An experienced Human Resources Director who formulates and initiates talent management strategies to attract and retain exceptional people – providing an excellent work environment so that they work in tandem with the organisation’s business goals, which in turn results in client satisfaction and business performance.
Mid-tier firms emerging as attractive options for new careers
August 22, 2024
Today’s smaller accountancy firms have undergone significant transformation compared to a decade ago. The accountancy profession is evolving rapidly, with small and medium-sized practices (SMPs) leading the charge, making them dynamic and promising environments for launching a finance career. Neil Johnson, editor at ACCA Careers, recently discussed this shift with Shibu Abraham, director of HR and administration at Kreston Menon in the UAE. Access the full article here, or read a summary down below.
Exposure and Growth
Mid-tier firms are increasingly appealing to top talent by offering diverse experiences, broader responsibilities, and the chance to build meaningful client relationships, which larger firms may not provide.
Shibu Abraham notes, “Big firms always had the edge in the war for talent, but recently market dynamics have changed. We can provide exposure to diverse industries and a variety of assignments. People get the chance to wear many hats and be involved in all aspects of an assignment rather than do a bit of work on a big project. If you’re willing to roll up your sleeves, take on more responsibility and upskill to better service clients, mid-tier firms offer unparalleled growth opportunities. With us, you get to become our clients’ trusted partners.”
Credible brands
At Kreston, mentoring and feedback are highly valued and informal and personal, as opposed to rigid or overly structured. “The partners and managers are inclined to support the growth of young professionals in their teams,” says Shibu. “You don’t have to wait for the annual performance reviews to analyse training and development needs. As the projects are short-term compared to large firms, interim and assignment-based performance appraisals are possible. The pat on the back matters.”
Competitive salaries
While small firms may struggle to match their larger counterparts in salaries, mid-tier firms are beginning to see parity. “Our salaries and benefits are almost on par, or at times better than the largest firms for the right talent,” shared Shibu. “We do understand that there is a cost involved in attracting and retaining talent, and we are up for it.”
Shibu highlights how mid-tier firms are increasingly competitive in compensation, recognising the importance of investing in top talent to attract and retain skilled professionals.
News
Anna Kupprion
Tax Consultant at Kreston Bansbach
Anna Kupprion is a Tax Consultant at Kreston Bansbach (Germany). She starts her career at a Big Four accounting firm and joined Kreston Bansbach in 2017. She provides expert advice on international tax issues (particularly transfer pricing) and also works on international tax questions such as double taxation agreements and withholding tax and can assist you in the best possible way.”
Andreas Katz
Tax advisor and certified public accountant, Kreston Bansbach
Andreas studied economics at the university of Hohenheim (Stuttgart) and graduated as Diplom-Ökonom (Master in economics). He joined Kreston Bansbach in 2010 starting in audit. After passing the examinations as tax advisor and certified public accountant he moved to the tax department of Kreston Bansbach in 2015 and since then focuses on international taxation, in particular transfer pricing, for a wide variety of clients from different industries. His main areas of work include transfer pricing planning, transfer pricing documentations, supporting clients in tax audits and overseeing mutual agreement procedures. Besides transfer pricing he also works on other international tax questions, for example relating to double taxation agreements and withholding taxes, issues of national taxation in Germany as well as due diligence and mergers & acquisitions.
Transfer pricing in Germany: Prepare for tax audits
Recent amendments to transfer pricing in Germany have brought significant changes to the country’s procedural law, particularly affecting transfer pricing documentation requirements.
These new regulations will take effect:
For all tax periods beginning after December 31, 2024 and
For all tax audits initiated after January 1, 2025
Given that prior tax periods, including those as far back as 2018, may still be subject to tax audits in 2025, these new regulations have a broad scope, making it imperative for taxpayers to be fully informed and prepared.
Key changes to transfer pricing in Germany
On-demand transfer pricing documentation
Previously, transfer pricing documentation was generally requested only during tax audits, with a 60-day deadline (or 30 days for extraordinary transactions) following a tax auditor’s request. The new regulations empower tax authorities to request transfer pricing documentation at any time, even outside of a formal audit and without specific cause. German companies with cross-border transactions must now be prepared to provide transfer pricing documentation at any time.
Reduced submission deadlines
The current 60-day deadline (30 days for extraordinary transactions) to submit requested transfer pricing documentation will be reduced to 30 days under the new rules.
Mandatory submission during tax audits
During a tax audit, taxpayers will no longer receive a separate request for transfer pricing documentation. Instead, they must submit the documentation within 30 days of the tax audit announcement, which could be well before the auditor actually begins their review. This change necessitates that taxpayers prepare their documentation in advance, as the 30-day window is unlikely to allow sufficient time for adequate preparation. Extensions will only be granted in exceptional cases.
Stricter penalties for non-compliance
The new regulations impose stricter penalties for delays or failures in submitting transfer pricing documentation. Previously, surcharges were rarely enforced due to auditor discretion. However, under the new rules, discretion is significantly reduced. If documentation is not submitted or is deemed unusable, surcharges of 5%-10% of the additional income (with a minimum of EUR 5,000) may apply. Late submissions may incur surcharges of up to EUR 1 million, with a minimum of EUR 100 for each day the deadline is exceeded. Furthermore, failure to provide documentation and unusable documentation could result in the tax authorities estimating the tax base, potentially leading to substantial additional tax liabilities.
Recommendation
We strongly advise reviewing the applicable thresholds in Germany for the preparation of transfer pricing documentation (including master and local files) if your German entities engage in cross-border transactions with related companies, especially for years not yet audited.
If these thresholds are exceeded, it is prudent to prepare the necessary documentation in advance to ensure compliance with the 30-day submission deadline once an audit order is issued after December 31, 2024.
Master-file
Local-file
German thresholds
Individual turnover of the German company > EUR 100 million
Total consideration for deliveries> EUR 6 million and/or total remuneration for other services (e.g. services, loan relationships, licenses, interests, etc.) > EUR 0.6 million
Please note, the deliveries/services received and those provided must be added together. Only cross-border transactions with related parties are to be included in the thresholds. Transactions between domestic members of a group are not relevant.
If you are interested in doing business in Germany, please contact us here.
News
Mersen Oceania and Bentleys Victoria, Australia
August 21, 2024
In Australia, Mersen Oceania has operated for over 65 years, with Financial Controller Slobodan Brzica, who has 25 years of experience, overseeing the financial operations. Mersen, a global leader in electrical power and advanced materials, has been serving high-tech industries for over 130 years.
Mersen Oceania’s new auditor
When Mersen Oceania sought to appoint a new external auditor, they needed a partner who understood their complex business, provided expert auditing services, and offered value for money. The transition to a new auditing partner was critical, as it had to ensure continuity and compliance with the strict reporting deadlines set by Mersen’s global headquarters.
Choosing Bentleys Victoria
Bentleys Victoria was selected as the new auditing partner due to its robust auditing expertise. Bentleys Victoria developed a detailed project plan that focused on conducting a comprehensive audit while adhering to the necessary reporting deadlines, incorporating technology to streamline the audit process and established clear timelines to meet all global reporting requirements efficiently. From the outset, Bentleys Victoria demonstrated a deep understanding of Mersen Oceania’s operations and their approach provided valuable insights and recommendations that were well-received by Mersen’s Board of Directors. Slobodan Brzica commented: “Impressive. The team is dynamic and we are pleased with the recommendations and suggested actions.”
Ongoing support
A key factor in the success of this partnership has been the continuity of Bentleys Victoria’ team, which has allowed for the retention and sharing of critical knowledge. This consistency ensures that even as team members change, the quality of the audit remains consistently high, supported by a strong technical foundation and an intimate knowledge of Mersen Oceania’s business. Bentleys Victoria successfully met the tight global reporting deadlines, completing the audit within two months. Their efficient and effective service delivery continues to support Mersen Oceania’s commitment to innovation and excellence.
Slobodan Brzica concluded: “The transition was impressive and their understanding of our business was evident from the start. They are a team of real professionals and switched on.”
Chris Spurio has over three decades of experience in accounting, financial management, and leadership within the professional services industry. He has been with CBIZ, Inc. since 1998, serving in various high-level roles. In January 2014, Chris was appointed President of the Financial Services Group, overseeing the strategic direction, growth, and performance of CBIZ's financial services division. His expertise lies in driving operational efficiencies, financial strategy, and fostering client relationships across the Midwest region. Before becoming President, Chris held the position of Chief Operating Officer of the Financial Services Group, after successfully leading as the Group’s Executive Managing Director for the Midwest. Prior to joining CBIZ, Chris spent nearly a decade at KPMG LLP, where he developed his foundational skills in accounting and financial advisory services.
Chris is a Certified Public Accountant (CPA) and Chartered Global Management Accountant (CGMA), and he maintains memberships with the American Institute of Certified Public Accountants (AICPA) and the Ohio Society of CPAs. His leadership and extensive industry knowledge have been instrumental in CBIZ's financial services success.
CBIZ to acquire Marcum, strengthening market position
August 5, 2024
CBIZ’s acquisition of Marcum will open new territory for Kreston members while furthering its technology offerings. The CBIZ/Marcum deal will make the company the seventh-largest accounting services provider in the US, surpassing Grant Thornton. The merger will bring 35,000 new clients to CBIZ, as well as new services through innovative technology.
‘Marcum has solid industry expertise, bolstering our knowledge in key industries,’ said Chris Spurio, President of Financial Services at CBIZ. ‘This means our ability to provide solutions for clients along industry lines is greatly enhanced. We can expand our footprint in terms of the kind of clients we can service.’
Marcum’s clients new to CBIZ will need the services that Kreston members can provide. ‘Marcum has a strong growth culture, and it has been at the forefront of technology innovation,’ said Spurio.
Upon close, the acquisition will also put CBIZ back into the public company sector. CBIZ exited this area as it simply did not have the scale, but through Marcum, it will have a USD 150 million practice that has the scale and expertise to make the combined company a major player.
Joining forces with Marcum will also help CBIZ win the war for talent. A skills shortage is dogging every accountancy market worldwide. Firms need to be as innovative with what they offer their staff as they do their clients and elevating the CBIZ brand is going to make the firm much more appealing to talent. ‘We are now going to be able to provide enhanced career paths and more opportunities to new and existing staff,’ said Spurio. ‘We are offering technology and offshore resources that other firms will find very hard to match and this is key, because a lot of people are leaving because of burnout.’
Spurio pointed out that both CBIZ and Marcum have an excellent staff retention rate, which he attributes to a good corporate culture of valuing their teams. Both companies plan to combine their training programmes and take the most effective strategies they have to help staff improve their skills. ‘Ultimately, a stronger brand means better opportunities for our staff,’ said Spurio.
‘They are now going to be able to branch out into more sectors and use a wider skill set that will give them much more career satisfaction.’
The Marcum acquisition is the most significant transaction in CBIZ’s history. At closing, the company will have a combined annual revenue of approximately USD 2.8 billion, more than 10,000 team members and over 135,000 clients.
If you want to speak to one of our experts in the North American market, please get in touch.
News
Asia Pacific Conference 2024
July 11, 2024
Kreston Global and Kreston VN successfully hosted the Asia Pacific Conference 2024 from July 4-6 in the vibrant city of Hanoi, Vietnam. The event united Kreston colleagues from across the Asia Pacific region and beyond to foster relationships and share insights into new ways of working and client collaboration.
Warm welcome in Asia Pacific
The conference kicked off on the evening of 4 July with a welcome dinner. Attendees gathered at the JW Marriott Hanoi, setting the stage for a warm and convivial atmosphere. This initial gathering allowed participants to reconnect and network in a relaxed setting.
Insightful business sessions and networking
The main business program commenced on 5 July, starting with welcome remarks and an overview of Kreston VN from Dung Nguyen Hoang, Managing Partner. The morning sessions included a “How to Do Business in Vietnam” presentation by Nhung Chu, Partner at Kreston VN, featuring case studies and an engaging Q&A session. This was followed by keynote speaker Lim Chor Ghee, INED (Chairman, Kucingko Berhad Cofounder, IMM Group/Be Better Foundation), who offered thought-provoking insights into the region’s business landscape and economic drivers of trade.
The conference continued with a strategic update from Liza Robbins, Chief Executive of Kreston Global. New firms, Kreston Thailand and Helmi Talib, were then introduced to the network. Following presentations on conflict checks and regional client management, the conference then broke for lunch. After the break the Asia Pacific regional committee, chaired by Kamal Thakkar, Kreston Stanley & Williamson, shared an overview of their plans, with speakers Ganesh Ramaswamy, Helen Rivero from Kreston Proworks and Vineet Rathi from Kreston OPR. The day concluded with a group discussion and feedback session, allowing attendees to voice their ideas and suggestions.
Specialised breakout sessions and cultural exploration
The final day, 6 July, featured focused breakout sessions for Audit (hosted by Kamal Thakkar, Kreston Stanley & Williamson) and Tax (hosted by Mark Taylor, Chair of the Global Tax Group) groups, providing a platform for specialised discussions and knowledge exchange. Closing remarks (from NAMES) summarised the key takeaways from the conference.
The conference concluded with a tour of Hanoi, allowing attendees to explore the city’s rich history and culture. This further strengthened the bonds formed over the past few days. A wonderful time was had by all with many follow ups and great connections having occurred.
Kreston Global members can access the conference photo album and presentations by clicking here, and see the upcoming events Kreston Global events by clicking here.
News
Ricardo Gameroff
Partner, Kreston BA Argentina, Argentina
Ricardo is a fraud, audit and risk expert with over two decades at Ernst & Young (EY), where he served as an Audit and Forensics Partner across Canada, Chile, and Argentina. He led major clients in utilities, retail, manufacturing, and mining sectors, including Coca-Cola, McDonald’s, Siemens, Fluor Daniels, and others. Ricardo is a Certified Public Accountant (CPA) in the United States, Chile, and Argentina, a Certified Fraud Examiner (CFE), and holds an MBA designation. He’s also a university professor at Universidad de los Andes and a published author on occupational fraud.
Internal audit in the age of cyber threats
June 10, 2024
Ricardo Gameroff, Managing Partner at Kreston BA Argentina and Global Audit Business Development Director at Kreston Global, emphasises the crucial role of internal audit in combating cyber threats. His article in the Audit & Risk magazine, the Chartered IIA’s publication, discusses how evolving internal audit practices enhance resilience against threats like ransomware, phishing, BEC attacks, and brand impersonation through meticulous risk assessment and proactive monitoring. Click here to access the complete publication, or read the summary below.
Internal audit as a defensive tool
Internal audits have always played a key role in mitigating cyber risks and protecting organizational assets. Moreover, recent advancements in auditing processes have expanded its capabilities beyond traditional methods. Now, internal audit teams can leverage innovative technologies to adapt quickly to evolving cyber threats.
Key recommendations for internal audit teams:
Continuous monitoring: Use automated tools and analytics to monitor network activity, detect anomalies, and identify potential security breaches in real time.
Enhance cyber security skills: Invest in ongoing training and professional development to keep up with emerging threats and best practices.
Integrate data analytics: Use data analytics to improve risk assessment and detect suspicious activities by analysing large data sets for patterns and anomalies.
Collaborate with IT and security teams: Work closely with IT and security departments to understand the organisation’s IT infrastructure and vulnerabilities, tailoring audit procedures to the risk profile.
Ethical artificial intelligence
A strong understanding of ethics and a robust corporate culture are crucial for protecting organizations against cyber threats. Additionally, internal audits can help management monitor and support organizational culture. Consequently, this ensures all employees understand expected behaviors regarding cybersecurity and ethics. This fosters good decision-making and strengthens governance and controls.
With the rise of AI in decision-making and automation, ensuring transparency, accountability, and bias-free systems is essential. Furthermore, internal auditors can aid in implementing ethical AI practices by auditing AI algorithms and ensuring regulatory compliance. Early involvement in AI initiatives allows auditors to advise on risks and suggest solutions.
Components cyber preparedness
Preparation is key in combating cyber threats. Establishing enterprise cyber preparedness involves governance, strategy, incident response, and employee training.
Governance and strategy: Internal audit should support and advise on effective cyber security management, helping to establish clear policies, procedures, and accountability structures. Defining roles, responsibilities, and strategic objectives aligned with business goals is crucial.
Risk assessment: Regular risk assessments help identify and prioritise cyber risks, allowing for efficient resource allocation and targeted mitigation strategies.
Incident response: Organisations need a formal incident response plan with designated teams and regular training exercises. Proactive measures like threat intelligence monitoring and incident detection systems are essential for swift and effective responses.
Employee training: Educating employees on cyber threats and best practices is vital, as human error remains a common cause of incidents. Regular training on phishing, password security, safe internet usage, and security awareness campaigns fosters a culture of vigilance.
Internal audit preventing incidents
It’s difficult to find examples of internal audits preventing cyber security incidents, as “near misses” aren’t publicised. However, successful cyber attacks often highlight how effective audit practices could mitigate or prevent breaches.
In the automotive industry, the 2023 Tesla data breach affected over 75,000 individuals due to an “inside job” by two former employees. This incident underscores the importance of comprehensive employee training, stringent access controls, regular audits, and whistleblower policies to detect unauthorised access and risky behaviour.
In the financial services sector, the March 2017 Equifax data breach, which affected nearly 150 million people, resulted from attackers exploiting IT system vulnerabilities. Additionally, while external attacks are complex to prevent, internal audit teams focusing on robust cyber security measures, data management practices, and internal controls can help detect breaches quickly and ensure swift damage mitigation and notification.
Mailchimp, a provider of email marketing services, has faced numerous data breaches due to social engineering attacks on its employees, resulting in compromised user accounts and customer data exposure. Internal audits should ensure employees receive adequate cyber security training and assess the implementation of two-factor authentication and practical identity management practices. Additionally, policies and systems must be in place to detect and mitigate vulnerabilities swiftly and promptly address breaches.
As technology evolves rapidly, so do the associated risks. Internal audit must adapt its practices and utilise technology advancements, such as AI, data analytics, and machine learning, to proactively identify potential vulnerabilities and predict emerging threats. Internal audit teams capable of foreseeing future risks can provide valuable guidance to management, positioning the organisation optimally to respond to inevitable cyber-attacks. For more information on implementing cyber security protocols into your business, click here.
Kayode Oni is an accomplished finance analyst with a proven track record of accounting and consulting. Experienced in finance, accounting, financial analysis, investment appraisal, tax laws and regulations, consulting, project management, and data analytics, Kayode is a valuable asset in the financial sector at Kreston Pedabo.
With over 12 years of experience spanning diverse sectors such as financial services, real estate & hospitality, consumer markets, and oil & gas, Tyna Adediran is a resourceful and self-motivated Business Analyst and Management Consultant. Specialising in areas like Strategy Design & Execution, Project Management, and SME Transformation, she is known for her strong skills in data collection, diagnostics, and critical thinking. Beyond her professional expertise, Tyna is a passionate advocate for continuous learning, sustainable business practices, and youth empowerment, reflecting her commitment to making a positive impact on both the business world and society at large.
Kreston Pedabo on the Africa Industrialisation Agenda
May 9, 2024
Nigeria’s role in Africa’s industrialisation
Nigeria is a critical force in Africa’s ambitious Agenda 2063, a sweeping blueprint for the continent’s sustainable socio-economic transformation. Nigeria has achieved significant milestones in the plan’s first ten years, Kayode Oni and Tyna Adediran from Kreston Pedabo, explore the integral contributions and the broader implications for international businesses considering African markets.
Africa’s Agenda 2063
Agenda 2063 is Africa‘s development blueprint for inclusive and sustainable socioeconomic growth and development. African Heads of State and Governments adopted the continental agenda during the golden jubilee celebrations of the Organisation of African Unity (OAU)/African Union (AU) in May 2013. Agenda 2063 seeks to deliver on seven development aspirations, each with its own goals to move Africa closer to achieving “The Africa We Want.”
The blueprint contains key activities to be carried out in five Ten-Year implementation plans, ensuring that Agenda 2063 delivers quantitative and qualitative transformational outcomes for Africa’s people over a 50-year timeframe.
10-year plan
The implementation of Agenda 2063 at continental, regional, and national levels has progressed steadily during the reporting period. This is attributed to remarkable progress and achievements made towards the realisation of several goals and targets of the First Ten-Year Implementation Plan of Agenda 2063. The data in the second continental progress report on the implementation of Agenda 2063 indicates that Nigeria has achieved a 40% score concerning the goals set for the seven development aspirations. This marks a significant increase of 208%, up from the 13% recorded in the first continental progress report on implementing Agenda 2063.
Key areas where Nigeria has contributed significantly to the implementation of Agenda 2063 include:
• Increased access to internet and electricity • Reduced under-five mortality rate • Increased access to anti-retroviral treatment • Increased women’s access to sexual and reproductive health services • Reduced prevalence of underweight among under-five children • Reduced the proportion of Official Development Assistance (ODA) in the national budget • Reduced unemployment rates • Increased real GDP per capita and annual GDP growth rates • Increased enrolment in pre-primary, primary and secondary schools • Increase in the proportion of the population with access to safe drinking water and safely managed sanitation services. • Increase in the share of manufacturing in GDP.
Key beneficial legislation for international businesses
No specific, unified legislation applies to all international businesses looking to expand into Africa. The legal landscape in Africa is diverse, and each country has its own set of laws, regulations, and policies governing international business activities.
However, some regional economic communities in Africa/Trade blocs, such as the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (AfCFTA), have taken steps to harmonise certain aspects of business laws among member states to facilitate trade and investment. International businesses aiming to expand into Africa typically need to navigate a range of legal considerations, including investment laws, taxation, employment laws, industry-specific regulations, trade agreements, intellectual property laws, and local content laws, among others.
Businesses must conduct thorough due diligence and seek legal advice tailored to the country or countries in which they plan to operate. Additionally, regulations and business environments can change, so it is advisable to consult legal experts with the most recent and relevant information.
A focus on Nigeria
In Nigeria, however, efforts have been made to attract foreign direct investment (FDI) through its investment promotion agency, the Nigerian Investment Promotion Commission (NIPC). The NIPC Act provides the legal framework for investments in Nigeria and incentivises investors in various sectors. The Federal Government of Nigeria has adopted rigorous efforts to ensure that areas of concern for foreign investors, such as bureaucratic red tapes, incorporation processes, taxation, capital repatriation, and visa policies, are relaxed to the fullest extent possible to open up Nigeria’s economy to fair competition and prosperity.
Consequently, in line with the NIPC Act 22, the Nigerian Investment Promotion Commission regularly consults with crucial Government agencies to negotiate specific incentive packages in identified strategic areas of investment interest. These consultations have led to an increasingly attractive business environment with tax holidays for pioneer companies producing exportable goods, newly established industries in manufacturing, or expansion of production in sectors vital to the economy. The Government also grants non-tax incentives to non-pioneer firms in addition to industry-specific incentives.
NIPC Act
Section 24 of the NIPC Act provides that a foreign investor in an enterprise to which the Act applies shall be guaranteed unconditional transferability of funds through an authorised dealer in a freely convertible currency of:
• dividends or profits (net of taxes) attributable to the investment; • Payments in respect of loan servicing where a foreign loan has been obtained; and • The remittances of proceeds (net of all taxes) and other obligations in the case of the sale or liquidation of the enterprise or any interest attributable to the investment.
Foreign Trade Zones
Foreign investors can set up businesses directly in Free Trade Zones (FTZs) without incorporating a company in the customs territory. Registered companies may also apply as a separate entity to operate in an FTZ that would append the company’s name with the FZE (Free Zone Enterprise) suffix to gain the FTZ benefits.
FTZ incentives include: • Exemption from all Federal, State, and Local Government Taxes, Rates, and Levies. • Duty-free importation of capital goods, machinery/components, spare parts, raw materials, and consumable items in the zones. • 100% foreign ownership of investments. • 100% repatriation of capital, profits, and dividends. • Waiver of all import and export licenses. • One-stop approvals for permits, operating licenses, and incorporation papers. • Permission to sell 100% of goods into the domestic market (in which case applicable customs duty on imported raw materials shall apply). • For prohibited items in the customs territory, free zone goods are allowed for sale provided such goods meet the requirement of up to 35% domestic value addition. • Rent-free land during the first 6 months of construction (for Government-owned zones).
To speak to one of our experts in Nigeria, please get in touch.
News
Helmi Talib elected to ISCA council
May 8, 2024
Our new member firm, Helmi Talib LLP, recently shared the news that the firm’s Managing Partner, Mr. Helmi Talib, has been elected as one of the council members of the Institute of Singapore Chartered Accountants (ISCA).
Institute of Singapore Chartered Accountants (ISCA) is the national accountancy body of Singapore that sets the professional standards and guidelines for accountants in the country. ISCA provides training, accreditation, and membership services for its members, including chartered accountants and fellow chartered accountants in Singapore.
Mr. Helmi Talib is thrilled to join the ISCA council and is eager to play a significant role in enhancing the institute’s profile and fostering positive change for accountants in Singapore and beyond.
Helmi Talib comments, ‘I would like to take this opportunity to extend my heartfelt thank you to all of you who believed in my vision to serve. To my team at Helmi Talib LLP along with my friends, network, and connections, I stand humbled and honored of your unwavering support that brought me to this role.’
Institute of Singapore Chartered Accountants (ISCA) comments, ‘We are heartened by the support from all our members, and special thanks to all our Council Members who are volunteering their valuable time.’
Najat Moughil is a seasoned audit and consulting specialist, known for her expertise in consolidating accounts, implementing IFRS standards, and optimising financial processes. With a strong focus on enhancing internal controls and risk management, she excels in streamlining operations and meeting closing deadlines efficiently. Moughil also offers valuable support in project management, business ownership, and change management initiatives.
Morocco: A bold economic agenda
May 1, 2024
In recent years, Morocco has undergone significant transformations, positioning itself as a formidable player on the global stage. This strategic repositioning has not only altered perceptions of the North African nation but has also greatly influenced the landscape for doing business within its borders. Najat Moughil, Partner at Exco ACDEN discusses Morocco’s emergence as a global player has ushered in a wave of opportunities.
Morocco’s economic landscape: Europe and Africa
Positioned at the crossroads of Europe and Africa, Morocco plays a pivotal role in linking the economies of both continents, fostering trade, investment, and collaboration in various sectors. Morocco is member of the African Union and the leading investor in West Africa. Major Moroccan institutions such as Attijariwafa Bank, Bank of Africa, and the OCP Group, a leading player in phosphate and fertiliser production, now exert significant influence in Africa.
Concerning Europe, Moroccan exports are primarily aimed at the Old Continent, comprising approximately two-thirds of the country’s total exports. Casablanca Finance City, an economic hub hosting over 200 international companies, is crucial in Morocco’s role as a bridge between Europe and Africa. Thanks to its geographical location and political stability, strong and modern infrastructures, the implementation of ambitious sectoral strategies, highspeed industrialisation, the development of green energies and the signing of several free trade agreements with the world’s major economic players, Morocco offers a favorable environment for investing in various sectors: aeronautics, automotive, textiles, leather, agri-food and aggrotech, electronics, tourism, information technology, infrastructure and even energy.
Strategies for industrial growth
In order to strength its position as logistic hub, Morocco made important investments in logistics projects, in ports and railways. In the automotive and aeronautical sectors, Morocco’s logistical role has already grown and investments in production facilities and logistical solutions have been made. Morocco’s automotive industry, aircraft parts manufacturing and mining are traditional industries that offer important export opportunities.
Morocco is also moving forward with various policies to unleash the potential of the private sector, including reform of the vast network of public enterprises and a revision of the investment charter.
Economic impacts and infrastructural upgrades
The hosting of the 2030 World Cup will provide Morocco with a unique opportunity to extend its influence beyond the continents of Africa and Europe, as the tournament could inject up to US$ 1.2 billion into the Moroccan economy. In preparation, the country plans extensive upgrades to stadiums and infrastructure, aiming to attract investments through incentives. Tourism is also expected to boom. Banks will benefit from increased infrastructure financing, while the telecoms sector will see higher traffic and investments in 5G technology. Despite the costs, the World Cup offers Morocco a lucrative return on investment and a lasting national legacy. Such a robust economic agenda requires the implementation of complementary social reforms to ensure its benefits are equitably distributed and accessible.
Morocco’s strategic social policies
Amidst efforts to fortify businesses, a parallel consideration arises for initiatives aimed at enhancing the welfare and security of Moroccan households. The efforts have so far focused on the social sectors, with a landmark initiative to expand access to national health insurance and family allowance systems.
In recent months, the Moroccan government has officially launched the registration process for the Direct Social Support program. This program is devised to offer direct aid to families, particularly those in need, including school-age children, children with disabilities, newborns, economically vulnerable families, and those supporting elderly individuals. The program’s aim to improve socioeconomic conditions will foster economic stability, benefitting businesses operating in the country.
The Moroccan authorities remain committed to an ambitious program of structural reforms designed to put Morocco on a more solid and equitable growth path.
Morocco’s sustainable journey: Leading in renewables and environmental initiatives
The government’s commitment to social welfare is paralleled by its ambitious environmental agenda. Just as the Direct Social Support program aims to uplift Moroccan households, the “Morocco Offer” seeks to elevate the country’s standing in the renewable energy sector, thereby securing a sustainable future for all its citizens. On 11 March 2024, the Moroccan government made an official announcement unveiling the “Morocco Offer,” aimed at nurturing the growth of the green hydrogen sector. Prime Minister released a circular outlining a framework of incentives and assistance for potential project developers. This proposition targets investors keen on manufacturing green hydrogen and its byproducts and has attracted approximately a hundred domestic and international investors.
Renewable energy sector advancements
Morocco possesses significant potential for advancing its renewable energy sector, thanks to its abundance of wind and solar energy resources. With the world’s largest photovoltaic plant already in operation, the North African nation is committed to swiftly reducing its carbon footprint. Furthermore, prominent Moroccan companies such as OCP Group, demonstrate remarkable commitment to integrating renewable sources of water and energy into their production processes.
Morocco’s sustainable goals
The alternative energies, energy efficiency and the circular economy are becoming the most attractive sectors in Morocco. In 2030, the country aims to reduce its energy consumption by 15% and to reach 52% of renewables in its power capacity.
Morocco’s strategic repositioning as a global player has significantly transformed its business landscape, attracting an influx of international investors. With many projects in progress, such as the gas pipeline between Nigeria and Morocco, the country is poised to become an even more significant player on the global stage.
If you would like to speak to one of our experts in Morocco, please get in touch.
News
New Netherlands firm joins the Kreston Global network
De Beer is an audit and accounting firm that was established in 1952. De Beer has nine partners and 106 staff in total. It operates from two offices in the south of the Netherlands and offers audit, international and domestic tax and accounting services to a range of SME and private clients. Industry specialisms include trading, real estate and logistics.
The addition of De Beer to Kreston Global’s network further extends its European region, which consists of 62 member firms across 33 countries providing a range of financial, audit and accounting, taxation and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
Liza Robbins, Chief Executive of Kreston Global, said:
“The addition of De Beer to our large number of both Dutch and European firms is a great move. Our nine Netherlands member firms together represent over e100m in revenue and collaborate closely on clients and operational matters to share knowledge and expertise widely. It will be wonderful to see Wil and the team at our next European conference and to hear more about their plans.”
“We are really excited to have become a member of the Kreston Global network. The network has an extensive international footprint which will benefit our clients as well as our people. We have also found the Kreston Netherlands member firms extremely welcoming and we are very much looking forward to working with them closely for example on the Dutch Zero Co2-projectto support clients with ESG issues, and to meeting the rest of the network in due course.”
News
Luxembourg firm joins Kreston Global network
April 18, 2024
Kreston Global has today welcomed Luxembourg firm Global Osiris Audit & Expertise to the Kreston Global network.
The firm offers Audit and Assurance, Corporate Recovery and Insolvency services to national and international privately-owned entrepreneurial businesses across Luxembourg and across Europe. The firm deals with a variety of industries including technology, financial services, real estate, food manufacturing, hotels and consultancy organisations.
The addition of Global Osiris Audit & Expertise to Kreston Global’s network ensures a strengthening of accounting provision across its substantial European region, which consists of 61 member firms across 33 countries providing a range of financial, audit and accounting, taxation, and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
The firm will be rebranding to become Kreston Osiris Luxembourg over the next few months.
Liza Robbins, Chief Executive of Kreston Global, said:
“We are really pleased to welcome Global Osiris Audit & Expertise to our European region and our network as it brings a range of complimentary solutions for our Luxembourg service offering as well as considerable experience of operating within international networks. The firm will be a strong addition to our member firm lineup especially as it is located in such a key financial centre.”
Olivier Janssen, Managing Partner at Global Osiris said:
“We chose Kreston Global because of its member firm ethos and its great reputation for servicing entrepreneurial international businesses around the world. We can see enormous potential in our collaboration with Kreston and the network’s excellent member firms worldwide.”
News
Kreston Global announces new Singapore firm
April 15, 2024
Kreston Global has today welcomed Singapore firm, Helmi Talib LLP, to the Kreston Global network.
Established in 1992, Helmi Talib offers eight key service areas: Audit and Assurance, Tax Compliance and Advisory, Business Process Outsourcing, Liquidation and Receivership, Internal Audit, Payroll, Transaction, and Corporate Secretarial Services. For more than three decades, Helmi Talib has provided services to a wide range of clientele, the majority of which are subsidiaries of multinational organizations, and privately owned entrepreneurial businesses, under diverse sectors ranging from investment holdings, financial institutions, charities, and information technology to name a few.
The Firm was named by Singapore Business Review as one of Singapore’s top 30 accounting firms. Continuing to grow, the Firm today is led by five audit partners and five non-assurance directors supported by close to 80 staff.
Over the next few months, Helmi Talib Group will rebrand as Kreston Helmi Talib.
The addition of Kreston Helmi Talib to Kreston Global’s network further strengthens its Asia Pacific region, which consists of 45 member firms across 22 countries providing a range of financial, audit and accounting, taxation, and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
Liza Robbins, Chief Executive of Kreston Global, said:
“I’m delighted to welcome Kreston Helmi Talib to our network. Singapore serves as a major hub for our member firms in and beyond Asia, offering a dynamic business landscape which attracts our core market of companies with entrepreneurial organisations with a growth mindset. Kreston Helmi Talib’s extensive experience and client range make them both a natural fit for and a great asset to our network
Helmi Talib, Managing Partner at Kreston Helmi Talib said:
“The Kreston network has a great reputation for servicing entrepreneurial international businesses around the world, so joining the network is an exciting milestone in our professional journey. Given our extensive international client portfolio, Singapore being one of the world’s major hubs for inbound investment, we can see enormous potential in our collaboration with Kreston and the network’s excellent member firms across the globe.”
News
Kreston Global network welcomes new Argentinian firm
Kreston BA Argentina has been established to serve local private, public, and listed enterprises as well as international companies looking to invest in Argentina, at every stage of their business lifecycle.
Kreston BA Argentina is run by Ricardo Gameroff and Esteban Babino, who have nearly six decades of local and international experience from big four accounting firms between them as well as holding CPA, CFE and MBA certifications in Argentina and the United States. They are fluent in English and possess a deep understanding of both local and global business cultures. The new firm has a total of 10 employees based in Buenos Aires and provides a wide array of customised services covering all aspects of accounting and professional needs, from tax and legal planning to business process outsourcing solutions, financial audits, corporate fraud, internal audit and risk and legal advisory. The firm’s client base includes blue-chip clientele spanning energy, mining, manufacturing, oil & gas, utilities and agribusiness.
The addition of Kreston BA Argentina to Kreston Global’s network further strengthens its Latin America region, which consists of 25 member firms across 17 countries providing a range of financial, audit and accounting, taxation and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
Liza Robbins, Chief Executive of Kreston Global, said:
“I’m delighted to welcome Kreston BA Argentina to our network. Our Latin America region is full of energetic and collaborative firms who regularly work together on client and employee initiatives. Argentina is a really important location in the region as the country embarks on a new economic strategy. With Ricardo and Esteban’s backgrounds and their vision, I have no doubt that Kreston BA Argentina will be a great addition to our network”
“We are extremely energised to be joining the Kreston network and benefitting from its highly connected infrastructure full of firms who enjoy working together. It has a great name for servicing entrepreneurial international businesses around the world and we see the synergies it will bring for our clients and our new venture. ”
News
Pretino Albury
Partner at Kreston Bahamas
Pretino Albury, Partner at Kreston Bahamas, brings over a decade of expertise, serving clients in The Bahamas, Caribbean, and the USA. As a CPA, he specialises in management consulting, risk advisory, public accounting, and auditing across diverse industries.
Understanding BEPS implications with crypto-clients
Dealing with decentralised cryptocurrencies in the absence of global tax standards is challenging. With the worldwide rollout of the OECD’s BEPS framework, advisers and clients must collaborate to formulate an effective strategy. Robust policies aligning with international standards are essential to ensure compliance and minimise risks in cryptocurrency transactions. Below are critical considerations for crafting such policies.
Implementing robust policies
Understand BEPS implications for cryptocurrency transactions by familiarising yourself with OECD guidelines, particularly Actions 10, 13, 5, and 15. Consult with clients to gather information on their cryptocurrency business activities, transactions, and risk appetite. Conduct thorough risk assessments, addressing transfer pricing and cross-border transactions. Implement a transparent transfer pricing model and design policies to handle hybrid mismatches in cross-border cryptocurrency transactions. Establish a BEPS-compliant KYC process for crypto transactions, including identity verification, beneficial owner identification, risk assessments, and ongoing customer activity monitoring. Mandate proper disclosure, robust record-keeping, and precise procedures for identifying, reporting, and paying taxes on cryptocurrency-related income.
Risk mitigation strategies
Integrate risk mitigation into policies by developing strategies to identify and counter suspicious activity, protecting against fraud, theft, and regulatory sanctions. Include clear procedures for reporting suspicious activity, robust anti-money laundering programs, and legal expertise to prevent asset seizure. Implement cybersecurity measures to safeguard against cyberattacks and unauthorised access.
Educate client personnel comprehensively on the newly implemented cryptocurrency policies to ensure an understanding of requirements and risks. Provide training on the rationale behind each approach and their role in implementation and adherence.
Continuous compliance monitoring
Continuously check and review compliance by establishing a system to monitor adherence to the BEPS-compliant cryptocurrency policy. Stay updated on evolving regulations and tax laws, regularly reviewing and updating client policies to ensure ongoing compliance with changing rules and standards.
Tech-tools for efficient monitoring
Utilise tech tools for efficiently monitoring cryptocurrency transactions, employing advanced technologies and analytics to trace transaction history and identify potential risks like money laundering and tax evasion. These tools can detect anomalies, assign risk scores, and enable real-time monitoring for immediate identification and recording of suspicious activity. Additionally, technology aids in staying updated on evolving rules and regulations across jurisdictions, ensuring accurate and timely tax calculations, payments, and reporting through AI, blockchain, and cloud systems.
Collaboration with tax authorities
Maintain open communication and collaboration with tax authorities to align cryptocurrency policies with expectations, preventing unforeseen issues and demonstrating commitment to compliance.
Building BEPS-compliant cryptocurrency policies is an ongoing process, requiring continuous collaboration and adaptation to the evolving cryptocurrency landscape. Advisers must partner effectively with clients for the long term, implementing and maintaining robust policies. By following these steps, advisers can navigate the complexities of cryptocurrency taxation, minimize BEPS risk, and strengthen client relationships in a landscape with an estimated 420 million crypto users worldwide.
Shareholder, Mayer Hoffman McCann P.C, Deputy Technical Director, Global Audit Group, Kreston Global
Herbert M. Chain is a highly experienced auditor and is a financial expert with over 45 years of experience in business, accounting, and audit, having served as a Senior Audit Partner at Deloitte. He holds certifications from the National Association of Corporate Directors and the Private Directors Association, with knowledge of private company governance and effective risk management. He has extensive knowledge in the financial services sector, including asset management and insurance. Herb is a member of MHM’s Attest Methodology Group and serves as Deputy Technical Direct of Kreston Global’s Global Audit Group.
Auditing standards: Unpacking SAS 143 and SAS 145 updates
March 12, 2024
In his comprehensive overview, Herbert M. Chain from MHM explores the recent updates to SAS 143 and SAS 145, which signify significant milestones in auditing standards. Read the full article here, or the summary below.
Overview of SAS 143 and SAS 145
The issuance of SAS No. 143, focusing on Auditing Accounting Estimates and Related Disclosures, and SAS No. 145, centered on Understanding the Entity and Its Environment and Assessing Risks of Material Misstatement, represents a significant advancement in auditing standards. These standards offer auditors extensive guidance for testing accounting estimates, particularly those involving fair value, and outline essential requirements for grasping the entity’s internal control system. This is crucial in navigating the complexities of the contemporary economic, technological, and regulatory accounting environment.
SAS 143: Auditing accounting estimates
Effective for audits of periods ending on or after Dec. 15, 2023, SAS 143 mandates a deeper examination of uncertainties in accounting estimates, focusing on potential management bias. This involves a thorough evaluation of assumptions, especially for significant judgments like fair value measurements. The standard necessitates a detailed risk assessment tailored for complexities in auditing accounting estimates, providing guidance on responsive audit procedures, including assessing the suitability of valuation models and data integrity for fair value estimates. SAS 143 aims to enhance transparency and accountability in fair value estimation, ultimately improving the quality and reliability of these estimates for increased stakeholder trust.
Key changes from SAS 143
Key changes to auditing standards in SAS 143 include a heightened emphasis on auditors addressing estimation uncertainty and exercising professional skepticism in evaluating fair value estimates. The standard mandates a more detailed risk assessment process tailored for complexities in auditing accounting estimates, particularly fair value estimates. Additionally, auditors must assess the reasonableness of accounting estimates within the financial reporting framework, ensuring compliance with permitted methods, assumptions, and data.
SAS 143impacts
SAS 143 brings substantial changes to the audit process in assessing fair value estimates. The focus now shifts to understanding factors and assumptions behind estimates, demanding greater transparency and accountability from management. Auditors, in response, perform the following procedures:
Method Assessment: Evaluate if the method aligns with the financial reporting framework and remains consistent. Changes prompt scrutiny for potential bias.
Significant Assumptions: Ensure suitability of assumptions within the financial reporting framework, considering both positive and negative outcomes. Evaluate consistency with prior periods and other business activities, considering potential bias.
Data Evaluation: Assess data reliability, understanding sources and consistency with prior periods. Verify relevance in the context of the chosen method and assumptions, addressing potential bias.
Management’s Point Estimate: Scrutinise alternative outcomes and assumptions when management opts for a precise value (point estimate), evaluating potential bias.
Enhancing controls with SAS 145
SAS 145, also effective for audits for periods ending on or after Dec. 15, 2023, revises aspects of the risk assessment process, focusing on an entity’s internal control system. Notably, it enhances auditor responsibilities related to evaluating the design and implementation of controls, including IT general controls (ITGC). The standard recognises the increasing significance of an entity’s IT environment, requiring auditors to identify and assess ITGCs, categorised into four domains:
Security and Access: Controls ensuring appropriate user access, segregation of duties, and ongoing authorisation for IT applications and cloud providers.
Systems Change: Controls over designing, testing, and migrating changes into a production environment, with segregation of access to prevent unauthorised changes.
System Development: Controls over initial IT application acquisition, development, or implementation, including data conversion and creation of new reports.
Computer Operations: Controls monitoring financial reporting program execution, ensuring backups, and enabling timely data recovery in case of outages or cyberattacks.
While not all domains may be applicable annually, SAS 145 mandates evaluating design and implementation for relevant ITGCs within the applicable domain for each identified significant IT application. The standard also introduced the concept of a continuum of inherent risk as well as other changes.
If you are interested in doing business with Kreston Global, contact us here.
News
Ganesh Ramaswamy
Partner at Kreston Rangamani and Associates LLP, Global Tax Group Regional Director, Asia Pacific
Ganesh has extensive experience of more than 30 years in providing specialist tax services, particularly to large privately owned groups, with particular strengths in the property, retail, healthcare and hospitality industries. He has supported various entities with specialist advice on tax-effective structures and restructures, cross-border transactions on account of outbound and inbound India investments, mergers, acquisitions and divestments. Ganesh has also worked with stakeholders across businesses to deliver solutions such as tax due diligence, tax consolidation and restructuring of large family businesses in the Middle East, Asia, and Singapore.
Biodiversity standard of GRI gets an update
March 11, 2024
The Global Reporting Initiative (GRI) has published a biodiversity standard update which will help Corporates to provide information and analysis on the biodiversity impacts.
Overview of GRI’s biodiversity standard update
The standard GRI 101 – “Biodiversity 2024” has been updated to support Corporates around the world to disclose their significant impacts on biodiversity which comes out of their business operations and supply chain management.
GRI has agreed to support the use of the above standard over the next two years, with Corporates expected to mandatorily follow it from 2026. This revised standard builds on key global developments in the biodiversity field such as UNFCCC Kunming Montreal Global Biodiversity Framework, The Science Based Target Network (SBTN) and The Taskforce on Nature Related Financial Disclosures.
Key features and requirements of GRI 101
The updated GRI standard sets new rules for reporting through transparency on biodiversity impacts. The standard suggests location specific reporting, both within the organisations’ operations and its supply chain functions. This is aimed at enabling the stakeholders to correctly assess the organisation’s impact on biodiversity.
In detail, the biodiversity standard focuses on achieving the following objectives:
Covering the areas where significant impacts on biodiversity gets poorly reported especially in supply chain management.
Location specific reporting on impacts including all places where impacts are felt with detailed information of the place and site where the impact has been felt.
Disclosure norms on biodiversity loss covering the areas of land misuse, climate change, pollution and over exploitation.
Reporting the impacts on society including those on communities and indigenous people.
Corporate responsibilities in addressing biodiversity loss
The Intergovernmental Science Policy Platform on Biodiversity and Ecosystem Services has come out with an assessment report which sends a warning that 50% of the global economy is under threat due to biodiversity loss. The GRI update on Biodiversity standards has come up against this background.
Corporates need to take immediate steps to reverse the biodiversity loss, restore nature to its glory, respect the rights, roles and contributions to sustain biodiversity along the supply chain. When these actions of the Corporates are validated and communicated in the form of a report brought out by GRI, all the stakeholders in the system will definitely end up benefitting from this transparency.
For more information on Kreston Global’s sustainability hub, click here.
News
Frank Sánchez Ruiz, CPA, CMA, CIA, CGFM, CGMA,
Managing Partner at Kreston PR
Investing in Puerto Rico: Low tax jurisdiction for investors
March 7, 2024
Investing in Puerto Rico has proven lucrative, experiencing an 11% growth in its economy since 2019, despite the challenges felt globally from COVID-19, a global recession and increasing supply chain challenges. So far in 2024, the International Monetary Fund records the island as having the highest GDP per capita in the Caribbean.
Puerto Rico (PR) can claim several advantages that can be attributed to this growth. It is a strategic Caribbean geographic location, offering political stability, modern infrastructure, and a highly skilled bilingual workforce (Official languages are Spanish and English). It is the main air and sea access hub in the Caribbean, with multiple flight options to and from the major cities of the United States, Latin America, and Europe.
Unincorporated United States territory
Secondly, Puerto Rico enjoys the United States constitutional, legal, financial, and regulatory protection, including among others, intellectual property, Homeland Security matters, and banking system. The U.S. dollar is also the official currency, and no passport is required for U.S. citizens.
Recent tax incentives
Thirdly, Puerto Rico enjoys fiscal autonomy and has a number of tax incentives to attract investment. Puerto Rico recently published legislation designed to boost remote PR workers. The governor, Pedro Pierluisi, signed the new act into law on January 17, 2024. This legislation builds on Act 52-2022, targeting the enhancement of the foreign private sector’s remote work force in PR.
Tax incentives for local and foreign companies and individuals
During 2019 PR enacted legislation to compile all previous PR tax exemption laws into Act 60, that has attracted foreign and local businesses, and non-resident high net worth individuals who relocate to PR, contributing to the overall economic health of the island. The benefits cover a number of industries attractive to investors, most notably:
Export of Goods and/ or Services–Act 60- 2019 (Formerly Act 20)–Available to businesses established in Puerto Rico that offer services or sell goods to customers or clients outside Puerto Rico.
Manufacturing, Research and Development – Act 60-2019 (Formerly Act 73) – Available for manufacturing, R&D and high-tech industries that invest in the island. Manufacturing, Research and Development – Act 60-2019 (Formerly Act 73) – Available for manufacturing, R&D and high-tech industries that invest in the island.
Creative Industries – Act 60-2019 (Formerly Act 27) – Available for entities engaged in film production, postproduction, and similar creative projects.
Green Energy – Act 60-2019 (Formerly Act 83-325) – Incentive is available for entities engaged in the production/sale of green energy, sale of equipment, assembly, or installation of green energy equipment.
Visiting Economy (Tourism – Formerly Act 74) – Available for businesses engaged in tourism activities.
Income Tax rate
Among its benefits, Act 60 grants a reduced income tax rate from 37.5% to 4% on eligible activities as well as 100% exemption on distributions from earnings and profits on those activities, designed to stimulate growth in key industries and attract investors to the country. The tax decree also provides exemptions on indirect taxes (municipal license, property taxes, excise tax, among others) that ranges from 50% to 100% of exemption, making investment even more appealing to local and foreign businesses.
Individual resident investor and other tax incentives
Non-resident high net worth individuals who relocate to Puerto Rico also benefit from additional tax grant benefits under Act 60. Also, there are other tax incentives for those engaged in providing highly skilled medical professional services (physicians), professional researchers or scientists, small and medium enterprises (PYMES), young entrepreneurs, public porters of air transportation, maritime transport services, infrastructure investment and agriculture.
Low tax jurisdiction
This legislative update is a key component of Puerto Rico’s strategy to stimulate economic growth, attract global talent, and encourage the development of a diverse and resilient economy, emphasising the significance of investing in Puerto Rico.
If you would like to speak to someone about doing business in Puerto Rico, please get in touch.
News
Pretino Albury
Partner at Kreston Bahamas
Pretino Albury, Partner at Kreston Bahamas, brings over a decade of expertise, serving clients in The Bahamas, Caribbean, and the USA. As a CPA, he specialises in management consulting, risk advisory, public accounting, and auditing across diverse industries.
Understanding BEPS implications with crypto-clients
Dealing with decentralised cryptocurrencies in the absence of global tax standards is challenging. With the worldwide rollout of the OECD’s BEPS framework, advisers and clients must collaborate to formulate an effective strategy. Robust policies aligning with international standards are essential to ensure compliance and minimise risks in cryptocurrency transactions. Below are critical considerations for crafting such policies.
Implementing robust policies
Understand BEPS implications for cryptocurrency transactions by familiarising yourself with OECD guidelines, particularly Actions 10, 13, 5, and 15. Consult with clients to gather information on their cryptocurrency business activities, transactions, and risk appetite. Conduct thorough risk assessments, addressing transfer pricing and cross-border transactions. Implement a transparent transfer pricing model and design policies to handle hybrid mismatches in cross-border cryptocurrency transactions. Establish a BEPS-compliant KYC process for crypto transactions, including identity verification, beneficial owner identification, risk assessments, and ongoing customer activity monitoring. Mandate proper disclosure, robust record-keeping, and precise procedures for identifying, reporting, and paying taxes on cryptocurrency-related income.
Risk mitigation strategies
Integrate risk mitigation into policies by developing strategies to identify and counter suspicious activity, protecting against fraud, theft, and regulatory sanctions. Include clear procedures for reporting suspicious activity, robust anti-money laundering programs, and legal expertise to prevent asset seizure. Implement cybersecurity measures to safeguard against cyberattacks and unauthorised access.
Educate client personnel comprehensively on the newly implemented cryptocurrency policies to ensure an understanding of requirements and risks. Provide training on the rationale behind each approach and their role in implementation and adherence.
Continuous compliance monitoring
Continuously check and review compliance by establishing a system to monitor adherence to the BEPS-compliant cryptocurrency policy. Stay updated on evolving regulations and tax laws, regularly reviewing and updating client policies to ensure ongoing compliance with changing rules and standards.
Tech-tools for efficient monitoring
Utilise tech tools for efficiently monitoring cryptocurrency transactions, employing advanced technologies and analytics to trace transaction history and identify potential risks like money laundering and tax evasion. These tools can detect anomalies, assign risk scores, and enable real-time monitoring for immediate identification and recording of suspicious activity. Additionally, technology aids in staying updated on evolving rules and regulations across jurisdictions, ensuring accurate and timely tax calculations, payments, and reporting through AI, blockchain, and cloud systems.
Collaboration with tax authorities
Maintain open communication and collaboration with tax authorities to align cryptocurrency policies with expectations, preventing unforeseen issues and demonstrating commitment to compliance.
Building BEPS-compliant cryptocurrency policies is an ongoing process, requiring continuous collaboration and adaptation to the evolving cryptocurrency landscape. Advisers must partner effectively with clients for the long term, implementing and maintaining robust policies. By following these steps, advisers can navigate the complexities of cryptocurrency taxation, minimize BEPS risk, and strengthen client relationships in a landscape with an estimated 420 million crypto users worldwide.
The practitioner’s guide to the OECD Multilateral Convention
January 18, 2024
Multinational firms leverage intangible assets in the rapidly changing digital landscape, posing challenges to outdated tax regulations. The OECD addresses this with a two-pillar solution, highlighting the crucial role of the Multilateral Convention in swiftly implementing the subject tax rule (STTR) to reshape global taxation for fairness and efficiency.
Challenges in international taxation amid digital transformation
In the digital transformation era, multinational enterprises (MNEs) exploit intangible assets like intellectual property and data to reap substantial profits across borders without a physical presence. Outdated international tax rules struggle to cope with this virtual reality, enabling MNEs to circumvent taxes through “nexus” and “profit allocation” tactics.
The OECD’s Two Pillar solution
The Organisation for Economic Cooperation and Development’s (OECD) Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has devised a Two Pillar Solution to address this. This initiative aims to establish global consistency and transparency, ensuring MNEs pay a minimum level of tax on their global profits, regardless of where they are generated.
The first pillar involves the establishment of a global minimum tax, requiring legislative changes in jurisdictions with tax rates below the minimum. The second pillar, Subject to Tax Rule (STTR), closes loopholes in intragroup payments, preventing profit shifting to low-tax jurisdictions.
Catalyst for fair taxation and global consistency
In October 2023, the OECD introduced the Multilateral Convention, a crucial STTR implementation tool. This convention allows source jurisdictions to “tax back” certain intra-group payments, promoting fair taxation and protecting the tax base of developing countries.
The STTR’s swift implementation is facilitated by the Multilateral Convention, offering a streamlined process through simultaneous tax law modifications across multiple nations. This unified approach becomes effective from 1 January, 2025, benefiting companies with a fiscal year aligning with the calendar year.
While the speedy implementation of the STTR is a positive step, it has progressed ahead of other Pillar Two rules. The benefits of the Multilateral Convention include:
ensuring quick STTR implementation
levelling the playing field for developing countries
providing a fair framework for reclaiming taxing rights
In summary, the Multilateral Convention plays a crucial role in accelerating the implementation of STTR regulations, ensuring a fair and efficient global tax landscape for multinational enterprises.
Rob McGillen is the Chief Innovation Officer at CBIZ Financial Services with 25+ years’ working with innovative companies. Focus includes Professional Services, Financial Services, Manufacturing, Health and Life Sciences, Technology / SaaS, Insurance, and Energy.
Artificial intelligence in the accounting industry
The accounting sector is swiftly embracing Artificial Intelligence (AI), with the Big 4 (Deloitte, PwC, Ernst & Young, and KPMG) leading the charge. The Institute of Analytics (IoA) recognises accountants as strategically positioned to address the AI skills gap.
While the Big 4 invest in and experiment with AI tools, the broader UK business landscape needs to be adopted faster. According to a 2022 report on AI activity in UK businesses, only 15% currently use AI to some extent, with 2% piloting AI technologies and an additional 10% planning future adoption.
Despite this, the potential benefits of AI in accounting, including predictive analysis, AI-enabled document reviews, natural language processing, AI-assisted forecasting, and audit automation, are significant. Dr. Clare Walsh, Director of Education at IoA, emphasises the value of AI technologies in providing more significant insights amid the shift towards automation and the demand for accurate, real-time data.
In exploring how smaller practices leverage AI, we delve into the AI technologies accountants are testing and the tangible benefits emerging for professional practices.
Document and template generation
Rob McGillen noted that the shift from exploratory to demonstrable prompts involves upskilling professionals through prompt engineering training and demonstrations, fostering adoption within accountancy practices. Rob addresses AI challenges with practical, prompt building, custom instructions, and private data sets. Emphasising the need for the right tool for specific tasks, he acknowledges the evolving nature of the field, requiring continuous focus and updates.
Generative AI enhances efficiency by minimising time spent on lower-impact tasks, enabling professionals to focus on insightful analysis and application of expertise. Overall, the verdict is positive, highlighting AI’s role in improving document and template generation for increased work process efficiency.
If you are interested in implementing artificial intelligence in your business, please contact us.
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