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1
News and
Information GGI European
for Members
and Friends
Regional
of GGI Conference
Issue No. 93 | January 2018 in Berlin
© 2018 - GGI Global Alliance
GGI INSIDER | No. 93 | January 2018
2 CONTACT | EDITORIAL | CONTENTS
Editorial
Dear GGI Members,
Dear Friends,
The New Year has only just begun, taxation treaties. Howard Bakrins (IL,
but we already have much to report. USA) reports on US taxation reforms.
The planning for GGI’s 2018 events is Alexane Palide (France) informs the
in full swing – the GGI Middle East & readership about the modified French
African Regional Conference will gath- Wealth Tax on Real Estate, while Mario
er participants, mainly from within the Kapp and Raffaela Lödl (Austria) have
region, in the old imperial city of Mar- written about the ‘EU Proposal for a
rakech. Barely a week later, GGI tax ex- New Preventive Restructuring Frame-
perts will meet for the GGI ITPG Glob- work’.
al Tax Summit. This is a special one, GGI’s Practice Groups have already
Contact with the extraordinary meetings of the been very active in the New Year and
GGI Practice Groups Global Mobility they share the latest news from their
GGI Geneva Group International AG Solutions and Indirect Taxes also tak- respective fields here: six Practice
Schaffhauserstrasse 550 ing place in the same hotel on the first Groups will publish Spring Newslet-
8052 Zurich day – directly prior to the start of the ters right in time for the European Re-
Switzerland Global Tax Summit. In addition to the gional Conference in Berlin. GGI mem-
T: +41 44 256 18 18 Practice Group meetings, the Geneva bers who would like to contribute an
E: info@ggi.com Capital Group (GCG Capital) will be expert article can still do so.
W: www.ggi.com holding their M&A Dealmakers Meet- Dr Attila Kovacs (Hungary) has be-
W: www.ggiforum.com ing concurrently. This presents excel- gun an initiative to establish a pool of
lent networking opportunities for all GGI insolvency experts, who will be
participants in Marbella. able to rapidly assemble international
In April, the European Regional teams to deal with cross-border insol-
Conference will be held in the German vency proceedings. This will allow GGI
Disclaimer capital city of Berlin. This is another experts to efficiently respond to the
promising event which you should al- new requirements of the EU regula-
The information provided in ready note in your calendar, if you have tion - and create additional business
this INSIDER came from reli- not yet done so. opportunities.
able sources and was prepared GGI is constantly expanding and we Meanwhile, Steve McCrindle (UK)
from data assumed to be correct; are once more pleased to present and and Toon Hasselman (The Nether-
however, prior to making it basis welcome several new members in this lands) give an outlook on the up-
of a decision, it must be double issue. coming Indirect Taxes Practice Group
checked. Ratings and assess- We are also pleased to see GGI meeting in Marbella and Graeme Sag-
ments reflect the personal opinion member firms sharing their latest suc- gers (South Africa) reports for the In-
of the respective author only. We cess stories and news, including: ternational Taxation Practice Group on
neither accept liability for, nor are The second part of the two-part- how South Africa deals with offshore
we able to guarantee, the content. series themed: ‘The Game Plan: Liti- trusts. Last but not least, Sergio Guer-
This publication is for GGI internal gation and Crisis Communications in rero Rosas (Mexico) shares some con-
use only and intended solely and the Digital Age’, written by Richard siderations for a successful Business
exclusively for GGI members. Levick, CEO of global advisory firm Estate Planning.
LEVICK. The first part was published We hope you enjoy reading this is-
If you wish to be removed from in November’s GGI INSIDER, Issue sue and may we also take this oppor-
the mailing list, send an email to No 92. Bernhard Schwechel (Ger- tunity to wish you a healthy, happy and
info@ggi.com. Alternatively, let many) has contributed an article on prosperous 2018, with many stimulat-
us know what you think about the signed Multilateral Instrument, ing GGI connections and enjoyable
INSIDER. We welcome your feed- a product of the OECD's and BEPS events.
back. project which is designed to adjust a
multitude of existing bilateral double Your GGI Team
Contents
3
Contents Diary
EDITORIAL, CONTACT, DISCLAIMER�������������������������������������������������������������� 02
CONTENTS / DIARY������������������������������������������������������������������������������������������ 03 ➜ 02-04 February 2018
UPCOMING GGI EVENTS GGI PG Chairpersons Meeting
➜ GGI Middle East & African Regional Conference, Zurich, Switzerland
Marrakech, Morocco | 16-18 February 2018�������������������������������������������������� 04 ➜ 16-18 February 2018
➜ GGI ITPG Global Tax Summit, Marbella, Spain | 22-25 February 2018�������� 05 GGI Middle East & African
➜ GGI European Regional Conference, Berlin, Germany | 19-22 April 2018���06 Regional Conference
Marrakech, Morocco
GGI NEW MEMBER FIRMS������������������������������������������������������������������������������� 08 ➜ 22 February 2018
GGI Global Mobility Solutions
GGI INTERNAL NEWS PG Meeting
➜ Ashwani & Associates featured as one of the Marbella, Spain
10 most promising taxation service providers in India��������������������������������� 11 ➜ 22 February 2018
➜ The Lawyer European Awards 2018: Maravela | Asociații
GGI Indirect Taxes PG Meeting
shortlisted for the Law Firm of the Year���������������������������������������������������������12 Marbella, Spain
➜ Prager Metis enhances Corporate Partnership
➜ 22-25 February 2018
with the Alzheimer’s Association������������������������������������������������������������������� 13
GGI ITPG Global Tax Summit
➜ Wendy Stein promoted to Director in Intellectual Property Department�����14
Marbella, Spain
➜ LUTZ | ABEL starts 2018 highly motivated���������������������������������������������������� 15
➜ 23-25 February 2018
➜ Henry L. Goldberg, Esq. appointed Chair of CMAA (National)
GCG M&A
Legal Counsel's Committee���������������������������������������������������������������������������16
Dealmakers Meeting
➜ New shareholders at accounting firm BHKCPAs������������������������������������������16
Marbella, Spain
COMMON INTEREST ➜ 19-22 April 2018
➜ The Game Plan: Litigation and Crisis Communications in the Digital Age�17 GGI European
➜ Multilateral Instrument Signed����������������������������������������������������������������������19 Regional Conference
➜ Changes to the Taxation of US Corporations Berlin, Germany
under the Tax Cuts and Jobs Act �������������������������������������������������������������������21 ➜ 21 April 2018
➜ French Wealth Tax on Real Estate modified in 2018������������������������������������� 22 GCG M&A
➜ EU Proposal for a new Preventive Restructuring Dealmakers Meeting
Framework (‘Restructuring Directive’)��������������������������������������������������������� 24 Berlin, Germany
➜ 21-24 June 2018
GGI PRACTICE GROUP PAGES GGI North American
➜ Publishing Opportunity����������������������������������������������������������������������������������25 Regional Conference
DEBT COLLECTION, RESTRUCTURING & INSOLVENCY Denver, CO, USA
➜ DCRI Practice Group members create additional business opportunities ����26 ➜ 05-07 July 2018
INDIRECT TAXES
GGI French-Speaking Chapter
➜ Indirect Taxes Practice Group Meeting: Marbella | 22 February 2018������27
Brussels, Belgium
ITPG
➜ 06-08 September 2018 (TBC)
➜ South Africa looking to include offshore trusts in
GGI Nordic-Baltic Meeting
Controlled Foreign Company legislation.������������������������������������������������� 28
TRUST & ESTATE PLANNING Copenhagen, Denmark
➜ “…and they lived happily ever after?” Considerations & Malmö, Sweden
for Successful Business Estate Planning������������������������������������������������� 30 ➜ 20-22 September 2018 (TBC)
GGI Best Practices &
BOOK REVIEW���������������������������������������������������������������������������������������������������� 31 Developing Leaders Conference
Québec City, QC, Canada
TBC = to be confirmed
Please refer to our website
for actualised information
and additional events:
www.ggi.com > Events
GGI INSIDER | No. 93 | January 2018
4 UPCOMING GGI EVENTS
Marrakech, Morocco | 16-18 February 2018
GGI Middle East & African
Regional Conference
GGI member firm Firec & Associes
gladly hosts this biennial GGI Middle
East & African (MEA) Regional Confer-
ence, held during 16-18 February 2018 in
Marrakech, Morocco.
Those who arrive early have the op-
tion of enjoying a camel ride in the palm
groves of Marrakech on Friday after-
noon. In the evening, the programme
will officially begin with a Welcome Re-
ception in the Hotel La Mamounia, fol-
lowed by a Welcome Dinner.
The Swiss Ambassador to Morocco,
H.E. Massimo Baggi, will open the Con-
ference on Saturday morning. Minister
Aziz Rabbah, Minister of Energy, Mines
and Sustainable Development, will also
make a short opening speech.
Since the main focus of this GGI
Conference is to bring together GGI Koutoubia Mosque, Marrakech
members from within the region, while
also creating an environment conducive Following the Global Mobility Solu- the “souks”, and the great Koutobia
to trust and exploring mutual business tions and International Taxation (ITPG) Mosque will be visited.
opportunities, we have scheduled a PG meetings, there is a guided tour This Conference will end with a clos-
speed networking session at the end of through Marrakech City included in ing dinner at restaurant Chez Ali. On
the morning session to exchange mean- the programme which will provide a Sunday, an optional extended tour of
ingful information in an intense meet- superb, informal networking opportu- Marrakech City and the Ourika Valley
ing round. nity for everyone. Jamaâ Lafna Square, has also been organised. As this was
added after the online registration was
available, registered participants who
would like to join this should simply
email Julia Benn (benn@ggi.com) to
sign up.
This Conference is an ideal event
for all GGI members who would like
to strengthen business relationships
in the Middle East and African (MEA)
region. GGI members who have not
yet done so are invited to register on-
line, using the registration link within
the internal area of our website www.
ggi.com (Member Login > GGI Events
> Upcoming Events). The draft confer-
ence programme is also available on
Marrakech Spice Market the website.
Contents
5
Marbella, Spain | 22-25 February 2018
GGI ITPG Global Tax Summit
GGI member firm JC&A (Marbella,
Spain) will proudly host this very spe-
cial ITPG Global Tax Summit, com-
bined with the extraordinary meetings
of the Practice Groups Global Mo-
bility Solutions (GMS) and Indirect
Taxes. The firm will be represented at
the event by Santiago Lapausa, who
will present on “Living in the South of
Spain” – so participants will not only
experience the Marbella lifestyle by be-
ing there for three days, but will also
be informed about the tax system in
this part of the world. Indeed, if you
are considering moving, it would do
you no harm to listen to his presenta-
tion as it will cover how much it would
cost tax-wise to become a resident of Puerto Jose Banus Lighthouse in Marbella
Marbella.
This event brings together experts planned Indirect Taxes Practice Group During this meeting, Tim van der
from several Practice Groups: Indi- meeting at this event. Meer, Marlon Putter and Jeroen Kruit-
rect Taxes, International Taxation and hof will present a case study entitled, “A
GCG Capital
Global Mobility Solutions, as well as GCG success story: KKR and its first PE
specialists from the field of M&A, pro- deal on African Soil”, which will show
viding a superb networking platform how an integrated approach between
for all participants. Geneva Capital Group (GCG), www. different GGI members helped to ob-
Ensure you bring a sufficient num- gcg.com, will be holding an M&A Deal- tain an interesting M&A mandate and
ber of business cards and explore fu- makers Meeting concurrently during convert this mandate into a successful
ture business opportunities. 23-25 February 2018. GCG is a global deal. GGI Global CEO, Michael Reiss
On page 27 of this issue of INSID- network of M&A advisors, that also von Filski, will then cover “Negotiation
ER, there is a further update on the benefits from GGI membership. and Influence Techniques” before the
usual Dealmarket element of the pro-
gramme.
Joint Social
Programmes
There are a couple of combined din-
ners planned for both GGI and GCG
participants on the Friday and Satur-
day nights of this meeting to facilitate
informal networking. On Saturday af-
ternoon, participants have the option
of either taking part in a flashmob
team-building exercise or, for those not
too sure of their singing and dancing
Small street in Marbella next page
GGI INSIDER | No. 93 | January 2018
6 UPCOMING GGI EVENTS
skills, visiting Malaga and the Picasso pm so that those travelling home that issue of INSIDER, but a more up-to-
museum. evening will have ample time to get to date version of the programme is avail-
For Sunday, an optional tour to the the airport in Malaga. able online.
Rock of Gibraltar has also been sched- All GGI and GCG members may
Register Now
uled. Starting at 09:00 am in the morn- view this programme and also register
ing, the group will visit the Europa online, using the registration link pro-
Point lookout, St Michael’s Caves, and vided, within the internal area of www.
the Ape Den. The plan is for the group We have already covered the planned ggi.com (Member Login > GGI Events
to then be back in Marbella at 16:00 conference programme in the previous > Upcoming Events).
Berlin, Germany | 19-22 April 2018
GGI European
Regional Conference
This year’s GGI European Regional low GGI members in the famous Hotel ful wine merchant and restauranter,
Conference will be held in Berlin, Ger- Adlon Kempinski. first convinced Kaiser Wilhelm II that
many’s fast-paced capital, kindly host- Located right next to Berlin’s his- the German capital deserved a grand
ed by three GGI member firms: AIOS, toric Brandenburg Gate, only few ho- luxury hotel on a par with those in Lon-
FPS and Wendler Tremml. tels have had a turbulent history as the don and Paris. The hotel first opened
You do not want to miss this won- Adlon. It mirrors that of its home city, in 1907 with the Kaiser and his fam-
derful opportunity to meet up with fel- ever since Lorenz Adlon, a success- ily in attendance, and quickly became
Berlin skyline with Spree river
Contents
7
the social centre of the city. Remaining
the social centre through World War
II, the original building was actually
demolished in 1984 as the square was
left as an abandoned buffer between
east and west Berlin. With the reuni-
fication, new life was breathed into
the area and the new hotel was built,
reopening in 1997 as the new Hotel
Adlon. The hotel features prominently
in many books, and has inspired the
hotels in many movies, including Gre-
ta Garbo’s “Grand Hotel”. The British
might remember Doctor Who landing
in the hotel in 2011, but perhaps more
people remember the hotel for Mi-
chael Jackson holding his baby over a
balcony in 2002!
Berlin is a vibrant city and a monu-
ment of living history. It staged a revo-
lution, was headquartered by the Na-
zis, bombed to bits, divided in two and
finally reunited – and that was just in
the 20th century! Walk along remnants
of the Berlin Wall, marvel at the splen-
dor of a Prussian palace or visit Check-
point Charlie. Berlin is like an endlessly
fascinating 3D textbook where the past
is very much present wherever you go. Landwehr Canal viewing Potsdamer Platz
Even though it is a large multicul-
tural metropolis, deep down it main- that truly never sleeps. The city's vast dark and on weekends but pretty much
tains the unpretentious charm of an party spectrum caters for every taste, 24/7.
international village. Locals follow the budget and age group. From tiny base- There would be much more to re-
credo 'live and let live' and put greater ment clubs to industrial techno tem- port about Berlin, but why not just go
emphasis on personal freedom and ples, chestnut-canopied beer gardens, there and explore it yourself? While we
a creative lifestyle than on material fancy cocktail caverns to gourmet res- have put together some sightseeing
wealth and status symbols. Cafes are taurants, saucy cabarets to ear-pleas- tours to give you a taste of Berlin, you
jammed at all hours, clubs keep going ing symphonies – Berlin delivers hot- might still need more time before and
until dawn or beyond. Berlin is the city stepping odysseys, and not just after after the event to truly see what this
exciting city has to offer.
GGI’s conference programme prom-
ises to keep you busy and captivated
with top-notch speakers, carefully or-
ganised Practice Group meetings and
Workshops, and an excellent network-
ing platform to strengthen contacts
with your GGI colleagues, and get to
know new international GGI contacts.
GGI members who have not yet
done so are invited to register online,
using the registration link provided
within the internal area of our website
www.ggi.com (Member Login > GGI
Events > Upcoming Events). The draft
conference programme is also avail-
Hotel Adlon Kempinski right next to Berlin’s Brandenburg Gate able on the website.
GGI INSIDER | No. 93 | January 2018
8 NEW MEMBER FIRMS
Brazil Brazil The Netherlands
BPO INNOVA Expertisa de Jong & Laan
Rua Buenos Aires, 68 | 28º Andar Auditores Independentes Koningin Beatrixlaan 18
20070-900 Rio de Janeiro Avenida Presidente Wilson 165, 7681 AG Vroomshoop
Brazil cj 713-716, CEP 20030-020 The Netherlands
Rio de Janeiro
Brazil
T: +55 21 3031 5700 T: +55 21 2517 0837 T: +31 546 660 760
F: +55 21 3031 5700 E: jean-marc.vin@expertisa.com.br E: roland.ogink@jonglaan.nl
E: fabio.baptista@bpoinnova.com W: expertisa.com.br/en/ W: www.jonglaan.nl
W: www.bpoinnova.com
Company languages: English, Por- Company languages: English, Company languages: Dutch, Eng-
tuguese, Spanish French, Portuguese lish
Contact person: Fabio Baptista Contact person: Jean-Marc Vin Contact person: Roland Ogink
Services: Advisory, Accounting, Services: Advisory, Auditing & Ac- Services: Auditing & Accounting,
Tax counting, Tax Corporate Finance, Tax
Additional Office: Groningen
Fabio Baptista Jean-Marc Vin Roland Ogink
WE WISH TO EXTEND A VERY WARM WELCOME TO OUR NEW DISTINGUISHED MEMBERS.
Contents
9
The Netherlands Saudi Arabia United States
JAN© Auditors & Tax Advisers Abdullah Bakodah Cascade Partners
Waterlandlaan 96, Purmerend Consultation Office 29100 Northwestern Highway
1441 MR Amsterdam Prince Mohammed Bin Fahd Rd., Suite 405, Southfield
The Netherlands Abdullah Fouad, Near Othaim Mall Detroit, MI 48034
31432 Dammam USA
Saudi Arabia
T: +31 88 2202 200 T: +966 138 279 355 T: +1 248 430 6266
E: camiellokkerbol@jan.nl F: +966 138 271 668 F: +1 248 430 6267
W: www.jan.nl/en/ E: abdullah@bakodah.com.sa E: rajk@cascade-partners.com
W: http://bakodah.com.sa/ W: www.cascade-partners.com
Company languages: Dutch, Eng- Company languages: Arabic, Eng- Company language: English
lish lish Contact person: Rajesh Kothari
Contact person: Camiel Lokkerbol Contact person: Abdullah Bakodah Services: Corporate Finance, M&A
Services: Advisory, Auditing & Ac- Service: Advisory Additional Office: Cleveland, OH
counting, Tax Additional Office: Jeddah
Additional Offices: Rijnsburg,
Weesp, Zwanenburg
Camiel Lokkerbol Abdullah Bakodah Rajesh Kothari
WE WISH TO EXTEND A VERY WARM WELCOME TO OUR NEW DISTINGUISHED MEMBERS.
GGI INSIDER | No. 93 | January 2018
10 NEW MEMBER FIRMS
United States
SC&H Group
910 Ridgebrook Road
Sparks, MD 21152
USA
T: +1 410 403 15 00
F: +1 410 403 15 70
E: mmcgee@schgroup.com
W: www.schgroup.com
Company language: English
Contact person: Mack McGee
Services: Advisory, Auditing & Ac-
counting, Corporate Finance, Tax
Additional Office: Ellicott City, MD
Searching for
GGI member firms
all over the world?
Visit www.ggi.com!
Mack McGee
WE WISH TO EXTEND A VERY WARM WELCOME TO OUR NEW DISTINGUISHED MEMBERS.
ContentsGGI INTERNAL NEWS 11
Ashwani & Associates
featured as one of the
10 most promising taxation
service providers in India
GGI member firm Ashwani & As- tory, assessment,
sociates, Chartered Accountants, was appellate, alternate
named as one of the 10 most promis- dispute resolution,
ing taxation service providers in India and tax planning &
by leading journal Silicon India, with advisory services.
wide circulation in the IT domain. It Besides its flexibility
is regarded as the biggest producer of and wide horizon of
technology news in India; the editorial offerings, the strict
team reports on Business and Tech- maintenance of cli-
nology news. ent confidentiality
An expert panel of taxation industry with respect to sen-
and financial gurus along with the Sili- sitive and privileged
con India Editorial Board performed data has played an
a diligent evaluation on the indus- instrumental role in
try before listing the front-runners. Ashwani & Associ-
The organisations listed are the ones ates’ curation of a
which have distinguished themselves collection of loyal
through the successful ideation and clients. ‘All data ac-
implementation of practical ideas that cess and sharing is
complement the market requirements done through ad-
as well as cater to the end consumer. equately encrypted
The new Goods and Services Tax data, conforming to
(GST) regime offers challenges and the highest and lat-
opportunities and makes it impera- est/contemporary
tive for companies to have on-board standards, in addi-
an accounting firm that can meet the tion to signing NDA
demands. Addressing this fast-paced with our employ-
environment Silicon India published ees,’ asserts Aditya,
a directory of the ‘10 Most Promis- the third generation
ing Taxation Service Providers – 2017’, partner in the firm.
listing the companies which are offer- In the last quar-
ing exemplary services in the industry. ter of a century, the
Founded in 1948 by Late. Shri Mo- firm has evolved
han Lal, a legendary tax practitioner, under the aegis of
Ashwani & Associates boasts a lin- Sanjeeva Narayan
eage of more than 75 years while of- (Managing Part-
fering an entire bouquet of services ner) and Ashwani
in terms of both Direct and Indirect Kumar, recording Ashwani Kumar, Founding Partner Late. Shri Mohan Lal,
Taxes, including compliance regula- ...next page Aditya Kumar - CEO
GGI INSIDER | No. 93 | January 201812 GGI INTERNAL NEWS
20 percent annual growth on average with all the regulatory coordinates by
over the last decade. Their combined sending periodic updates. GGI member firm
endeavour has led to the firm’s cumu- ‘We believe in this simple analogy – Ashwani & Associates
lative strength of more than 75 people pay your taxes but there is no need to Auditing & Accounting, Tax, Legal,
(including nine partners), who handle leave a tip. We also serve our clients Advisory, Corporate Finance
clients and their problems/issues in to ensure they are flying first class and Ludhiana, New Delhi, Mumbai,
an effective, almost real time manner. not economy,’ asserts Ashwani. ‘We Chandigarh, India
In order to further ease its clients’ ex- currently operate from four offices. T: +91 98554 00428
perience, Ashwani & Associates is de- As per our Vision 2020, we intend to W: www.ashwaniassociates.in
veloping a comprehensive GST com- have fully-fledged offices in at least 10 Aditya Kumar
pliance tool & guide, which will assist locations,’ he concludes. E: aditya@ashwaniassociates.in
organisations in staying compliant
The Lawyer European Awards 2018:
Maravela | Asociatii
,
shortlisted for the Law Firm
of the Year: Eastern Europe
and The Balkans Award
This is the fourth year in a row that
GGI member firm Maravela | Asociații
is recognised by the judging commit-
tee of The Lawyer European Awards.
This year the firm has been shortlisted
for Law firm of the year: Eastern Eu-
rope and The Balkans.
This category was only open to inde-
pendent firms headquartered in Alba-
nia, Bosnia & Herzegovina, Bulgaria,
Croatia, Cyprus, Greece, Montenegro,
Romania, Serbia and Slovenia.
Judges have paid attention to firms
able to demonstrate that they have had
an exceptional year, managing the pres-
sures of the economic environment
while maintaining high levels of client Gelu Maravela Alina Popescu
service. They were equally looking for
firms that can clearly articulate their the past year and planned investment. possessing strategic initiatives aimed at
strategy and vision for the future, both Shortlisted firms had to prove their growing cross-border and referral work,
in terms of significant developments in ability to operate in the global economy, both inbound and outbound.
Contents13
‘Besides information related to port- work but also recognising the manag- side numerous premier European
folio growth and continuous training ing partner of the year and holding a firms equally recognised for their work.
of our team members, this year the distinct global in-house category), the The winners will be announced in
use of technology and its application awards showcase the achievements of March, in London, during the awards
to better customer service was taken firms to the rest of the industry. gala that will bring together more than
into consideration. We understood The judging panel is comprised of 300 managing and senior partners to
from the representatives of The Law- partners of top international business network and celebrate the most suc-
yer European Awards that, this year law firms and in-house top manage- cessful firms in Europe.
as well, there were many firms who ment representatives of multination-
have entered the competition and sent al companies. The list includes big
submissions. Congratulations are in names such as: Airbnb, Barclays, Bare GGI member firm
order, to all the finalists. We are very Essentials (Shiseido Group), Dixons Maravela | Asociații
happy with the result, that further- Carphone, Hohan Lovells, Mills & Law Firm
more follows last year’s success, as Reeve, Mischcon De Reya, Navigators Bucharest, Romania
we were designated the Law Firm of Insurance, Northrop Grumman, Or- T: +40 21 310 17 17
the year: Romania.’ Gelu Maravela and well Group, Osborne Clarke, PayPal, W: www.maraela.ro
Alina Popescu, Managing Partners of Shoosmiths, Societe Generale, TLT, Gelu Maravela
Maravela | Asociații. Travers Smith, TSYS International, E: gelu.maravela@maravela.ro
Currently in their ninth year and Weightmans, Wolseley, Womble Bond Alina Popescu
structured into 24 categories (by coun- Dickinson and WS Atkins. E: alina.popescu@maravela.ro
try, region, types of deals and referral Maravela | Asociații stands along-
Prager Metis enhances
Corporate Partnership with
the Alzheimer’s Association
Team contributes over USD 120,000 in the second year
Prager Metis CPAs, LLC, is proud to Co-Managing Partner David Neste had
announce the successful continuation this to say: ‘We knew from day one we GGI member firm
of our corporate partnership with the wanted our firm to support a cause, the Prager Metis International LLC
Alzheimer’s Association. In 2017, Prager Alzheimer’s Association was a perfect Advisory, Auditing & Accounting,
Metis International helped raise over fit and working with them has been an Corporate Finance, Fiduciary &
USD 120,000 for the Alzheimer's Asso- honour.’ Estate Planning, Tax
ciation. The partnership began in the Autumn Basking Ridge (NJ), Coral
Alzheimer’s disease hits home for of 2016 and continued in 2017. In June, Gables (FL), El Segundo (CA),
those of Prager Metis, as it directly af- Prager Metis participated in ‘The Longest New York (NY), White Plains (NY),
fects many of our team members’ loved Day’, where all of our offices participated Woodbury (NY), USA
ones including co-Managing Partners, with AC\DC karaoke parties in each of- T: +1 212 643 00 99
Glenn Friedman and David Neste, who fice as well as ‘Spin for a Cure’ and a W: www.pragermetis.com
both lost their fathers to the disease this Chess Exhibition to raise awareness David R. Neste
past spring. and funds. This past autumn Prager E: dneste@pragermetis.com
On the beginning of the partnership, ...next page
GGI INSIDER | No. 93 | January 201814 GGI INTERNAL NEWS
Metis continued the partnership by hav- fected by Alzheimer’s and other forms of
ing teams walk in the regional ‘Walk to dementia. They are the largest non-profit
End Alzheimer’s’. Prager Metis was rep- funder of Alzheimer's research; the As-
resented in the Manhattan, Long Island sociation is committed to accelerating
NY, New Jersey, Los Angeles, Miami and the global progress of new treatments,
Westchester, NY walks, raising over USD preventions and, ultimately, a cure. Back
120,000 for 2017. in 1979, Jerome H. Stone and repre-
Co-Managing Partner, Glenn Fried- sentatives from several family support
man, stated, ‘Partnering with the Al- groups met with the National Institute
zheimer’s Association has been incred- on Aging to explore the value of a nation-
ible, our Prager Metis team members al, independent, non-profit organisation
all coming together to bring us one step to complement federal efforts surround-
further to finding a cure to this disease. ing Alzheimer's disease. That meeting
We look forward to what the future has resulted in the 10 April 1980 formation
in store.’ of the Alzheimer's Association, with Mr
The Alzheimer’s Association works on Stone as founding president. Today the
a global, national and local level to en- Association reaches millions of people
hance care and support for all those af- affected by the disease worldwide. David Neste
Wendy Stein promoted
to Director in Intellectual
Property Department
GGI member firm Gibbons P.C. is her in her new role,’ said Patrick C.
pleased to announce that Wendy R. Dunican Jr, Chairman and Managing
Stein has been named a Director in Director of the firm.
the Intellectual Property Department At Gibbons, Ms Stein focuses her
in the firm’s New York office, effective practice on intellectual property dis-
2 January 2018. putes, primarily in the patent and
‘We are extremely proud of Wendy trademark areas. She has extensive
and we look forward to working with experience litigating a broad variety
of patent infringement and other mat-
ters in the pharmaceutical and life
sciences arenas, including matters re-
GGI member firm lated to a variety of medications, and
Gibbons P.C. SABAs used to treat asthma and/or
Law Firm COPD. Ms Stein also has substantial
New York (NY), Newark (NJ), experience litigating patent infringe-
Trenton (NJ), USA ment disputes in the non-pharma
T: +1 212 613 2043 area, including matters related to GPS
W: www.gibbonslaw.com devices, gaming, hand-held devices Wendy R. Stein
Wendy Stein and packaging.
E: stein@gibbonslaw.com In addition, Ms Stein has litigated ment/counterfeiting disputes involv-
trademark ownership and infringe- ing perfume, apparel, electronics,
Contents15
real estate and gaming. She has ap- nia, Florida, Texas, District of Colum- a Rule 36 affirmance of five separate
peared before federal and state courts bia, Illinois and Nebraska, and before summary judgments concerning al-
throughout the US including New the Court of Appeals for the DC and leged patent infringement, false pat-
York, New Jersey, Delaware, Califor- Federal Circuits, recently obtaining ent marking and commercial claims.
LUTZ | ABEL begins
2018 highly motivated
After an extremely successful busi-
ness year 2017 for LUTZ | ABEL law firm,
the prospects are looking great for 2018
The GGI member-firm currently employs
more than 50 lawyers and has been able
to significantly expand its range of legal
services.
The client-oriented
approach has not gone
unnoticed in the past
year. Besides top rank-
ings in the practice
areas of labour law,
construction law and
corporate law based
on a survey published
by the German news
magazine ‘FOCUS’, five
lawyers of LUTZ | ABEL were mentioned Dr Wolfgang Abel and Dr Reinhard Lutz
amongst ‘Germany’s Best Lawyers’ in
their respective fields of expertise by the of the next generation in their practice | ABEL. Founding and executive partner
German business newspaper ‘Handels- areas. Dr Reinhard Lutz said: ‘Receiving these
blatt’. These awards are the result of a However, the awards is a great feeling. It confirms that
broadly based survey commissioned by highlight for LUTZ | we are on the right track.’
the US publishing house ‘Best Lawyers’. ABEL in 2017 came LUTZ | ABEL wants to thank its clients
The law firm with its at the annual JUVE and business partners for their good co-
head office in Munich awards ceremony. operation and looks forward to the up-
has also been named The firm was nomi- coming tasks.
a ‘recommended law nated for and won
firm’ by ‘The Legal 500 the ‘Law Firm of the
Germany’. Further- Year – Mittelstand’ GGI member firm
more, LUTZ | ABEL re- award. Actually LUTZ | ABEL
ceived a top tier rank- winning this award Law Firm
ing in corporate law is the greatest hon- Munich, Germany
and 18 lawyers have our in the law firm’s T: +49 89 544147-66
been mentioned as 23-year history. A second award (‘Law W: www.lutzabel.com
recommended lawyers. Firm of the Year – Region South’) com- Dr Christian Dittert
Two Partners were even pleted a wonderful result in recognition E: dittert@lutzabel.com
honoured as the names of the hard work of the lawyers at LUTZ
GGI INSIDER | No. 93 | January 201816 GGI INTERNAL NEWS
Henry L. Goldberg, Esq.
appointed Chair of
CMAA (National) Legal
Counsel’s Committee
Henry L. Goldberg, a Partner of Moritt moting construction management as
Hock & Hamroff LLP and Chair of the a profession, as well as establishing its
firm's Construction Law Practice Group, standards of practice. In addition, it pro-
was recently appointed by the Construc- motes educational activities and advo-
tion Management Association of America cacy on behalf of the CM community, en-
(CMAA) to serve as Chair of its (National) hancing the professional development
Legal Counsel Committee. In addition, of its practitioners. Among the CMAA
Mr Goldberg was also appointed as an ad membership are some of the largest
hoc member of its Board of Directors. construction enterprises in the country,
The CMAA, based in McLean, Vir- as well as major public and private agen-
ginia, has been at the vanguard of pro- cies dedicated to the highest standard of
construction management.
Mr Goldberg has served as legal
GGI member firm counsel to the CMAA NY/NJ Chapter
Moritt Hock & Hamroff LLP for over a decade and will be bringing
Law Firm that experience to CMAA National. He Henry L. Goldberg
Garden City (NY), New York (NY), stated, ‘I am indeed honoured to accept
USA this challenge and responsibility at this recently appointed President and CEO,
T: +1 516 873-2000 unique juncture in the CMAA’s history. Andrea Rutledge. I anticipate working
W: www.moritthock.com After years of able leadership under the with Andrea and the entire Board for
Henry L. Goldberg stewardship of prior CMAA President the betterment of the profession of con-
E: hgoldberg@moritthock.com and CEO, Bruce D’Agostino, I look for- struction management throughout the
ward to the new leadership provided by United States.’
New shareholders with
accounting firm BHKCPAs
We are pleased to announce that as shareholders with the accounting Millan, CPA, has over 20 years’ expe-
Danhira Millan, Mark Gehring and Mi- firm of Barbich Hooper King Dill Hoff- rience with BHK. Her expertise is in
chael Stevenson have been admitted man (www.BHKCPAS.com). Danhira accounting, auditing and attestation
ContentsCOMMON INTEREST 17
Danhira Millan Mark Gehring Michael D. Stevenson
with an emphasis on employee benefit minimisation planning and strategies with an emphasis on agriculture and
plans, special districts and non-profit for small businesses and family groups manufacturing.
organisations.
Mark Gehring, CPA, has over 14
years’ experience with BHK. His ex- GGI member firm
pertise is in accounting, auditing and Barbich Hooper
attestation with an emphasis in manu- King Dill Hoffman Danhira Barajas Millan
facturing companies, special districts, Auditing & Accounting, Fiduciary E: danhiram@bhkcpas.com
agricultural companies and mortgage & Estate Planning, Tax Mark Gehring
banks. Bakersfield (CA) USA E: markg@bhkcpas.com
Michael D. Stevenson, CPA, has T: +1 661 631 1171 Michael D. Stevenson
over 10 years’ experience with BHK. W: www.bhkcpas.com E: michaels@bhkcpas.com
His expertise is in tax compliance, tax
The Game Plan: Litigation
and Crisis Communications
in the Digital Age
By Richard Levick, CEO of LEVICK strategic and tactical; in other words, change how people receive and share
companies must have both a game information? Both receiving and shar-
Part II of a two-part series plan and a familiarity with the ever- ing are pivotal: receiving, for the ob-
evolving digital tools with which that vious reason that democratised news
In today’s digital age, it’s not just plan can be made to succeed. choices undermine the nearly three-
the audience that’s changing. The In- It’s not about the newest gadgets or century-old Fourth Estate oligopolies.
ternet itself is also constantly changing flashy social media platform, but rath- Sharing is equally powerful because
to an extent that demands persistent er about separating the wheat from the how information is exchanged changes
attentiveness to the actual means of chaff. Of all the hundreds of new media the equation. If news consumers can
communication. The challenge is both platforms and hardware, which ones ...next page
GGI INSIDER | No. 93 | January 201818 COMMON INTEREST
now share their stream of informa- This was precisely the sort of deci-
tion, they have the power of William sive ‘event’ that should inform how
Randolph Hearst (‘You furnish the lawyers and corporate communicators
pictures, and I’ll furnish the war’) to go about their business. At a crucial
develop and sway trends. The truth is moment during a litigation, crisis or
usually only what people learn first. As other brand-impacting scenario, glob-
the old saying goes: ‘A lie can travel al corporations and those who advise
halfway around the world while the them must know not just what to com-
truth is putting on its shoes’. municate, but how to communicate it.
You concede the argument by ignor- Emotions, not facts, control the narra-
ing seismic trends. tive and therefore jury pools.
May 1, 2012 – The Three Lessons
The Revolution Will of the Information
Be Televised Revolution
Richard Levick, Chairman and CEO of
LEVICK
On 1 May, 2012, these trends grew mented, so no one can game the sys- There are three critical takeaways
ever more seismic when Google tem. But the 1 May, 2012 change was from this transformative shift in com-
changed its analytics to give optimisa- historic because, for the first time, munications. While they may seem
tion precedence to spoken versus writ- audio changed the game. Suddenly, obvious, they are indeed so transfor-
ten content in search results. (If you videos could control the narrative of mative as to demand separate consid-
want to keep something a secret, the a case or a controversy largely by con- eration.
safest place is the second page of a trolling the search results. While the Speed – To say that the Internet has
Google search result.) defence bar has still largely not figured sped up our lives is to repeat the pain-
Changes in analytics happen maybe this out, the plaintiffs’ bar and activist fully obvious. Yet we usually miss the
100 times a year at Google. They are investors merrily control the narrative real lesson because we think it’s all
always kept secret until they’re imple- in matter after matter. about doing the same thing, only fast-
Contents19
er; but that is a drastic misreading of pitching their side of the story? Who’s ever permanent; trust is now measured
the fact and a sure-fire recipe for disas- hacking whom and what information in terms of days and weeks: Yesterday,
ter. Speed really means that we can no has now become available? In all cas- you or your client might have gotten
longer base litigation or crisis commu- es, as we discussed in part one of this the benefit of the doubt; today, not so
nications strategy on being reactive. series, intelligence informs strategy. much. In a week or two at most, you
We must now enter the far riskier, un- Forewarned is proverbially forearmed will be perceived guilty until proven in-
familiar world of the proactive. There and everything else is guesswork. nocent.
is no longer any time to be reactive Transparency – We all claim to be in Now more than ever, you have to use
because minds are already made up by favour of transparency until we’re the your peacetime wisely and build a brand
the time you have done so. one called on to be transparent. Then like Hershey’s or Harley-Davidson.
This new proactivity doesn’t neces- our enthusiasm wanes. Information Such companies have armies of true be-
sarily mean going first and it certain- leaks caused by hacks are veritable cer- lievers who know that problems are the
ly doesn’t mean taking unnecessary tainties. The reason for the hack may exception rather than the norm. To as-
risks. Agile proactivity entails instead have nothing to do with the litigation pire to this favoured circle, you have no
the kind of in-depth and substantive in which a company is embroiled or choice but to build your trust bank now,
risk assessment that informs you as to the matter that you’re working on. But before the litigation or crisis tests your
what’s going to happen next. All com- once in the ether, the information is brand loyalty. Once the blockbuster law-
munications strategy must be built fair game for anyone to exploit, includ- suit is filed, the lawyers need to ask the
on the kind of risk intelligence that ing your adversaries. communications professionals what
is gained from a far deeper dive than If you don’t want it public, don’t they are doing outside of the litigation
Google searches or a discussion with write it down. Difficult advice to follow to earn trust in an environment where
traditional enterprise risk management some of the time, but sound practice trust is no longer a given.
professionals generally allow. We’re all of the time. If you have written it A proactive game plan, based on
talking instead about the resources, down, if you’re running that risk for multidisciplinary reviews of data and
human and otherwise, that can deci- whatever good business or legal rea- risk maps, executed and deployed to-
pher the melody amid the proliferation son, anticipate in your contingency day, will protect you from having to be
of digital noise in today’s world. planning how you’ll respond when the ineffectively reactive tomorrow. Oper-
Bank scandals, fracking, offshore worst happens and when that written ating in an environment of fear almost
drilling, sugar and thousands of other information is shared publicly from the always clouds judgement, which in
matters and entire industries going least flattering point of view. turn can paralyse communications and
south – for each of these momentous Anger – People are angry in ways we weaken the defence.
shocks, there were key patterns evident have not seen since the 1968-72 period Part one of this two-part series can
months or years ahead. You must look at the height of the anti-Vietnam War be read in Insider 92.
for them; understand who’s saying movement. At times it feels like we are Richard Levick is Chairman and CEO
what, from where and why. Who is the moving towards an 1856-1860 pre-Civil of LEVICK, a global advisory firm provid-
first to tweet? What is the URL? Who is War environment. Trust is at a premi- ing a full range of strategic communica-
funding it? Are they purchasing search um and your corporate ‘trust bank’ may tions consulting services to companies
engine marketing advertisements? be overdrawn. Indeed, the five big tech and nations involved in critical high-
Where is the information coming from? companies – Facebook, Apple, Ama- stakes issues. For a free copy of this e-
What does relevant NGO fundraising zon, Netflix and Google – are moving book, from which this article is excerpted,
cover? Who’s behind the video? To from gods to robber barons before our please email Richard Levick (rlevick@
which journalists are your adversaries eyes. No time on Mount Olympus is levick.com).
Multilateral Instrument Signed
By Bernhard Schwechel (MLI) in Paris. This is a product of the internationally accepted standards -
OECD’s BEPS project and designed to faster than would be possible using
On 7 June 2017, almost 70 coun- dynamically adjust a multitude of exist- individual bilateral negotiating proce-
tries including Germany signed the ing bilateral double taxation treaties dures.
so-called ‘Multilateral Instrument’ (BDTs) between member countries to ...next page
GGI INSIDER | No. 93 | January 201820 COMMON INTEREST
What is at issue? relevant properties are located if the
value of these shares or interests
within the last 365 days prior to the
First, the MLI implements various sale was based directly or indirectly
minimum standards that were negoti- at more than 50% on real estate lo-
ated in the context of the BEPS project cated in said treaty country (Art. 9 of
as BDTs between the member states. the MLI).
In addition to these minimum stan- ‘Permanent establishments’: Re-
dards, the MLI also contains certain garding the list of exceptions, from
rules for the adjustment of BDTs that now on only preparatory activities
were also developed in the context of and auxiliary activities qualify as not
BEPS. However, member countries creating a permanent establishment
have certain freedom of choice in this (Art. 13 MLI; they can be determined
regard as to whether they wish to im- based on the business model of the
plement these additional rules in their respective total enterprise).
BDT. ‘Mutual agreement procedure be-
The countries are also entitled to tween the treaty countries to avoid
select at their own discretion the BDT double taxation’ (Art. 16 MLI). Cur- Bernhard Schwechel
that should be adjusted through the rently, mutual agreement proce-
MLI (‘Covered Tax Agreements’). Thus, dures are already conducted by the cluded in the BDT with the USA – it
the MLI does not create a situation Federal Central Tax Office. At the lends decisive power to agreements
of complete harmony for the existing EU level, on 23 May, 2017, finance between countries, which are diffi-
BDTs between member nations. ministers adopted a guideline for cult to achieve at a practical level.
When the MLI was signed, Germany dispute resolution in double taxa- ‘Expansion of the concept of es-
picked 35 of the currently existing 96 tion cases. Pending its approval by tablish ment to commissionaire
BDTs (such as the BDT with Austria the EU Council, this guideline will be models and similar entities’ (Art. 12
and the UK). Conversely, 33 countries applied to tax years beginning from 1 MLI); Germany has expressed res-
have selected their BDT with Germany January, 2018. ervations about this already prior to
in order to implement the MLI. The ‘Compulsory fiscal arbitration pro- the signing due to anticipating that
implementation of the MLI in general, cedures’ (Art. 18 ff.; to be executed foreign countries may increase the
and of individual additional rules in within a period of three years subse- number of resident establishments,
particular, requires that the other in- quent to unsuccessful mutual agree- thereby causing an outflow of taxa-
volved treaty nation has also selected ment procedures). tion substrate from Germans to oth-
to implement the MLI and/or the re- er countries.
Rules that Germany
spective additional rules. ‘Length of permanent establish-
ments for construction and instal-
Rules that Germany does not intend
lation projects’ – Integration of vari-
ous contractual agreements (Art.
intends to implement to implement
14 MLI); there are already national
regulations in the administrative
principles for the apportionment of
Germany has announced that it in- Germany has announced that it in- establishment profits (VWG BsGa).
tends to implement especially the fol- tends to refrain from implementing es- The regulations, which expand the
lowing conventions: pecially the following conventions: preamble of a BDT in that the latter
‘BDT intercompany tax concession’: ‘Transparent entities’ (hybrid enti- not only is supposed to prevent double
A minimum holding period of 365 ties, Art. 3 MLI); this has been ad- taxation but also double non-taxation
days is introduced as a prerequisite dressed already by the so-called due to tax evasion or tax avoidance
for withholding tax relief on divi- ATAD I and ATAD II directives at the (Art. 6 MLI), were met in part with res-
dends (Art. 8 of the MLI); this shall EU level, and Germany intends to ervations in Germany. The same goes
not affect minimum holding periods implement them in the context of a for the implementation of the so-called
(e.g. BDT Italy) that are already in ‘complete solution’. ‘principal purpose test’, according to
place. ‘Entities with dual residency’ (Art. 4 which prior to granting treaty benefits,
‘Real estate companies’: Profits MLI); thus, taxation rights remain it has to be ascertained whether the
from the sale of corporate shares with the country in which an entity’s benefits were one of the main objec-
and partnership equity interests can executive board is located. An im- tives of the taxpayer agreement (Art. 7
be taxed in the country in which the portant exception to this rule is in- MLI).
Contents21
Where do we ment of ratification, if Germany does
not already belong to the first five GGI member firm
go from here? countries. By all accounts, ratification
takes place in Germany after the par-
FACT GmbH
Steuerberatungsgesellschaft
liamentary elections, so that the se- Wirtschaftsprüfungsgesellschaft
At the OECD level, at least five coun- lected BDT will be implemented from Rechtsanwaltsgesellschaft
tries have to first deposit their instru- 2019. Tax, Auditing & Accounting, Ad-
ments of ratification. Three months The MLI has been issued in two visory, Corporate Finance, M&A,
after the last instrument of ratification mandatory languages (English and Fiduciary & Estate Planning
has been deposited, the MLI becomes French) and was signed in that form Kassel, Germany
effective for these first five countries. by the federal ministry of finance as T: +49 561 316 686 0
Additional countries may join. well. There is only a non-binding Ger- W: www.fact-ks.de
For Germany, however, the MLI is man translation. It remains to be seen Bernhard Schwechel
implemented no sooner than three how Germany will handle this in the E: b.schwechel@fact-ks.de
months after the deposit of its instru- context of the legislation procedures.
Changes to the Taxation
of US Corporations under
the Tax Cuts and Jobs Act
By Howard Bakrins fore 1 January 2023 (1 January 2024 for
longer production property and certain
2018 brings in sweeping reforms to aircraft). Bonus deprecation amounts
the US taxation of corporations. Among are phased-out after that date. Equally
the many changes are lower corporate important is that the legislation also re-
tax rates and changes to some corpo- moves the original use of the property
rate deductions, as well as changes to requirement, allowing bonus deprecia-
the taxation of foreign subsidiaries of tion to be claimed on purchases of used
US corporations. equipment.
The new tax legislation (H.R. 1), pro- Unfavourable changes to corporate
vides for a flat 21% tax corporate in- deductions include a limitation of net
come tax rate beginning in 2018, and interest expense to 30% of adjusted tax-
it makes this new rate permanent. This able income for companies with aver-
is a significant decrease from the maxi- age gross receipts of USD 25 million or
mum tax rate of 35% prior to 2018. Un- more. The law also eliminates the Do-
der the new law, the 80% and 70% cor- mestic Production Activities Deduction
porate dividends received deduction are (DPAD), and makes changes to the tax
reduced to 65% and 50% respectively. Howard Bakrins treatment of meals & entertainment,
In addition, the corporate Alternative research & development expenditures
Minimum Tax (AMT) is eliminated. corporations. (after 2021) and net operating losses.
The new legislation also includes a The new law also provides for a The new law also establishes a ter-
deduction of up to 20% qualifying busi- 100% ‘bonus’ deprecation deduction ritorial system for the taxation of for-
ness income from pass-through enti- for qualifying property placed in ser- eign income that replaces the prior-law
ties, such as partnerships, LLCs and S vice after 27 September 2017 and be- ...next page
GGI INSIDER | No. 93 | January 201822 COMMON INTEREST
system of taxing US corporations on whether distributed or not, will be sub-
the foreign earnings of their foreign ject to a one-time US tax on the tran-
subsidiaries only when the earnings are sition to this territorial tax system. Cu-
distributed. The new legislation creates mulative deferred foreign earnings that GGI member firm
a permanent tax exemption for US cor- are in liquid form will be subject to a Kutchins, Robbins
porations on the foreign earnings when one-time 15.5% tax and non-liquid de- & Diamond, Ltd. (KRD)
those earnings are distributed (provid- ferred foreign earnings will be subject Auditing & Accounting Tax,
ed the corporation owns 10% or more to a one-time 8% tax. This tax can be Advisory, Corporate Finance,
of the foreign corporation). Thus, with paid over an 8 year instalment period. Fiduciary & Estate Planning
certain exceptions, repatriation of for- The one-time tax applies equally to both Chicago (IL), USA
eign subsidiaries’ earnings by US cor- C and S corporations with foreign sub- T: +1 847 240 1040
porations will no longer be taxed in the sidiaries; however, S corporations in the W: www.krdcpas.com
US beginning in 2018. US can elect to defer taxation on the cu- Howard Bakrins
Generally, however, all cumulative mulative deferred earnings of their for- E: hbakrins@krdcpas.com
post-1986 deferred foreign earnings, eign subsidiaries.
French Wealth Tax on
Real Estate modified in 2018
Written by Alexane Palide, faced the French wealth tax ISF (Impôt
edited by Prof Robert Anthony de Solidarité sur la Fortune), which
was a tax for French residents on the
A New Year with new resolutions global capital of assets and only ap-
and new rules! January is the time plicable on property in France for non-
for adopting new ideas and this is es- residents.
pecially so in the implementation of The new changes are for 2018, and
amendments to the tax system ani- will have a direct consequence on fu-
mated politically by the French gov- ture advice as the modification will
ernment, as mentioned in their elec- tax real estate assets only. This new
tion manifesto. tax reform maintains the principles of
The French president Emmanuel the previous wealth tax as it concerns
Macron once again proved his com- real estate values greater than 1.3 mil-
mitment to these changes, when lion euros, with the same tax rates.
presenting his wishes for 2018, by The originality of the IFI (Impôt sur
announcing his intention to ensure la Fortune Immobilière) and the re-
that his programme is successfully Alexane Palide strictions due to this modification will
approved by the French government. have a direct effect on the calculation
the French wealth management strat- of tax due. Regarding the deduction of
IFI: a new
egies. The necessity of knowing the debts relating to the real estate assets
new laws is essential, especially if one (whether held by a real estate compa-
version of the French
has to plan in order to optimise and ny or directly owned), the new finance
appropriately organise client’s assets. act introduces a cap on the deductibil-
wealth tax?
International ultra-high net worth ity of the borrowing.
individuals, UHNWIs, are concerned The change will concern real estate
about the impact of the taxes pos- with a market value over and above
The application of the new financial sibly due. This is a challenging time EUR 5 million when this has bank fi-
bill will have direct repercussions on for wealth managers. Certain clients nancing of in excess of 60% of the
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