Feeds:
Posts
Comments

Posts Tagged ‘accountant’

  • Israel is the size of New Jersey, but instead of miles and miles of the Turnpike, Israel has miles and miles of desert. Always carry water and wear a hat and sunscreen because the sun is hot!
  • I learned that no matter where you are in Israel you’ll always have a beautiful view of the desert, the Mediterranean Sea or a city. The pictures don’t do it justice.
  • Everyone carries a gun in Israel, which was just another cultural difference to get used to. I would see 18-year-old men and women carrying assault rifles throughout the day.
  • If you are an Israeli citizen it is mandatory to join the military. Men must serve three years and women serve two, however joining the military does not require you to be a soldier. You can hold any position in the military, including an accountant or a Zumba & fitness instructor, which is what one of the girls on our trip does on her base.
  • Expect to eat salad for breakfast and hummus on everything. Lunch options include Shawarma (similar to a gyro) or Falafel.

Fun Facts (2)

By Lonnie Bloom, MBA | 609.520.1188 | lbloom@withum.com

Read Full Post »

From “A Primer on Transfer Pricing” by Robert J. Misey, Jr., updated by Kimberlee S. Phelan

 

A transfer price is the price charged for intercompany transactions.  The principles of I.R.C. section 482 require that intercompany transactions be priced at arm’s length.  Although ostensibly a simple concept, the arm’s length standard has spawned hundreds of pages of regulations.

 

Transfer pricing continues to be a hot issue for multi-national companies.  Mr. Misey has learned informally from his former colleagues at the I.R.S. that companies with sales in excess of $15 million in sales can expect to have an I.R.S. economist review their intercompany transactions.  Because intercompany transactions across international borders continue to expand and because the I.R.S. continues to rigorously review intercompany transactions, transfer pricing is more than just the international tax issue of today, it is the tax issue for this millennium.

 

Political awareness of the amount of taxes paid by foreign-owned companies, may have led many U.S.-based companies to not worry about transfer pricing.  However, the transfer pricing regulations can trap U.S.-owned companies with modest operations abroad just as easily as foreign-owned companies.

 

For example, suppose NJCo manufactures and sells widgets in the U.S.  Due to increased widget orders from Canadian customers, NJCo decides to form a Canadian distribution subsidiary (“CanSub”).  Although CanSub does not have any manufacturing functions, CanSub employs its own administrative and sales staff while using NJCo’s unique distribution software to ensure that there are not any distribution problems.  In an effort to make sure that CanSub is financially solvent, CanSub has payment terms to NJCo of six months and, if CanSub’s customers do not pay, CanSub enjoys the use of NJCo’s collection staff, which is comprised of former defensive linemen from Rutgers.

 

The Best Method Rule

The best method rule in the section 482 regulations states that the arm’s length result of a controlled transaction must be determined under the method that, given the facts and circumstances, provides the most reliable measure of an arm’s length result.  The application of the best method rule establishes an arm’s length range of prices or financial returns with which to test the controlled transactions.  The tested party must fall within the middle fifty percent of that range, known as the interquartile range.

 

In determining the most reliable measure of an arm’s length result, NJCo should consider the degree of comparability between controlled and uncontrolled transactions by analyzing the functions, contractual terms, risks, economic conditions, and the nature of goods and services supplied.  If this analysis requires numerous or sizable adjustments to meet comparability, the comparable may not be reliable.

 

Future blogs will review how the U.S. transfer pricing regulations affect the intercompany transactions between NJCo and CanSub.

 

 

 

For additional information, please contact Kimberlee Phelan or Robert Misey

 

Robert J. Misey, Jr.

Reinhart Boerner Van Deuren s.c.

Admitted in California, Wisconsin, and the District of Columbia

Milwaukee Office: 414-298-8135 

Cell: 414-550-3270

Chicago Office:  312-207-5456

rmisey@reinhartlaw.com

Read Full Post »

WithumSmith+Brown just completed our second annual “Withum Week of Caring,” with over 400 individuals donating time to over 40 local organizations.  Giving Back at Withum, however, occurs around the year and around the world.  This is a story of Doris Martinez from our Red Bank office, who traveled to Africa this past summer to serve those in need, but gained so much more in return.

 

Doris writes:

 

In August, I travelled 8,089 miles to Maputo, Mozambique, a country located in the south eastern part of Africa to work in an orphanage for three weeks.  I chose this particular orphanage – Zimpeto Children’s Centre (http://www.irismin.org/zimpeto) after a happenchance meeting in 2011 with Laura, a mission worker who resides at the orphanage and was in New Jersey visiting with her mom who is a member of the same church I attend.  Laura had so much enthusiasm for the work she does with the centre and children she cares for, that I decided to visit her to share in her excitement.

 

Zimpeto Children’s Centre houses about 300 children ages newborn to 20. While most of the children are orphans who have lost their parents, some parents choose to have their children live there because they cannot provide for their kids.  The orphanage has several dorms for the kids, a church (which is also the dining room), school rooms and a medical unit.  The orphanage feeds and educates the local community, as well.

 

A typical day for me included waking up to a siren at 6 am, followed by the breakfast siren at 7 am.  The kids would be in school until the lunch siren at 12:30 pm.  After lunch I would help Laura in her dorm give extra schooling to her boys (she is dorm mom to 30 boys ages 4-8).  This would include helping them learn to write their names, learning the alphabet and doing a craft project.  A siren would sound at 4:30 pm for showers, followed by the dinner siren at 5:30 pm.  Most nights you could find me in the toddler house (kids 1-3 years old) helping with dinner, baths and putting the kids to bed at 6:30.  If I was not in the toddler house, I would be in the nursery feeding and holding the infants.

 

In addition to helping with the kids, I would help with ministry work.  We would go to the local jail and minister to the prisoners, the local hospital and pray for the sick, sing on the street corners with the kids and minister to those less fortunate who lived on the garbage dump seeking food scraps from the drop offs.

 

Despite the living conditions in Mozambique, the children at the orphanage get three meals a day (bread and rice are the staples of most meals), an education and are well loved by the missionary workers.  Most children have very few possessions, but they are always smiling and ready for hugs from those who will give them.

 

Thank you all for the gifts you have given me to take to the kids.  I know I came away with much more than I left behind.  Would I go back to sleeping in a mosquito net, cold showers, hand washing of my clothes, no TV or internet access and minimal food……yes, I am planning on returning in July 2013.

 

 

Read Full Post »

In Shandong province, I had the opportunity to visit the provincial town of Jinan — a town of 8 million.  Jinan is known for its springs — underwater aquifers feed 72 named artesian karst springs at a public park in the middle of downtown Jinan called Baotu Quan Gong Yuan.  The most famous of these springs is the 3,500 year old Baotu Spring.  The park is also the ancestral home of one of Shandong’s most beloved poets, Li Qingzhao (1084 – 1151).  Her life story is presented through life-size dioramas in the rooms in her home.  The waters of the Jinan springs are said to be “softer and sweeter” and contain health-affirming properties.

 

While in Jinan, I spent an afternoon meeting with HLB colleagues at HLB Baicheng, a large tax consulting firm with offices in both Jinan and Shanghai.  In addition to learning about Baicheng’s practice and preparing for a conference the next day, we were treated to a “Chinese Banquet.”  I was honored to be received by the head of Shangdong ‘s institute of certified public accountants as well as two members of the international division of the Chinese Tax Authority.  The evening began with toasts (4 by the host, 3 by the co-host, 2 by the protégés of the hosts and then 1 by each of the guests).  The meal included all measure of Chinese delicacies — seafood soup with sea cucumber, eel, chicken (including the head, comb and feet).  How lucky was I to sit next to the host and not have to chose what to eat, but to merely eat what was put on my plate by my host?

 

The next day, my fellow HLB International Tax Committee members and I presented at the Annual Shangdong Tax Conference, co-sponsored by the Shandong institute of certified public accountants and HLB Baicheng.  We presented an overview of the tax systems of the US, Germany and the Netherlands to almost 600 delegates (shown below).   For the first time, I had to work with a simultaneous translator — our presentations were in both English and Chinese, and our translators were excellent.  After one afternoon, they were able to handle complex tax concepts in both English and Chinese.

 

Read Full Post »

A 12-hour time difference (after 16 hours on a plane) really does wreak havoc on a sleep schedule.  “Jet Lag” most often results from a high-speed trip through multiple time zones.  Duh!  The symptoms include fatigue, inability to concentrate, feeling disoriented or out-of-sync and headaches — none of which you want to have to deal with when trying to conduct BUSINESS after that “high speed trip through multiple time zones.”

 

Is it avoidable?  Not really, but it can be partially managed (at least I’ve TRIED to manage).  I haven’t been one to go the prescription drug route when travelling, but I find a glass of wine and two Advil PM help me fall asleep on long plane flights — and discovered they are only somewhat useful when trying to get back on “sleep schedule” either during or after a long “high speed trip through multiple time zones.”  What do others recommend?

 

  • Prepare for the time change:  I remember my father trying to do this as he prepared for a business trip from Southern California to Boston — each night trying to go to sleep one hour earlier and wake up one hour earlier until he was on Boston time for a few days before the trip.  Might work for a 3-hour time difference, but a 12-hour time difference?
  • Anticipate the time change:  I always set my watch to the new time zone the moment I step on the plane (going half way around the world, I didn’t have to touch my watch!).  Then, on the plane, “act” like you’re in the new time zone.  The experts also say to avoid caffeine and alcohol on the flight, but I stick to my red wine and Advil concoction for falling asleep.
  • When you arrive, stay awake if it’s daytime there, and get into the sunshine.  Exercise, but don’t overdo it.  Take only a short nap (before 2 pm local time and sleep no more than one hour).  Go to sleep and wake up on time, local time — and if you can’t manage sleep, still get out bed on time!

 

 

How did I do with the 12-hour time change twice in two weeks?  I adjusted right away. . . the first night.  Then I was wide awake for the next two nights while in China, before I resorted to the Advil PM.  Arriving home, I was smarter (or more experienced).  Advil PM for the first two nights and I was right back on local time without too much fatigue.  The headaches I’m chalking up to something besides jet lag — a huge tax filing deadline on September 17th.

Read Full Post »

When I was in grade school, I had a social studies project researching (albeit in encyclopedia NOT on the internet) a country and presenting it to the class.  I chose Hong Kong and all these years later, all I remember is that the old airport was right on the water in the middle of the city and it was the place on earth with the highest population density.

Hong Kong has been long used by multinational companies as a regional base to manage their businesses in the Asia Pacific, particularly in the Chinese mainland.  Based on a government survey in Hong Kong in June 2009, there were 3,580 regional operations of overseas companies in Hong Kong, an increase of 44% from the previous decade. Of these regional operations, 83% have operations related to mainland China. Nowadays, Hong Kong also provides an international gateway for mainland companies wishing to explore financing opportunities, within or outside Asia.

There are many reasons for this success, but probably the main reasons are as follows:

  • A stable government dedicated to the encouragement of free enterprise and opposed to regulation or intervention unless deemed absolutely essential.
  • A respected, independent, legal system based on transparent Anglo-Saxon principles.
  • A free press that is widely-owned, independent, and vocal.
  • A good blend of entrepreneurial skills and a stable, talented, adaptable and hard-working labor force.
  • A complete absence of foreign exchange controls and only minor import duties on a small number of items.
  • Very low levels of taxation by international non-tax haven standards.
  • No restrictions on foreign investment.
  • Superb communications and banking facilities.
  • A location at the geographical center of Asia.
  • The willingness of its businesses to diversify according to international market demands and react quickly to changing trends.
  • The complete range of high quality professional services.

Hong Kong is more than just Hong Kong Island and Kowloon.  It is a series of XX islands and since July 1, 1997 is a “Special Administrative Region” within China.  Having only a morning to “see” Hong Kong, I got only the highlights — beginning with Victoria Peak.  The morning was somewhat overcast, so the pictures are hazy and not the brilliant sun and sparkling harbor as in the postcards.

Read Full Post »

I know, I know… now that song will be stuck in your head all day.  It’s a world of laughter, a world of tears, it’s a world of hopes, and a world of fears.  You’re welcome.  From 35,000 feet and 11 hours into a 16-hour flight, the world doesn’t seem all that small.  Granted, when my feet touch ground, I will literally be half-way around the world.  First stop:  Hong Kong.

International business is so frequently done electronically — e-mail, voice mail, video conference, fax (yes, sometimes we still must fax).  Knowing, understanding your client, your colleague and even your competitor, requires face-to-face meetings.  International Business occasionally means International Travel.  Make sure your passport hasn’t expired and you have the right visa to enter the country, if required.  But beyond getting to the airport, preparing for international business means understanding where you are and where you are going on many different levels:  business structuring, laws, foreign currency, cash management, banking regulations, profit repatriation, taxation, transfer pricing, transfer of assets, business customs and etiquette — even geography and so many other topics and issues. 

Though the mountains divide and the oceans are wide, it’s a small world after all. 

In this blog, my colleagues at WithumSmith+Brown and HLB International and I will provide our perspectives gleaned from working internationally — either from one side of a computer screen or video conference, to one side of a conference table on the other side of the world.  Over the next 10 days, I will meet and discuss international business opportunities with fellow HLB tax practitioners, clients and prospective clients in Hong Kong, Taipei, Shenzhen, Jinan and Beijing.  This blog will cover current and former international business trips and presentations, in addition to discussing current international business, accounting and tax issues — with links to more in-depth analyses and treatises.  Once in a while, we’ll challenge your geography skills and will even acquaint you with different business customs and etiquette. 

There’s so much that we share that it’s time we’re aware:  it’s a small world after all.  When we understand our world, when we get to know personally and professionally our international colleagues, contacts and clients, the world truly does become smaller.

Read Full Post »