" rel="nofollow" target="_blank">[2]</a><a href="https://www.redbubble.com/people/drbombtaxstic/shop" rel="nofollow" target="_blank">https://www.redbubble.com/people/drbombtaxstic/shop</a><a href="#_ftnref3" rel="nofollow" target="_blank">[3]</a><a href="https://www.allisonchristians.com/tax-law-in-film-and-tv" rel="nofollow" target="_blank">https://www.allisonchristians.com/tax-law-in-film-and-tv</a><a href="#_ftnref4" rel="nofollow" target="_blank">[4]</a><a href="https://www.youtube.com/channel/UCGEYoF757EOl-FXi0iyuqOw" rel="nofollow" target="_blank">https://www.youtube.com/channel/UCGEYoF757EOl-FXi0iyuqOw</a><a href="#_ftnref5" rel="nofollow" target="_blank">[5]</a><a href="https://www.amazon.com/Cooperation-Unjust-World-Allison-Christians/dp/0192848674" rel="nofollow" target="_blank">https://www.amazon.com/Cooperation-Unjust-World-Allison-Christians/dp/0192848674</a><a href="#_ftnref6" rel="nofollow" target="_blank">[6]</a><a href="https://www.taxnotes.com/featured-analysis/harnessing-momentum-fairer-international-tax-system/2022/02/18/7d6gj?highlight=Allison%20Christians" rel="nofollow" target="_blank">https://www.taxnotes.com/featured-analysis/harnessing-momentum-fairer-international-tax-system/2022/02/18/7d6gj?highlight=Allison%20Christians</a>

Allison Christians (Canada) – on telling stories until the unjust world changes

First, here are the details for the donations. Illya confirmed that these donations will safely go to the most pressing needs currently in Ukraine.Come Back Alive Foundation (can de donated in cryptocurrencies as well)Support the Armed Forces of Ukraine via National Bank of Ukraine Particular project – fit-out of the already built multi-apartment house to accommodate refugees. Second, I thought it’s important to catch up the situation within the war zone, so we all better understand what’s going on there, and clear some questions hanging in the air, like: what are the most pressing needs now in Ukraine;now donations in crypto might be totalling EUR ~100m – is this a good way of donating; how might Russians and Ukrainians live in the same world after the war ends;might the war expand to Europe;are there good Russians still to have business with – where to draw the line;is drinking a Latvian company-produced Solichnaya vodka a Russian business;should we deny help to people and companies running away from the Putin regime;how does the law firm and businesses in general function nowadays in Ukraine;about the economics in general - what can be preserved and restored, and what is irreversibly damaged;about the single tax regime of 2% of turnover (the only tax payable now by any businesses), if the turnover does not exceed a bit above EUR 300m, and is there a chance of having something like this permanently (I’ve always been hoping for such simplified tax system permanently, so I can finally go and do something more meaningful).

First, here are the details for the donations. Illya confirmed that these donations will safely go to the most pressing needs currently in Ukraine.<ul><li><a href="https://www.comebackalive.in.ua/donate" rel="nofollow" target="_blank">Come Back Alive Foundation</a> (can de donated in cryptocurrencies as well)</li><li><a href="https://bank.gov.ua/en/about/support-the-armed-forces" rel="nofollow" target="_blank">Support the Armed Forces of Ukraine</a> via National Bank of Ukraine </li><li>Particular project – <a href="https://www.linkedin.com/posts/igor-chernysh-43016b135_dear-friends-and-colleagues-ukraine-is-activity-6907659852982935552-Cagi?utm_source=linkedin_share&amp;utm_medium=member_desktop_web" rel="nofollow" target="_blank">fit-out of the already built multi-apartment house to accommodate refugees</a>. </li></ul>Second, I thought it’s important to catch up the situation within the war zone, so we all better understand what’s going on there, and clear some questions hanging in the air, like: <ul><li>what are the most pressing needs now in Ukraine;</li><li>now donations in crypto might be totalling EUR ~100m – is this a good way of donating; </li><li>how might Russians and Ukrainians live in the same world after the war ends;</li><li>might the war expand to Europe;</li><li>are there good Russians still to have business with – where to draw the line;</li><li>is drinking a Latvian company-produced Solichnaya vodka a Russian business;</li><li>should we deny help to people and companies running away from the Putin regime;</li><li>how does the law firm and businesses in general function nowadays in Ukraine;</li><li>about the economics in general - what can be preserved and restored, and what is irreversibly damaged;</li><li>about the single tax regime of 2% of turnover (the only tax payable now by any businesses), if the turnover does not exceed a bit above EUR 300m, and is there a chance of having something like this permanently (I’ve always been hoping for such simplified tax system permanently, so I can finally go and do something more meaningful).</li></ul>

Illya Sverdlov (Ep.2 on Ukraine) on the war

Illya Sverdlov Illya was a tax partner at DLA Ukraine. He still would be there, but DLA a year ago announced it leaves Ukraine. So, Illya with all the tax team moved to Kinstellar law firm, which is a Tier 1 firm in tax in Ukraine by Legal 500 directory. Politics While the media mostly talks of the potential war in Ukraine, Illya feels quite confident that everything politically is more or less stable, considering the circumstances. People are not panicking and feel more prepared than during the previous conflict with Russia in 2014. Then Ukraine had a mobilisation of all men, whereas now it has not happened so far. Nevertheless everybody checks in to the military units and even takes some shooting practice. BusinessThere is no downturn, quite on the opposite. The investments have not stopped, nor are exiting. The corruption situation is also getting better since 2014 reform. The scale of the grey economy has been reduced as well lately. I could feel that the politics and business in general were not comfortable topics for Illya right now as there is so much uncertainty. But the tempo of the discussion changed once we switched to tax.TaxUkraine as of 2022 has introduced CFC rules. The place of effective management and the beneficial ownership rules may require foreign companies with management in Ukraine to restructure. Foreign holding companies through the foreign tax authorities now receive long lists of very detailed questions from the Ukrainian authorities in order to determine, if the cross-border taxation was correctly applied. The Ukrainian authorities are getting smarter. The corporate structure should be as simple as you can explain to a child. Either one should create substance in the foreign company or close it.One of the best tax systems for IT companies“One of the world’s best tax systems is now available for small startups as well as big IT companies at any location across Ukraine,” said Minister for Digital Transformation Mykhailo Fedorov[1].IT companies in Ukraine as of 2022 can pay either 18% corporate tax or pay no CIT until distribution of profits when 9% CIT is applied. Salaries of employees of such companies are taxed at 6.5% income tax, and the social contributions are capped at just USD 50 a month. At least USD 1200 salary should be paid to the employees and the company must have at least 9 employees. Now it seems at least as competitive as the tax system in the High Technology park in Belarus. Purple cow is having no purple cowIllya thinks the best marketing of a tax advisor is recommendation once the firm has done a good job and the client is happy, as tax lawyers are handling very delicate matters of their clients. [1]Over 50 IT companies join Ukraine’s ‘special tax regime’ Diia City in first three days (as of 11.2.22.), incl. Revolut:https://kyivindependent.com/tech/over-50-it-companies-join-ukraines-special-economic-zone-diia-city-in-its-first-days/

Illya Sverdlov Illya was a tax partner at DLA Ukraine. He still would be there, but DLA a year ago announced it leaves Ukraine. So, Illya with all the tax team moved to Kinstellar law firm, which is a Tier 1 firm in tax in Ukraine by Legal 500 directory. Politics While the media mostly talks of the potential war in Ukraine, Illya feels quite confident that everything politically is more or less stable, considering the circumstances. People are not panicking and feel more prepared than during the previous conflict with Russia in 2014. Then Ukraine had a mobilisation of all men, whereas now it has not happened so far. Nevertheless everybody checks in to the military units and even takes some shooting practice. BusinessThere is no downturn, quite on the opposite. The investments have not stopped, nor are exiting. The corruption situation is also getting better since 2014 reform. The scale of the grey economy has been reduced as well lately. I could feel that the politics and business in general were not comfortable topics for Illya right now as there is so much uncertainty. But the tempo of the discussion changed once we switched to tax.TaxUkraine as of 2022 has introduced CFC rules. The place of effective management and the beneficial ownership rules may require foreign companies with management in Ukraine to restructure. Foreign holding companies through the foreign tax authorities now receive long lists of very detailed questions from the Ukrainian authorities in order to determine, if the cross-border taxation was correctly applied. The Ukrainian authorities are getting smarter. The corporate structure should be as simple as you can explain to a child. Either one should create substance in the foreign company or close it.One of the best tax systems for IT companies“One of the world’s best tax systems is now available for small startups as well as big IT companies at any location across Ukraine,” said Minister for Digital Transformation Mykhailo Fedorov<a href="#_ftn1" rel="nofollow" target="_blank">[1]</a>.IT companies in Ukraine as of 2022 can pay either 18% corporate tax or pay no CIT until distribution of profits when 9% CIT is applied. Salaries of employees of such companies are taxed at 6.5% income tax, and the social contributions are capped at just USD 50 a month. At least USD 1200 salary should be paid to the employees and the company must have at least 9 employees. Now it seems at least as competitive as the tax system in the High Technology park in Belarus. Purple cow is having no purple cowIllya thinks the best marketing of a tax advisor is recommendation once the firm has done a good job and the client is happy, as tax lawyers are handling very delicate matters of their clients. <a href="#_ftnref1" rel="nofollow" target="_blank">[1]</a>Over 50 IT companies join Ukraine’s ‘special tax regime’ Diia City in first three days (as of 11.2.22.), incl. Revolut:<a href="https://kyivindependent.com/tech/over-50-it-companies-join-ukraines-special-economic-zone-diia-city-in-its-first-days/" rel="nofollow" target="_blank">https://kyivindependent.com/tech/over-50-it-companies-join-ukraines-special-economic-zone-diia-city-in-its-first-days/</a>

Illya Sverdlov (Ukraine) on the enemy at the gates

Full episode summary you can find in my blogspot: https://taukacs.blogspot.com/

Full episode summary you can find in my blogspot: <a href="https://taukacs.blogspot.com/" rel="nofollow" target="_blank">https://taukacs.blogspot.com/</a>

Saule Dagilyte (Lithuania) - on people, purpose and health

https://taukacs.blogspot.com/2022/02/tax-stories-e23-ana-utumi-on-usd-6bn.html 

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Ana Utumi (Brasil) on USD 6bn tax fraud

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Artis Daugins - (in Latvian) 1/2 gads nosacīti par uzņēmuma 28k nodokļu parādu

A full description of the episode is here: https://taukacs.blogspot.com/2022/01/kaspars-daugavins-podcast-on-taxation.html 

A full description of the episode is here: <a href="https://taukacs.blogspot.com/2022/01/kaspars-daugavins-podcast-on-taxation.html" rel="nofollow" target="_blank">https://taukacs.blogspot.com/2022/01/kaspars-daugavins-podcast-on-taxation.html</a>

Kaspars Daugavins (NHL, KHL) on taxation in sports

Life stories of people dealing with tax, from all over the world. Stories for, about and by businesses, fraudsters, judges, attorneys-at-law, prosecutors, authorities, politicians, professors, writers, journalists. Your host with more than 25 y. experience in tax has some stories too. The host can be reached at: janis.taukacs@sorainen.comMusic by Karlis Lacis; Cover art by Mara Vulfa

Giving back to the communityI had a lot of respect for my guest right at the start of the conversation when they told about their community work they do besides the work. How many of us can tell that one is at the board of a school or sponsoring a football club (Green Eagles)? On happiness and motivationIt appears the tax lawyers in Africa are not that different from the ones in the other continents – the are happy, if they make other people happy, and they get pumped up to do more by getting energy back from the ones they are helping – a golden circle of energy. Also teaching at a university, family support, client success due to a tax advice are some of the proof of the circle. African literature suggestionIf you are a bit tired of the Western literature, a valuable suggestion by Edward for your reading table was Ngũgĩ wa Thiong'o from Kenya who wrote many of his books in English. Edward suggested to start with a book Petals of Blood. The Goodreads page has an inrigueing description of the book: “..as the intertwined stories of the four suspects (of a tripple-murder) unfold, a devastating picture emerges of a modern third-world nation whose frustrated people feel their leaders have failed them time after time. First published in 1977, this novel was so explosive that its author was imprisoned without charges by the Kenyan government. His incarceration was so shocking that newspapers around the world called attention to the case, and protests were raised by human-rights groups, scholars, and writers..”. For the rest of the description of the episode please click here:  https://www.linkedin.com/pulse/africa-rising-janis-taukacs/?published=t&amp;trackingId=8JfzkLEmQ0mMoG4v0cWaDA%3D%3D 

Giving back to the communityI had a lot of respect for my guest right at the start of the conversation when they told about their community work they do besides the work. How many of us can tell that one is at the board of a school or sponsoring a football club (Green Eagles)? On happiness and motivationIt appears the tax lawyers in Africa are not that different from the ones in the other continents – the are happy, if they make other people happy, and they get pumped up to do more by getting energy back from the ones they are helping – a golden circle of energy. Also teaching at a university, family support, client success due to a tax advice are some of the proof of the circle. African literature suggestionIf you are a bit tired of the Western literature, a valuable suggestion by Edward for your reading table was Ngũgĩ wa Thiong'o from Kenya who wrote many of his books in English. Edward suggested to start with a book Petals of Blood. The Goodreads page has an inrigueing description of the book: “..as the intertwined stories of the four suspects (of a tripple-murder) unfold, a devastating picture emerges of a modern third-world nation whose frustrated people feel their leaders have failed them time after time. First published in 1977, this novel was so explosive that its author was imprisoned without charges by the Kenyan government. His incarceration was so shocking that newspapers around the world called attention to the case, and protests were raised by human-rights groups, scholars, and writers..”. For the rest of the description of the episode please click here:  <a href="https://www.linkedin.com/pulse/africa-rising-janis-taukacs/?published=t&amp;trackingId=8JfzkLEmQ0mMoG4v0cWaDA%3D%3D" rel="nofollow" target="_blank">https://www.linkedin.com/pulse/africa-rising-janis-taukacs/?published=t&amp;trackingId=8JfzkLEmQ0mMoG4v0cWaDA%3D%3D</a>

Edward Mwachinga (Kenya) & Theophilus Tawiah (Ghana) – Africa is Rising

Richard Asquith is CEO of VAT Calc – VAT &amp; technology company, making the global VAT compliance as easy as at all possible. He is also a winner of International Tax Review's ‘Tax Innovator of the Year’ award. Richard was also a VP of Avalara, and before that was working for Big 4s in the UK, Hungary, Russia, France and the US. On literature, relations &amp; wineBut we start our chat with Moscow, English and Russian romantic classic literature, Dostoyevsky and Chekhov’s The Lady with the Dog story. Love towards travelling and literature turned into love of a variety of languages, cultures and VAT systems across Europe. Richard also now is fond of US literature of 50s and 60s – many might not have heard of a brilliant Stoner by John Williams and Bullet Park by John Cheever. Besides the books, now when the kids have grown up there is more time to re-discover a nice conversation with his wife as well. Richard adds that a good French wine completes a perfect picture – a chat with the loved one along with a glass of wine, and a book. E-invoicing is the thingOnce we start talking about VAT Richard’s eyes sparkle. Countries are queuing up following success of Italy, Spain and Hungary who introduced e-invoicing and thus reduced the VAT gap to a significant extent. Poland, France, Slovakia, Slovenia, Romania, etc are lining up next to do the same. Tax people should not start falling in love with technologies, cause tax authorities are doing the same. On VAT automationAutomation at VAT Calc is focused on VAT compliance by applying the VAT rates correctly, especially on the live invoices, as well as filing it through a VAT return. The other problem was that VAT compliance soft was often made by IT people with vague understanding of how VAT works, especially in so many different EU Member States. VAT Calc has managed to create a unique IT platform that does both – applies correct rates on invoices and puts that on the respective country’s VAT return (in the EU and beyond). Moreover, the system also makes a reference to the respective domestic law of the country where the VAT return is to be filed. It can be used by all possible industries. On some predictionsRichard predicts that soon the tax authorities might be able to connect the VAT liabilities with the cash flows through non-banking payment providers – they might even end up as being responsible for VAT calculations and collections, like in the split payments system. He predicts that the tax authorities will also focus more on the gig and sharing economies. He also thinks that soon the days of banking and insurance enjoying VAT exemption will be over. On thought online leadershipRichard once learned that blogging once a day works and it really does. Lately, though, it’s getting herder to keep the unique voice &amp; thought leadership. But tax authorities with their opinions help Richard with funny explanations to blog about. On VAT fraudOnce we discuss a VAT risk management tool in order to minimise the risk for businesses to enter into a fraudulent transaction, Richard suggests a blockchain system as the possible future solution, but only for a narrow circle of cases – most likely it will not prevent fraud, but it makes detection afterwards easy. VAT Calc current soft allows transaction parties to compare the legal reasoning and the corresponding case law for the intended transaction – that might help as well. Richard predicts that in some 3 years’ time EU VAT system will be in a comparably good shape with tackling VAT fraud with smaller constant improvements in the system. The charging of domestic rate on cross-border transactions seems unlikely. On the best VAT systemsSpeaking of an ideal tax system Richard highlighted Australia and New Zealand for having a very small number of VAT exemptions and reduced rates, thus making the system simple. It is also a good example regarding tackling VAT on financial services, as well as because having a very low VAT gap. India has made a great progress with GST. OECD (Piet Battiau and his team) has done a massive work in harmonisation and simplification of indirect tax. 

Richard Asquith is CEO of VAT Calc – VAT &amp; technology company, making the global VAT compliance as easy as at all possible. He is also a winner of International Tax Review's ‘Tax Innovator of the Year’ award. Richard was also a VP of Avalara, and before that was working for Big 4s in the UK, Hungary, Russia, France and the US. On literature, relations &amp; wineBut we start our chat with Moscow, English and Russian romantic classic literature, Dostoyevsky and Chekhov’s The Lady with the Dog story. Love towards travelling and literature turned into love of a variety of languages, cultures and VAT systems across Europe. Richard also now is fond of US literature of 50s and 60s – many might not have heard of a brilliant Stoner by John Williams and Bullet Park by John Cheever. Besides the books, now when the kids have grown up there is more time to re-discover a nice conversation with his wife as well. Richard adds that a good French wine completes a perfect picture – a chat with the loved one along with a glass of wine, and a book. E-invoicing is the thingOnce we start talking about VAT Richard’s eyes sparkle. Countries are queuing up following success of Italy, Spain and Hungary who introduced e-invoicing and thus reduced the VAT gap to a significant extent. Poland, France, Slovakia, Slovenia, Romania, etc are lining up next to do the same. Tax people should not start falling in love with technologies, cause tax authorities are doing the same. On VAT automationAutomation at VAT Calc is focused on VAT compliance by applying the VAT rates correctly, especially on the live invoices, as well as filing it through a VAT return. The other problem was that VAT compliance soft was often made by IT people with vague understanding of how VAT works, especially in so many different EU Member States. VAT Calc has managed to create a unique IT platform that does both – applies correct rates on invoices and puts that on the respective country’s VAT return (in the EU and beyond). Moreover, the system also makes a reference to the respective domestic law of the country where the VAT return is to be filed. It can be used by all possible industries. On some predictionsRichard predicts that soon the tax authorities might be able to connect the VAT liabilities with the cash flows through non-banking payment providers – they might even end up as being responsible for VAT calculations and collections, like in the split payments system. He predicts that the tax authorities will also focus more on the gig and sharing economies. He also thinks that soon the days of banking and insurance enjoying VAT exemption will be over. On thought online leadershipRichard once learned that blogging once a day works and it really does. Lately, though, it’s getting herder to keep the unique voice &amp; thought leadership. But tax authorities with their opinions help Richard with funny explanations to blog about. On VAT fraudOnce we discuss a VAT risk management tool in order to minimise the risk for businesses to enter into a fraudulent transaction, Richard suggests a blockchain system as the possible future solution, but only for a narrow circle of cases – most likely it will not prevent fraud, but it makes detection afterwards easy. VAT Calc current soft allows transaction parties to compare the legal reasoning and the corresponding case law for the intended transaction – that might help as well. Richard predicts that in some 3 years’ time EU VAT system will be in a comparably good shape with tackling VAT fraud with smaller constant improvements in the system. The charging of domestic rate on cross-border transactions seems unlikely. On the best VAT systemsSpeaking of an ideal tax system Richard highlighted Australia and New Zealand for having a very small number of VAT exemptions and reduced rates, thus making the system simple. It is also a good example regarding tackling VAT on financial services, as well as because having a very low VAT gap. India has made a great progress with GST. OECD (Piet Battiau and his team) has done a massive work in harmonisation and simplification of indirect tax.

Richard Asquith (VAT Calc, UK) on VAT & technologies

Janis Zelmenis is a Chairman of Management Board &amp; Equity Partner at BDO Latvia, and one of the most prominent tax experts in Latvia. The Chambers Europe wrote: “Janis Zelmanis absolute knowledge of local and international legislation makes him one of the most frequently quoted personality in media widely. Janis is also an author of the book “Pendulum of Wealth” published in Latvian and Russian languages in December 2015 that is devoted to international tax planning and privatization of Ventspils Nafta in Latvia.” 50 on the day of the recordingWe started our chat with Janis looking back at his achievements, as at the day of the recording Janis celebrated his 50th birthday. His own milestones are closely related to the strategy of the companies he was working for. And some of the best ways to switch off from work are while hunting where there is no internet coverage. PrivatisationThe more juicy part starts when we switch to his book about the privatisation when Latvia re-gained its independence from the USSR in 1990s. Some may call ir re-distribution of wealth, but Janis calls it stealing in a daylight, untaxed. Janis also gave an example of technicalities – how exactly this was happening. SpiesFrom the literature and movies Janis is into a theme of spies right now, so he has highlighted A Bridge of Spies with Tom Hanks as one of his favourite. Currently Janis reads memoire by Pavel Sudoplatov who was a hitman who killed Leon Trotsky, one of the architects of the Russian Revolution. NY Times wrote about Sudoplatov: “He was a master of the art of ''silent'' elimination of enemies of the Soviet state..”[1]Carriage with 3-4 horsesOne of Janis achievements is to lead an audit firm while being a lawyer. He enjoys having a broader perspective at the clients’ problems. Also for steady cash-flow reasons he prefers audit and bookkeeping service lines to support tax and law. Janis compared his leadership style to an example from the nature where male lions do the hardest work - hunt at night &amp; protect the territory and for that get the juiciest part of the meal. Latvia 1st independence (1918-1940) tax historyJanis recalls that at that time men had to pay a higher tax than women, especially, if they were single and childless. There was a lower rate of real estate tax in Latgale (S-E region of Latvia nearby Russian border that was less developed). Farms below 17ha were real estate tax exempt. Quite a considerable amount of income was tax-exempt also from the personal income tax (Ls 2000, which by a wild guess would equal EUR ~15k now). Lessons to be learned from the historySo at that time politicians understood a simple truth – do not bather to regulate people who take care of themselves. Right now he sees the beginning of improving the tax system with setting the country’s priorities and combining the Ministry of Finance with the Ministry of Economics, especially because they are in the hands of two different coalition parties. Responsibility for the economic development cannot be separated from collecting the taxes function. However, the minimum untaxed salary in Sweden equals to an average salary in Latvia, so it cannot be untaxed. The deep roots of our problems come from the old, pre-WWII constitution and the weakness of the power institutions, and thus – from the law on parties and their elections. The current Latvian tax system highlightsJanis believes the Latvian startup tax benefits with almost no taxation on salaries for the first 12-24 months of operation and a rather broad definition of a startup (where only some innovation has to be demonstrated) stands out even globally. In a combination with no corporate taxation until distribution of profits it may prove to be a winning combination for developing this sector rapidly. A relatively moderate taxation of high net-worth individuals would conclude his Top 3 tax benefits of the country, that might facilitate moving of owners and managers of high-tech/IT companies towards Latvia, especially from Belarus IT hub. [1] A NY Times article about Sudoplatov: https://www.nytimes.com/1996/09/28/world/pavel-sudoplatov-89-dies-top-soviet-spy-who-accused-oppenheimer.html

Janis Zelmenis is a Chairman of Management Board &amp; Equity Partner at BDO Latvia, and one of the most prominent tax experts in Latvia. The Chambers Europe wrote: “Janis Zelmanis absolute knowledge of local and international legislation makes him one of the most frequently quoted personality in media widely. Janis is also an author of the book “Pendulum of Wealth” published in Latvian and Russian languages in December 2015 that is devoted to international tax planning and privatization of Ventspils Nafta in Latvia.” 50 on the day of the recordingWe started our chat with Janis looking back at his achievements, as at the day of the recording Janis celebrated his 50th birthday. His own milestones are closely related to the strategy of the companies he was working for. And some of the best ways to switch off from work are while hunting where there is no internet coverage. PrivatisationThe more juicy part starts when we switch to his book about the privatisation when Latvia re-gained its independence from the USSR in 1990s. Some may call ir re-distribution of wealth, but Janis calls it stealing in a daylight, untaxed. Janis also gave an example of technicalities – how exactly this was happening. SpiesFrom the literature and movies Janis is into a theme of spies right now, so he has highlighted A Bridge of Spies with Tom Hanks as one of his favourite. Currently Janis reads memoire by Pavel Sudoplatov who was a hitman who killed Leon Trotsky, one of the architects of the Russian Revolution. NY Times wrote about Sudoplatov: “He was a master of the art of ''silent'' elimination of enemies of the Soviet state..”<a href="#_ftn1" rel="nofollow" target="_blank">[1]</a>Carriage with 3-4 horsesOne of Janis achievements is to lead an audit firm while being a lawyer. He enjoys having a broader perspective at the clients’ problems. Also for steady cash-flow reasons he prefers audit and bookkeeping service lines to support tax and law. Janis compared his leadership style to an example from the nature where male lions do the hardest work - hunt at night &amp; protect the territory and for that get the juiciest part of the meal. Latvia 1st independence (1918-1940) tax historyJanis recalls that at that time men had to pay a higher tax than women, especially, if they were single and childless. There was a lower rate of real estate tax in Latgale (S-E region of Latvia nearby Russian border that was less developed). Farms below 17ha were real estate tax exempt. Quite a considerable amount of income was tax-exempt also from the personal income tax (Ls 2000, which by a wild guess would equal EUR ~15k now). Lessons to be learned from the historySo at that time politicians understood a simple truth – do not bather to regulate people who take care of themselves. Right now he sees the beginning of improving the tax system with setting the country’s priorities and combining the Ministry of Finance with the Ministry of Economics, especially because they are in the hands of two different coalition parties. Responsibility for the economic development cannot be separated from collecting the taxes function. However, the minimum untaxed salary in Sweden equals to an average salary in Latvia, so it cannot be untaxed. The deep roots of our problems come from the old, pre-WWII constitution and the weakness of the power institutions, and thus – from the law on parties and their elections. The current Latvian tax system highlightsJanis believes the Latvian startup tax benefits with almost no taxation on salaries for the first 12-24 months of operation and a rather broad definition of a startup (where only some innovation has to be demonstrated) stands out even globally. In a combination with no corporate taxation until distribution of profits it may prove to be a winning combination for developing this sector rapidly. A relatively moderate taxation of high net-worth individuals would conclude his Top 3 tax benefits of the country, that might facilitate moving of owners and managers of high-tech/IT companies towards Latvia, especially from Belarus IT hub. <a href="#_ftnref1" rel="nofollow" target="_blank">[1] </a>A NY Times article about Sudoplatov: <a href="https://www.nytimes.com/1996/09/28/world/pavel-sudoplatov-89-dies-top-soviet-spy-who-accused-oppenheimer.html" rel="nofollow" target="_blank">https://www.nytimes.com/1996/09/28/world/pavel-sudoplatov-89-dies-top-soviet-spy-who-accused-oppenheimer.html</a>

Janis Zelmenis (BDO) - The Latvian taxation 100 years ago and now

Harriet Brown

Harriet Brown and Grahame Jackson are authors of a podcast International Tax Bites that explains different tax concepts. They both in September 2021 released a book "A Practitioner's Guide to International Tax Information Exchange Regimes", published in September 2021 by www.spiramus.com. Harriet practices tax in the UK, but Grahame – in Gibraltar. We discussed their careers, the podcast, the book and the global tax issues at large. GibraltarWe start with discovering Hassans International Law Firm where Grahame is a partner. Having the population in Gibraltar of 28,000 people the size of the firm (300 people) is surprisingly large. The firm works a lot with family structures, but Gibraltar is also a world leader in gaming industry. JerseyHarriet is a barrister and Jersey advocate @Old Square Tax Chambers in London, but she also practices in Jersey, Guernsey and the Isle of Man. As Harriet is an author of booksThe Jersey Law of Trusts and The Interaction of EU Treaty Freedoms and the UK Tax Code, quite naturally that we dive deeper into the sea of Jersey trusts. She believes that the said islands also have had quite strict rules on identification of clients. Also the information exchange, trust registers, registers of UBOs and other OECD initiatives are changing the landscape of those jurisdictions. Their new bookWe also speak about the process of creating the new book by Harriet and Grahame, and the topic itself – exchange of information – where the world is moving with it, e.g. will the tax authorities be able to process all that info? CRSThere was an interesting example mentioned by Harriet that HMRC in the UK encouraged voluntary disclosure before it started to get information from the information exchange (CRS) system, which seemed to work successfully, as many thought that HMRS will get the information anyway. However, in this way people highlighted themselves to the HMRC. Two approaches to the info obtainedThere are two approaches by the tax authorities – once they receive an alarm about a certain issue of a person or entity they dive deeper into CRS and other info received from external sources; whereas under the other approach the authorities actively analyse information received under CRS bank account or other reporting. But Harriet thinks that at least the UK authorities are not there yet to be ready to analyse the Big data proactively. The Latvian case the EUCJGrahame explained that a new directive called DAC7 will extend the reporting obligations to online platforms in 2022. He also points to a ‘foreseeable relevant information’ test as to what the tax authorities may request from a business. We discussed the concepts in a context of a Latvian case where the tax authorities requested a used cars sellers’ full data-base from an online platform and they refused, and the case landed in the EU Court of Justice. The same principle applies for info exchange under the tax treaties. The podcastThen we switch to their podcast – International Tax Bites. It is not only for tax professionals, but also businesses who would like to learn the international taxation concepts and for students as well, where Harriet and Grahame are just having a chat on the chosen topic. One of the aims of the hosts is to make a dry topic accessible. Grahame highlighted The Tax Professionals Podcast on career development issues of tax experts. Harriet is a fan of podcasts on true crime and horse riding, which she enjoys while walking her dog. Grahame enjoys podcasts on history, e.g. The Rest Is History when walking to his office and back or cooking. 

Harriet Brown and Grahame Jackson are authors of a podcast International Tax Bites that explains different tax concepts. They both in September 2021 released a book "A Practitioner's Guide to International Tax Information Exchange Regimes", published in September 2021 by <a href="http://www.spiramus.com" rel="nofollow" target="_blank">www.spiramus.com</a>. Harriet practices tax in the UK, but Grahame – in Gibraltar. We discussed their careers, the podcast, the book and the global tax issues at large. GibraltarWe start with discovering Hassans International Law Firm where Grahame is a partner. Having the population in Gibraltar of 28,000 people the size of the firm (300 people) is surprisingly large. The firm works a lot with family structures, but Gibraltar is also a world leader in gaming industry. JerseyHarriet is a barrister and Jersey advocate @Old Square Tax Chambers in London, but she also practices in Jersey, Guernsey and the Isle of Man. As Harriet is an author of books<a href="https://www.wildy.com/isbn/9781901614480/the-jersey-law-of-trusts-4th-ed-paperback-key-haven-publications-plc" rel="nofollow" target="_blank">The Jersey Law of Trusts</a> and <a href="https://www.wildy.com/isbn/9781901614527/the-application-of-eu-law-to-uk-direct-taxes-" rel="nofollow" target="_blank">The Interaction of EU Treaty Freedoms and the UK Tax Code</a>, quite naturally that we dive deeper into the sea of Jersey trusts. She believes that the said islands also have had quite strict rules on identification of clients. Also the information exchange, trust registers, registers of UBOs and other OECD initiatives are changing the landscape of those jurisdictions. Their new bookWe also speak about the process of creating the new book by Harriet and Grahame, and the topic itself – exchange of information – where the world is moving with it, e.g. will the tax authorities be able to process all that info? CRSThere was an interesting example mentioned by Harriet that HMRC in the UK encouraged voluntary disclosure before it started to get information from the information exchange (CRS) system, which seemed to work successfully, as many thought that HMRS will get the information anyway. However, in this way people highlighted themselves to the HMRC. Two approaches to the info obtainedThere are two approaches by the tax authorities – once they receive an alarm about a certain issue of a person or entity they dive deeper into CRS and other info received from external sources; whereas under the other approach the authorities actively analyse information received under CRS bank account or other reporting. But Harriet thinks that at least the UK authorities are not there yet to be ready to analyse the Big data proactively. The Latvian case the EUCJGrahame explained that a new directive called DAC7 will extend the reporting obligations to online platforms in 2022. He also points to a ‘foreseeable relevant information’ test as to what the tax authorities may request from a business. We discussed the concepts in a context of a Latvian case where the tax authorities requested a used cars sellers’ full data-base from an online platform and they refused, and the case landed in the EU Court of Justice. The same principle applies for info exchange under the tax treaties. The podcastThen we switch to their podcast – International Tax Bites. It is not only for tax professionals, but also businesses who would like to learn the international taxation concepts and for students as well, where Harriet and Grahame are just having a chat on the chosen topic. One of the aims of the hosts is to make a dry topic accessible. Grahame highlighted The Tax Professionals Podcast on career development issues of tax experts. Harriet is a fan of podcasts on true crime and horse riding, which she enjoys while walking her dog. Grahame enjoys podcasts on history, e.g. The Rest Is History when walking to his office and back or cooking.

Harriet Brown (UK barrister) and Grahame Jackson (Hassans) on information exchange and tax podcasts

Bill Browder

Bill BrowderBill Browder after the murder of his tax lawyer Sergey Magnitskiy gave up his life as a businessman and became a human rights activist. He was a founder and CEO of Hermitage Capital Management, which was the investment adviser to the largest foreign investment fund in Russia until 2005. He is also an author of the book "Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice" – on Magnitskiy case, one of the biggest tax fraud in the world ever. USD 230 m capital gains tax (paid upon the exit from Russia) refund was made by the Russian tax authorities within one day as of filing the request, no questions asked. Toronto Star wrote: "A tale that makes the dirty dealings of House of Cards look like Snow White.”The Guardian journalist: “It reads like a non-fiction version of a Mario Puzo thriller.”  The BalticsBill started the interview with why he accepted the invitation to this podcast – he likes the Baltic States, but also this is an important region to the Magnitskiy case, because the stolen money was flowing through the Baltics. Reading tableBill suggested a new book to your reading table – “Red Roulette: An Insider's Story of Wealth, Power, Corruption, and Vengeance in Today's China” by Desmond Shum. Released just in September 2021. CNN has described the book – the book China doesn’t want you to read. It’s about a businessman in China cutting in (sharing proceeds with) members of the China Communist party into the deals of the businessman. His wife was kidnapped for years ago, and a day before publishing the book she was released and asked not to publish it[1].The tax fraud – how exactly was it possible?Then we dive into the details of how the fraud actually happened. About a year after Bill was expelled from Russia and the companies were empty (all the assets were sold upon the exit and 230m in taxes - paid), police raided their offices and took all the documents of the companies, and registered the companies on a third person’s name. Then a bunch of fake contracts was created as a result of which the Bill’s former companies owed USD 1 bn to other companies. The ‘bad guys’ took the deals to the courts (the counterparties sued the former Bill’s companies to force them to pay the debt), and the courts confirmed the debt. Based on the debt USD 1 bn in profits turned into no profits on the balance sheets. That was the basis for the tax authorities to make the USD 230 m tax refund. How the fraud was discovered and the money &amp; assets bought - traced?Bill also told the story of how Magnitskiy discovered the fraud, and how he traced the money afterwards (there are videos on Youtube on the assets potentially purchased for the money). He also explained how the law needs to be changed (and has been changed recently, e.g. in the UK) in order to allow the authorities to fight against grey money flows around the global finance system. The unexplained wealth order in the UK now says – if the money seems suspicious the person who has the money has to prove it did not come from crime, instead of proving that the money has criminal origin (which sometimes is not possible). InvestigationsIn 16 countries there have been criminal investigations on the case, including the US - the Russian bad guys paid USD 6m settlement to the US government in order to avoid the trial there. Latvia and Belgium both convicted and seized the property. France also seized, and Switzerland seized USD 20 m, but paid 16m back. Cyprus opened the investigation, but never lifted a finger. In the UK Bill &amp; his team found more money than in any other place, but the UK never opened a criminal investigation, Bill suspects - because they do not want to stop Russian money to flow into London. Also the European Court of Human Rights decided in favour of Sergey Magnitskiy’s relatives (that Russia has violated the rights to life) – the litigation took 9-10 years, but the decision was without substantial consequences. The judgement can be found here[2]. Magnitskiy Act sanctionsAbout 35 people who have been involved in the crime are now on the sanctions list of the Magnitskiy act that has been adopted now in many countries, the US being the first, but also in the UK, Canada, the Baltics, etc. They will have trouble travelling, opening bank accounts, etc. [1] https://www.amazon.com/Red-Roulette-Insiders-Corruption-Vengeance/dp/1982156155[2] https://hudoc.echr.coe.int/eng#{%22itemid%22:[%22001-195527%22]}

Bill BrowderBill Browder after the murder of his tax lawyer Sergey Magnitskiy gave up his life as a businessman and became a human rights activist. He was a founder and CEO of Hermitage Capital Management, which was the investment adviser to the largest foreign investment fund in Russia until 2005. He is also an author of the book "Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice" – on Magnitskiy case, one of the biggest tax fraud in the world ever. USD 230 m capital gains tax (paid upon the exit from Russia) refund was made by the Russian tax authorities within one day as of filing the request, no questions asked. <ul><li>Toronto Star wrote: "A tale that makes the dirty dealings of House of Cards look like Snow White.”</li><li>The Guardian journalist: “It reads like a non-fiction version of a Mario Puzo thriller.”  </li></ul>The BalticsBill started the interview with why he accepted the invitation to this podcast – he likes the Baltic States, but also this is an important region to the Magnitskiy case, because the stolen money was flowing through the Baltics. Reading tableBill suggested a new book to your reading table – “Red Roulette: An Insider's Story of Wealth, Power, Corruption, and Vengeance in Today's China” by Desmond Shum. Released just in September 2021. CNN has described the book – the book China doesn’t want you to read. It’s about a businessman in China cutting in (sharing proceeds with) members of the China Communist party into the deals of the businessman. His wife was kidnapped for years ago, and a day before publishing the book she was released and asked not to publish it<a href="#_ftn1" rel="nofollow" target="_blank">[1]</a>.The tax fraud – how exactly was it possible?Then we dive into the details of how the fraud actually happened. About a year after Bill was expelled from Russia and the companies were empty (all the assets were sold upon the exit and 230m in taxes - paid), police raided their offices and took all the documents of the companies, and registered the companies on a third person’s name. Then a bunch of fake contracts was created as a result of which the Bill’s former companies owed USD 1 bn to other companies. The ‘bad guys’ took the deals to the courts (the counterparties sued the former Bill’s companies to force them to pay the debt), and the courts confirmed the debt. Based on the debt USD 1 bn in profits turned into no profits on the balance sheets. That was the basis for the tax authorities to make the USD 230 m tax refund. How the fraud was discovered and the money &amp; assets bought - traced?Bill also told the story of how Magnitskiy discovered the fraud, and how he traced the money afterwards (there are videos on Youtube on the assets potentially purchased for the money). He also explained how the law needs to be changed (and has been changed recently, e.g. in the UK) in order to allow the authorities to fight against grey money flows around the global finance system. The unexplained wealth order in the UK now says – if the money seems suspicious the person who has the money has to prove it did not come from crime, instead of proving that the money has criminal origin (which sometimes is not possible). InvestigationsIn 16 countries there have been criminal investigations on the case, including the US - the Russian bad guys paid USD 6m settlement to the US government in order to avoid the trial there. Latvia and Belgium both convicted and seized the property. France also seized, and Switzerland seized USD 20 m, but paid 16m back. Cyprus opened the investigation, but never lifted a finger. In the UK Bill &amp; his team found more money than in any other place, but the UK never opened a criminal investigation, Bill suspects - because they do not want to stop Russian money to flow into London. Also the European Court of Human Rights decided in favour of Sergey Magnitskiy’s relatives (that Russia has violated the rights to life) – the litigation took 9-10 years, but the decision was without substantial consequences. The judgement can be found here<a href="#_ftn2" rel="nofollow" target="_blank">[2]</a>. Magnitskiy Act sanctionsAbout 35 people who have been involved in the crime are now on the sanctions list of the Magnitskiy act that has been adopted now in many countries, the US being the first, but also in the UK, Canada, the Baltics, etc. They will have trouble travelling, opening bank accounts, etc. <a href="#_ftnref1" rel="nofollow" target="_blank">[1]</a> <a href="https://www.amazon.com/Red-Roulette-Insiders-Corruption-Vengeance/dp/1982156155" rel="nofollow" target="_blank">https://www.amazon.com/Red-Roulette-Insiders-Corruption-Vengeance/dp/1982156155</a><a href="#_ftnref2" rel="nofollow" target="_blank">[2]</a> <a href="https://hudoc.echr.coe.int/eng#{%22itemid%22:[%22001-195527%22]}" rel="nofollow" target="_blank">https://hudoc.echr.coe.int/eng#{%22itemid%22:[%22001-195527%22]}</a>

Bill Browder (Hermitage Capital) on the Magnitskiy case

VAT &amp; Customs boutiqueRonny was modest to relate this great achievement to a lack of competition (at least initially). He was also inspired at the beginning by the UK consultants who said that about 40% of their work is in VAT advice. More VAT than management Despite the company management duties Ronny still does client work ca 50-60% of his time. Being in a good shape technically gets the clients’ trust. For the business the international expert groups are also important, like VAT Europe network of friends and participation in the VAT expert group with the European Commission. PredictionsIt was an interesting story how Ronny started to work with VAT – by a chance, like many things happen in our lives. His predictions are that there will be no major changes to the VAT system, also the US will not adopt VAT most likely, and that IT impact in the firm will grow until it’s about 50/50 IT and tax firm. Ronny sees some good IT development also with the tax authorities in Europe, like real time reporting, e-invoicing, but not in Germany. Because of Covid-19 Ronny is working from home already for some 15 months, and many colleagues have become more efficient, because of the time saved for daily travelling, so flexible home offices might stay. Let’s go criminalIn Germany it is very easy to end up with criminal proceedings regarding a tax offence. For example, if there is a VAT return amendment for above EUR 5k a special unit of criminal investigations decides if it is worth opening criminal proceedings against the management of a firm, even if they just made a mistake, not committed a fraud. For large companies it’s very easy to exceed the thresholds. For example, it took KMLZ some 4-5 years to get the criminal charges dropped where the management of a client just made a mistake. Therefore companies in Germany are paying careful attention to VAT issues. So, during the last years companies have invested heavily into the tax risk assessments and compliance procedures, that is now often digitalised. We also discussed an aftermath and bugs of the new VAT system for e-commerce effective as of 1 July 2021. But overall Ronny was sceptical about any changes to the system that could prevent the fraudsters from doing their stuff. 

VAT &amp; Customs boutiqueRonny was modest to relate this great achievement to a lack of competition (at least initially). He was also inspired at the beginning by the UK consultants who said that about 40% of their work is in VAT advice. More VAT than management Despite the company management duties Ronny still does client work ca 50-60% of his time. Being in a good shape technically gets the clients’ trust. For the business the international expert groups are also important, like VAT Europe network of friends and participation in the VAT expert group with the European Commission. PredictionsIt was an interesting story how Ronny started to work with VAT – by a chance, like many things happen in our lives. His predictions are that there will be no major changes to the VAT system, also the US will not adopt VAT most likely, and that IT impact in the firm will grow until it’s about 50/50 IT and tax firm. Ronny sees some good IT development also with the tax authorities in Europe, like real time reporting, e-invoicing, but not in Germany. Because of Covid-19 Ronny is working from home already for some 15 months, and many colleagues have become more efficient, because of the time saved for daily travelling, so flexible home offices might stay. Let’s go criminalIn Germany it is very easy to end up with criminal proceedings regarding a tax offence. For example, if there is a VAT return amendment for above EUR 5k a special unit of criminal investigations decides if it is worth opening criminal proceedings against the management of a firm, even if they just made a mistake, not committed a fraud. For large companies it’s very easy to exceed the thresholds. For example, it took KMLZ some 4-5 years to get the criminal charges dropped where the management of a client just made a mistake. Therefore companies in Germany are paying careful attention to VAT issues. So, during the last years companies have invested heavily into the tax risk assessments and compliance procedures, that is now often digitalised. We also discussed an aftermath and bugs of the new VAT system for e-commerce effective as of 1 July 2021. But overall Ronny was sceptical about any changes to the system that could prevent the fraudsters from doing their stuff.

Ronny Langer (KMLZ) on his Tier 1 VAT boutique

We started with a brief chat about Belarus – Joel’s ancestors come from there and Michael remembers his mission to Belarus in mid-90ies to help them with the tax policy issues. Joel used to play some tennis, golf and basketball. Michael is Chelsea supporter and was a bit bitter to remember the disappointment at the recent European Championships finals at the Wembley. Why tax?Michael started working with tax because of an inspiring mentor and teacher at the Oxford University. Joel told a similar reason – his professor at the Princeton University, but he also was fascinated by the fact that the subject of his studies could easily be at the front page of a newspaper the next day, because a lot of people care about it. And it is very true still today. Suggested non-tax readingA book both Joel and Michael would recommend is A Gentleman in Moscow by Amor Towles [1]. Joel also recalls a historic book Alaric the Goth: An Outsider's History of the Fall of Rome by Douglas Boin that also has a tax angle – Rome granted citizenship also because of collecting inheritance tax.[2] From podcasts Michael admits he sometimes listens to history podcasts like “Revolutions” by Mike Duncan. The new bookThen we switch to Joel’s received an Ig Nobel Prize for a paper concluding that people find a way to postpone their deaths, if that would qualify them for a lower rate on the inheritance tax. The prize is to "honour achievements that first make people laugh, and then make them think". This might be a summary of why both decided to create the latest book -Rebellion, Rascals and Revenue that consists of different fun facts and historic stories related to taxation from around the world. The stories try to illuminate some of the main principles of taxation in a light and entertaining way. Michael admits that some of the stories in the book have no useful lesson at all, but are included just for fun. Joel adds that the book might also be a gift to people in the tax business to inspire them to prove at cocktail parties that the profession is not as dry as one may think. Tax storiesIf both need to choose a story from the book, Joel told one about the beard tax in Russia, but Michael – a bachelor’s tax in Argentina. Both were intended to change behaviours (shave and get married) rather than to collect revenue. That quite often is still the main reason for many of taxes nowadays. Helicopter view on taxation nowWe also had a chat on some of the typical tax issues still in the current systems. The progressive income tax seems more to be of an ethical and solidarity issue. Both are not fans of wealth taxation as a new tax, but rather countries should look at effectiveness of the current capital gains tax. Eastern Europe does not seem to be so special with their systems, but a relative simplicity of the systems is an advantage. VAT fraud gets a lot of press, but the corporate tax one may be equally important. VAT vs. Sales taxJoel thinks that US retail sales tax might be more vulnerable to fraud than VAT. And Michael tells a nice example from the book about how initially consumption of gin was taxed at the retail stage until the government realised that collection of the tax at the wholesale is much easier – this may also highlight an aspect of VAT benefits over the sales tax. Pillar 1 &amp; 2 On 1 July 2021 the shape of Pillar 1 &amp; 2 was announced (taxation of multinationals in the market countries &amp; global minimum corporate tax) - Michael certainly welcomes those changes and believes it is a big step forward in the international cooperation as suggested in the book. Joel hopes the global minimum tax will address the issue of offshore (non)taxation, but it might not be easy to implement.  [1] https://www.goodreads.com/book/show/34066798-a-gentleman-in-moscow : “A Gentleman in Moscow immerses us in another elegantly drawn era with the story of Count Alexander Rostov. When, in 1922, he is deemed an unrepentant aristocrat by a Bolshevik tribunal, the count is sentenced to house arrest in the Metropol, a grand hotel across the street from the Kremlin. Rostov, an indomitable man of erudition and wit, has never worked a day in his life, and must now live in an attic room while some of the most tumultuous decades in Russian history are unfolding outside the hotel’s doors. Unexpectedly, his reduced circumstances provide him a doorway into a much larger world of emotional discovery.”[2] https://www.amazon.com/Alaric-Goth-Outsiders-History-Fall/dp/0393635694 : “Denied citizenship by the Roman Empire, a soldier named Alaric changed history by unleashing a surprise attack on the capital city of an unjust empire.”

We started with a brief chat about Belarus – Joel’s ancestors come from there and Michael remembers his mission to Belarus in mid-90ies to help them with the tax policy issues. Joel used to play some tennis, golf and basketball. Michael is Chelsea supporter and was a bit bitter to remember the disappointment at the recent European Championships finals at the Wembley. Why tax?Michael started working with tax because of an inspiring mentor and teacher at the Oxford University. Joel told a similar reason – his professor at the Princeton University, but he also was fascinated by the fact that the subject of his studies could easily be at the front page of a newspaper the next day, because a lot of people care about it. And it is very true still today. Suggested non-tax readingA book both Joel and Michael would recommend is A Gentleman in Moscow by <a href="https://www.goodreads.com/author/show/4536964.Amor_Towles" rel="nofollow" target="_blank">Amor Towles</a><a href="#_ftn1" rel="nofollow" target="_blank"> [1]</a>. Joel also recalls a historic book Alaric the Goth: An Outsider's History of the Fall of Rome by <a href="https://www.amazon.com/Douglas-Boin/e/B009WS8DE6/ref=dp_byline_cont_book_1" rel="nofollow" target="_blank">Douglas Boin</a> that also has a tax angle – Rome granted citizenship also because of collecting inheritance tax.<a href="#_ftn2" rel="nofollow" target="_blank">[2] </a>From podcasts Michael admits he sometimes listens to history podcasts like “Revolutions” by Mike Duncan. The new bookThen we switch to Joel’s received an <a href="https://en.wikipedia.org/wiki/Ig_Nobel_Prize" rel="nofollow" target="_blank">Ig Nobel Prize</a> for a paper concluding that people find a way to postpone their deaths, if that would qualify them for a lower rate on the <a href="https://en.wikipedia.org/wiki/Inheritance_tax" rel="nofollow" target="_blank">inheritance tax</a>. The prize is to "honour achievements that first make people laugh, and then make them think". This might be a summary of why both decided to create the latest book -Rebellion, Rascals and Revenue that consists of different fun facts and historic stories related to taxation from around the world. The stories try to illuminate some of the main principles of taxation in a light and entertaining way. Michael admits that some of the stories in the book have no useful lesson at all, but are included just for fun. Joel adds that the book might also be a gift to people in the tax business to inspire them to prove at cocktail parties that the profession is not as dry as one may think. Tax storiesIf both need to choose a story from the book, Joel told one about the beard tax in Russia, but Michael – a bachelor’s tax in Argentina. Both were intended to change behaviours (shave and get married) rather than to collect revenue. That quite often is still the main reason for many of taxes nowadays. Helicopter view on taxation nowWe also had a chat on some of the typical tax issues still in the current systems. The progressive income tax seems more to be of an ethical and solidarity issue. Both are not fans of wealth taxation as a new tax, but rather countries should look at effectiveness of the current capital gains tax. Eastern Europe does not seem to be so special with their systems, but a relative simplicity of the systems is an advantage. VAT fraud gets a lot of press, but the corporate tax one may be equally important. VAT vs. Sales taxJoel thinks that US retail sales tax might be more vulnerable to fraud than VAT. And Michael tells a nice example from the book about how initially consumption of gin was taxed at the retail stage until the government realised that collection of the tax at the wholesale is much easier – this may also highlight an aspect of VAT benefits over the sales tax. Pillar 1 &amp; 2 On 1 July 2021 the shape of Pillar 1 &amp; 2 was announced (taxation of multinationals in the market countries &amp; global minimum corporate tax) - Michael certainly welcomes those changes and believes it is a big step forward in the international cooperation as suggested in the book. Joel hopes the global minimum tax will address the issue of offshore (non)taxation, but it might not be easy to implement.  <a href="#_ftnref1" rel="nofollow" target="_blank">[1]</a> <a href="https://www.goodreads.com/book/show/34066798-a-gentleman-in-moscow" rel="nofollow" target="_blank">https://www.goodreads.com/book/show/34066798-a-gentleman-in-moscow</a> : “A Gentleman in Moscow immerses us in another elegantly drawn era with the story of Count Alexander Rostov. When, in 1922, he is deemed an unrepentant aristocrat by a Bolshevik tribunal, the count is sentenced to house arrest in the Metropol, a grand hotel across the street from the Kremlin. Rostov, an indomitable man of erudition and wit, has never worked a day in his life, and must now live in an attic room while some of the most tumultuous decades in Russian history are unfolding outside the hotel’s doors. Unexpectedly, his reduced circumstances provide him a doorway into a much larger world of emotional discovery.”<a href="#_ftnref2" rel="nofollow" target="_blank">[2]</a> <a href="https://www.amazon.com/Alaric-Goth-Outsiders-History-Fall/dp/0393635694" rel="nofollow" target="_blank">https://www.amazon.com/Alaric-Goth-Outsiders-History-Fall/dp/0393635694</a> : “Denied citizenship by the Roman Empire, a soldier named Alaric changed history by unleashing a surprise attack on the capital city of an unjust empire.”

Michael Keen (IMF) & Joel Slemrod (University of Michigan) on their new book on Tax Stories from the past

Jens Svolgaard – Getting inside ourselvesBoltIt takes a while to describe the complexity of different disruptive ideas Bolt (an Estonian unicorn with ~3k employees, 50M customers, 1.5m drivers in 40+ countries, 95% of drivers rated 4.9) has already implemented. Bolt scooter rides are now available in more than 100 cities across Europe, that highlights the company’s sustainability focus. GuitarsDavid Gilmour (Pink Floyd), Angus Young (AC/DC), Slash (Guns N’ Roses) – are the favourite guitar players of Jens, but the one on his Facebook profile is a replica of 1959, the one Slash used to play. Personal developmentWhile having a break from business for more than a year Jens started to learn two therapist programmes about the personal development, better understanding of ourselves, that have transformed his life fundamentally. We are not our body and feelings, we have ones. The programmes help to find the wounds, open the lid and work with them. Once you sort these things out it reflects on quality of life and relationships, especially with the ones that matter the most. Jens is sure that if all world leaders would do the intro workshops of the Learning Love Institute program, we would have no wars on the planet. He also recommended some further reading on this and some links. Books:Eckhart Tolle: "The power of Now" &amp; "A New Earth"Bessel Van Der Kolk: "The Body Keeps The Score"Pete Walker: "The Tao Of Fully Feeling"Peter A. Levine: "In An Unspoken Voice"John Bradshaw. "Healing The Shame That Binds You"Shefali Tsabary: "The Awakened Family"Stephen W. Porges. "The Polyvagal Theory"Marshall B. Rosenberg: "Nonviolent Communication"Krish &amp; Amana Trobe: "The Learning Love Handbooks" 1, 2 and 3Links:https://www.learningloveinstitute.com/https://pathretreats.com/https://www.baravara.se/https://www.hellingerinstitute.com/family-constellations-trainings/Tax storyIn the story part Jens remembers his experience when the corporate structures were driven by tax benefits, and that might lead to some absurd situations from today’s perspective where business decisions were taken depending on tax consequences, like if a person can move to a place where a better business can be done. Tax issuesIt may seem that the tax treaty network of Estonia (61) is pretty decent, but if one compares to the network of the Netherlands (111) where the biggest competitor is based, Jens suggests that Bolt can feel the difference. Taxing consumption in addition to the consumption taxOECD Pillar 1 (corporate taxation in the country of consumption, not where the value is created, in addition to the consumption taxes) seems to become an illogical burden on the business of e-commerce as well. The good and badNevertheless, Estonia, the Netherlands, Denmark, Sweden come to Jens mind when speaking of the best tax systems in the world, including their tax authorities. Jens considers the Digital Services tax as meaningless. The US, Brasil, India and some of the African countries come to Jens mind as the most difficult systems. Jens mentioned an example from the South Africa where an interest on a waived penalty was assessed by their tax authorities. Choosing outsourced advisorsAs the main criteria besides capacity and experience is personalities of the advisors that would create the best synergies, notwithstanding if they work for Big4, or an international or local law firms. Not paying reasonable money for the top quality advice is the dumbest thing you can do in tax. 

Jens Svolgaard – Getting inside ourselvesBoltIt takes a while to describe the complexity of different disruptive ideas Bolt (an Estonian unicorn with ~3k employees, 50M customers, 1.5m drivers in 40+ countries, 95% of drivers rated 4.9) has already implemented. Bolt scooter rides are now available in more than 100 cities across Europe, that highlights the company’s sustainability focus. GuitarsDavid Gilmour (Pink Floyd), Angus Young (AC/DC), Slash (Guns N’ Roses) – are the favourite guitar players of Jens, but the one on his Facebook profile is a replica of 1959, the one Slash used to play. Personal developmentWhile having a break from business for more than a year Jens started to learn two therapist programmes about the personal development, better understanding of ourselves, that have transformed his life fundamentally. We are not our body and feelings, we have ones. The programmes help to find the wounds, open the lid and work with them. Once you sort these things out it reflects on quality of life and relationships, especially with the ones that matter the most. Jens is sure that if all world leaders would do the intro workshops of the Learning Love Institute program, we would have no wars on the planet. He also recommended some further reading on this and some links. Books:<ul><li>Eckhart Tolle: "The power of Now" &amp; "A New Earth"</li><li>Bessel Van Der Kolk: "The Body Keeps The Score"</li><li>Pete Walker: "The Tao Of Fully Feeling"</li><li>Peter A. Levine: "In An Unspoken Voice"</li><li>John Bradshaw. "Healing The Shame That Binds You"</li><li>Shefali Tsabary: "The Awakened Family"</li><li>Stephen W. Porges. "The Polyvagal Theory"</li><li>Marshall B. Rosenberg: "Nonviolent Communication"</li><li>Krish &amp; Amana Trobe: "The Learning Love Handbooks" 1, 2 and 3</li></ul>Links:<ul><li><a href="https://www.learningloveinstitute.com/" rel="nofollow" target="_blank">https://www.learningloveinstitute.com/</a></li><li><a href="https://pathretreats.com/" rel="nofollow" target="_blank">https://pathretreats.com/</a></li><li><a href="https://www.baravara.se/" rel="nofollow" target="_blank">https://www.baravara.se/</a></li><li><a href="https://www.hellingerinstitute.com/family-constellations-trainings/" rel="nofollow" target="_blank">https://www.hellingerinstitute.com/family-constellations-trainings/</a></li></ul>Tax storyIn the story part Jens remembers his experience when the corporate structures were driven by tax benefits, and that might lead to some absurd situations from today’s perspective where business decisions were taken depending on tax consequences, like if a person can move to a place where a better business can be done. Tax issuesIt may seem that the tax treaty network of Estonia (61) is pretty decent, but if one compares to the network of the Netherlands (111) where the biggest competitor is based, Jens suggests that Bolt can feel the difference. Taxing consumption in addition to the consumption taxOECD Pillar 1 (corporate taxation in the country of consumption, not where the value is created, in addition to the consumption taxes) seems to become an illogical burden on the business of e-commerce as well. The good and badNevertheless, Estonia, the Netherlands, Denmark, Sweden come to Jens mind when speaking of the best tax systems in the world, including their tax authorities. Jens considers the Digital Services tax as meaningless. The US, Brasil, India and some of the African countries come to Jens mind as the most difficult systems. Jens mentioned an example from the South Africa where an interest on a waived penalty was assessed by their tax authorities. Choosing outsourced advisorsAs the main criteria besides capacity and experience is personalities of the advisors that would create the best synergies, notwithstanding if they work for Big4, or an international or local law firms. Not paying reasonable money for the top quality advice is the dumbest thing you can do in tax.

Jens Svolgaard (Bolt) on e-commerce & personal development

For many years both, Dr. Hannes Gurtner and Dr. Clemens Nowotny are tax partners of a leading tax firm in Austria and CEE – LeitnerLeitner. Hannes is specialised on VAT, but Clemens – on international tax, although both are auditors as well. Social media, reading, direct contactWe started the conversation about LinkedIn and social media at all – Hannes is not there, because he rather prefers a personal contact. This seems to be a luxury Hannes enjoys – not to check the screens every 5 minutes and dedicate time to the family. It’s an interesting approach – reading mostly technical literature, no focus on social media, just client direct relations. I recently read in a book by a psychologist that this nowadays becomes a privilege of strong personalities, but a correct one – to set borders between work and personal life. Teaching as an artNot only both love teaching, but Hannes compared it to an entertainment, almost like an artist on a stage. One can feel how much both enjoy their profession and do it with all their hearts. Why Austria is 14th richest country?It was revealing to learn that many high net worth individuals move to live in Austria. Clemens well describes – why and is it because of the tax system. In Austria the highest personal income tax bracket is above EUR 60k – 50%; &gt; 1m – 55%. Salaries average from 4k to 17k. Clemens explained why this high tax did not create an emigration of the best brain from Austria, but had quite an opposite effect. SchumpeterWe also spoke of Mr. Schumpeter – the Austrian Minister of Finance a century ago. A column in the Economist is named by him. He’s been praised as a champion of innovation and entrepreneurship. We touched upon – could he have an impact on the current tax system in Austria. Also - Wikipedia says Austria is the 14th richest country in terms of GDP per capita – is it partially because of the tax system?1896 tax reformAustria had a tax reform in 1896. There was a high distrust in the system &amp; evasion before the reform. “It was the high rates that dug the grave for the Austrian tax morale.” The reform introduced the ability-to-pay principle; lowered taxes on businesses and real estate, commissions by taxpayers – intermediaries between taxpayers and authorities; stricter penalties (3x –&gt; 9x), more rights by taxpayers to defend and reach a fair result. The reform lasted for 15 years, with a substantial increase of taxes collected. Some authors say it was a break-though in the Austrian tax system. One taka-away might be that politicians are looking for short term results (3-4 years), whereas tax policy should be a long term play. VAT fraud still killing the economyIn many CEE countries the tax authorities more often attack exporters rights to apply 0% VAT on the sales, based on the murky answers by the foreign buyer to their tax authorities – we discussed with Hannes - could these attacks ever end, e.g. with the new VAT system approaching soon in the EU? He admits that it kills the economy that 0.1% fraudsters cause the authorities to scrutinise 99.9% of the others with heavy compliance burden. Hannes rather sees technology advancement as a solution, but it needs a unified approach. 

For many years both, Dr. Hannes Gurtner and Dr. Clemens Nowotny are tax partners of a leading tax firm in Austria and CEE – LeitnerLeitner. Hannes is specialised on VAT, but Clemens – on international tax, although both are auditors as well. Social media, reading, direct contactWe started the conversation about LinkedIn and social media at all – Hannes is not there, because he rather prefers a personal contact. This seems to be a luxury Hannes enjoys – not to check the screens every 5 minutes and dedicate time to the family. It’s an interesting approach – reading mostly technical literature, no focus on social media, just client direct relations. I recently read in a book by a psychologist that this nowadays becomes a privilege of strong personalities, but a correct one – to set borders between work and personal life. Teaching as an artNot only both love teaching, but Hannes compared it to an entertainment, almost like an artist on a stage. One can feel how much both enjoy their profession and do it with all their hearts. Why Austria is 14th richest country?It was revealing to learn that many high net worth individuals move to live in Austria. Clemens well describes – why and is it because of the tax system. In Austria the highest personal income tax bracket is above EUR 60k – 50%; &gt; 1m – 55%. Salaries average from 4k to 17k. Clemens explained why this high tax did not create an emigration of the best brain from Austria, but had quite an opposite effect. SchumpeterWe also spoke of Mr. Schumpeter – the Austrian Minister of Finance a century ago. A column in the Economist is named by him. He’s been praised as a champion of innovation and entrepreneurship. We touched upon – could he have an impact on the current tax system in Austria. Also - Wikipedia says Austria is the 14th richest country in terms of GDP per capita – is it partially because of the tax system?1896 tax reformAustria had a tax reform in 1896. There was a high distrust in the system &amp; evasion before the reform. “It was the high rates that dug the grave for the Austrian tax morale.” The reform introduced the ability-to-pay principle; lowered taxes on businesses and real estate, commissions by taxpayers – intermediaries between taxpayers and authorities; stricter penalties (3x –&gt; 9x), more rights by taxpayers to defend and reach a fair result. The reform lasted for 15 years, with a substantial increase of taxes collected. Some authors say it was a break-though in the Austrian tax system. One taka-away might be that politicians are looking for short term results (3-4 years), whereas tax policy should be a long term play. VAT fraud still killing the economyIn many CEE countries the tax authorities more often attack exporters rights to apply 0% VAT on the sales, based on the murky answers by the foreign buyer to their tax authorities – we discussed with Hannes - could these attacks ever end, e.g. with the new VAT system approaching soon in the EU? He admits that it kills the economy that 0.1% fraudsters cause the authorities to scrutinise 99.9% of the others with heavy compliance burden. Hannes rather sees technology advancement as a solution, but it needs a unified approach.

Clemens Nowotny & Hannes Gurtner (LeitnerLeitner, Taxand) on teaching as an art

Mair Linzen manages to chair both the largest law firm of Israel (Herzog, Fox &amp; Neeman) and its best tax practice, as recognised by many independent reviews. Links with LatviaWe started the conversation with a fact that not many in Israel now the Baltic states and Latvia, but there is a lot in common. Meir’s spouse is from Latvia and he told about a lot of significant connections between those two countries – it was a miracle how a person with Latvian origins helped to preserve Hebrew language, for example. Also, Latvian chocolate factory Laima belonged to a Jewish family before the World War. The government forced them to sell Laima and with that money the family established a similar factory in Israel – so their chocolate to a large extent has Latvian roots. Musician Mischa Maisky was born in Riga, and there are some good examples of Israeli politicians with the Latvian roots. For your reading tableMeir has an extensive variety of interests besides the work – reading (non-fiction, especially on history), classical music, travelling. For your reading table Meir suggested Israeli writers Amos Oz, and two Nobel Prize winners in literature - Shmuel Agnon and Isaac Bashevis Singer.Immigration boost to the economyWhen about 1 million people came from the ex-Soviet Union when it collapsed many thought it will destroy the economy of Israel, but quite the opposite happened. Now the IT sector is booming to a large extent thanks to the 2nd generation of those immigrants. Tax storyThe tax story this time has a funny element – will not spoil the fun – you have to listen to it for yourself. How fair is progressive income taxWe also discussed how fair is the progressive income taxation. Meir kindly shared his view that the more educated and paid have a certain responsibility for the less well paid. Also in the times like with the Covid-19 crisis the governments took most of the burden. In times like that the less educated are also less protected, have less choices. He explained this moral responsibility through his own example – professionals may work through a company and pay 23% on dividends, while the secretary would pay 35-40%. Thus Meir chose to work as an individual and pay 50% tax. Any country needs a well-functioning government, state defence, health-care and education systems. The balance of the progressive income taxation is that there is a rule of thumb that people should be left with at least 50% of their income. On meaningful tax incentivesPost-war Seoul built a part of the city by granting tax incentives for moving there. Meir mentioned some examples of tax incentives in Israel that can impact behaviour – for those living in the periphery, for technological companies, big US multinationals that have presence in Israel pay only 4% of corporate tax. Cat and mouse game will go onMeir predicts that despite the latest transparency and fair taxation initiatives people and businesses will use their rights to pay as little tax as the law permits, with a help of creative tax lawyers. For the quality tax lawyers any structure so far already went hand in hand with its economic substance – in that sense the latest OECD initiatives are nothing new. 

Mair Linzen manages to chair both the largest law firm of Israel (Herzog, Fox &amp; Neeman) and its best tax practice, as recognised by many independent reviews. Links with LatviaWe started the conversation with a fact that not many in Israel now the Baltic states and Latvia, but there is a lot in common. Meir’s spouse is from Latvia and he told about a lot of significant connections between those two countries – it was a miracle how a person with Latvian origins helped to preserve Hebrew language, for example. Also, Latvian chocolate factory Laima belonged to a Jewish family before the World War. The government forced them to sell Laima and with that money the family established a similar factory in Israel – so their chocolate to a large extent has Latvian roots. Musician Mischa Maisky was born in Riga, and there are some good examples of Israeli politicians with the Latvian roots. For your reading tableMeir has an extensive variety of interests besides the work – reading (non-fiction, especially on history), classical music, travelling. For your reading table Meir suggested Israeli writers Amos Oz, and two Nobel Prize winners in literature - Shmuel Agnon and Isaac Bashevis Singer.Immigration boost to the economyWhen about 1 million people came from the ex-Soviet Union when it collapsed many thought it will destroy the economy of Israel, but quite the opposite happened. Now the IT sector is booming to a large extent thanks to the 2nd generation of those immigrants. Tax storyThe tax story this time has a funny element – will not spoil the fun – you have to listen to it for yourself. How fair is progressive income taxWe also discussed how fair is the progressive income taxation. Meir kindly shared his view that the more educated and paid have a certain responsibility for the less well paid. Also in the times like with the Covid-19 crisis the governments took most of the burden. In times like that the less educated are also less protected, have less choices. He explained this moral responsibility through his own example – professionals may work through a company and pay 23% on dividends, while the secretary would pay 35-40%. Thus Meir chose to work as an individual and pay 50% tax. Any country needs a well-functioning government, state defence, health-care and education systems. The balance of the progressive income taxation is that there is a rule of thumb that people should be left with at least 50% of their income. On meaningful tax incentivesPost-war Seoul built a part of the city by granting tax incentives for moving there. Meir mentioned some examples of tax incentives in Israel that can impact behaviour – for those living in the periphery, for technological companies, big US multinationals that have presence in Israel pay only 4% of corporate tax. Cat and mouse game will go onMeir predicts that despite the latest transparency and fair taxation initiatives people and businesses will use their rights to pay as little tax as the law permits, with a help of creative tax lawyers. For the quality tax lawyers any structure so far already went hand in hand with its economic substance – in that sense the latest OECD initiatives are nothing new.

Meir Linzen (Herzog, Fox & Neeman) - How can I pay 23% while my secretary – 40%?

Life stories of people dealing with tax, from all over the world. Stories for, about and by businesses, fraudsters, judges, attorneys-at-law, prosecutors, authorities, politicians, professors, writers, journalists. Your host with more than 25 y. experience in tax has some stories too. The host can be reached at: janis.taukacs@sorainen.com Music by Karlis Lacis; Cover art by Mara Vulfa

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