KPMG and others have already beaten you to this.

Thank you for your opinion, but let me clarify my intention. I want to unite small companies by one group name, meanwile they remain seperate legal entities, safe its name but just will represent itself as a part of a group. It can not be money loundering as I do not propose to share you income with me, you will not pay me a penny. The main idea is that if you are a part of international group it is much easier to find new clients. Of course big 4 are leading international companies but do you really think everyone one can afford them. But anyway, thank you for dialogua.

Firstly person declare its income in one country, received certificate from tax authority which confirme the amount of income he received and taxes paid and than files personale income tax declaration in another country were shows that from income received in, say UK, hi paid taxes in UK and to avoid double taxation hi can offsett that amount in Ukraine. It is not laundering, it is how its work. I did the same while working for my previous employer.

I have stated only one example (but there are dozens of other servise we can share between each other). Re. tax return we had following procedure: one client get income in both Ukraine and Russia. He contacts our Ukrainian office so we conclude service agreement between him and our office in Ukraine. Than he provides us with all information needed for submitting his return in both countries. Our Russian office file the report and provide us with the sertificate from russian tax authority, we submit return for income received in Ukraine. Than client pays to Ukrainian office and Russian office invoices us so we can paid for their piece of work. How do I see the structure? I have just idea in my head. I will recomend thar future members and my company will conduct an agreement, where I give you the right to use my company's name (which would be the global name of our group). For first, say 20 members, there will not be any fee (or just symbolic payment of USD 10, as under Ukrainian legislation we can not provide services for free), for the rest companies it would cost slightly more. Membership fee is not a main idea, we will benefit from using the same group name all over the world and be more recognizable. How to choose the partner? We will grant membership only to one company from one country (or mayby two from different cities if they are not competitors) so there be no competitiveness between the members.

No, Russian office not just file the report, they prepare it. In this example client pays, say EUR 1400, to Ukrainian office and the n Ukrainian office pays EUR 700 to Russian collegues. Both companies have income

He can, but it is more suitable for him (and I assume foe everyone) to deal with one company rather then sign 2 seperate agreements, pay to 2 seperate legal entitie.

You are missing out here that a copy of a document filed in Russia is insufficient evidence. Unless you are a single company such as a big four firm then the document provided must come directly from the Russian government, not a copy via your representative in that country.

So, Russian firm tells you that their part is complete. You then write to the Russian Government requesting written confirmation before you can file your return.

Company also needs to file in the UK so the UK firm must contact the Russian government department and the Ukrainian government departments requesting that each confirm the filing details. The more countries involved, the more duplicated confirmations will be required... How long do you think that all of this will take (if in fact the Governments concerned acknowedge the requests at all!)?.

At the end of the day, any business that is large enough to have global presence is large enough to pay the fee's of the likes of KPMG who have tax lawyers on payroll able to negotiate with the highest levels of tax authorities in any country where they have presence.

People go to the big four because the tax authorities fear fighting them.

The only reason that I can see that a company or individual would not seek out the services of a firm able to properly represent them to the tax authorities globally is if that potential client is doing something that they fear being discovered so are seeking to work with those less able to investigate clients in different countries properly.

This idea may have worked in a world pre 9/11 but I do not think that it is an idea that you should pursue now. Maybe instead see if you can use your knowledge in this area to get a position with KPMG Ukraine who have offices in Kyiv and Lviv.

I worked with KPMG for over seven years and they are a very, very good firm that I would reccomend to anyone.

Re. Tax return: Russian office provide original of the certificate from tax authority varified by apostill. So Ukrainian Tax Authority has enough evidences together with return. Offcource we can show in return only those information that clients provide to us, we are not investigating whether they have offsoure accounts. Re. The idea. I do know how it is in UK, but for east europien countries such model are working.

I do not know, there is a provision in our agreement that we, as a company do not responsible for the fullness of information in returns, we take fee for filling in the report but it is only a client how is responsible for not disclosure of all source of income. We, as a consulting company, just help him with preparation the return and dealing with tax authority.

So your arguement is that it is not your responsibility if you are legitimising criminal activities by not properly investigating your clients sources of income as you are only doing the paperwork.

That would probably explaine the US State departments report on the Ukraine :

Although Ukraine is not a regional banking or financial center, and despite several international banks pulling out of the country, it does have close ties with European banking networks. Illicit proceeds are primarily generated through corruption; fraud; trafficking in drugs, arms, and persons; organized crime; prostitution; cybercrime; and tax evasion. Money launderers use various methodologies, including real estate, insurance, bulk cash smuggling, financial institutions, and shell companies. Few Ukrainian businesses are owned transparently. The British Virgin Islands, Cyprus, and other offshore tax havens are often used to obscure ownership, evade taxes, or mask illicit profits.

Ukraines large shadow economy represents a significant money laundering vulnerability. Conducted in cash with little records or oversight, transactions in the grey economy make it relatively easy to launder money in Ukraine and deprive the government of tax revenue. The use of the informal economy is linked to evasion of taxes and customs duties. Many Ukrainians work abroad and send remittances back to Ukraine via transfers or international payment systems; these remittances amounted to approximately $2.2 billion in the first six months of 2015. Of this total, $311 million arrived via informal channels. Additionally, there is a significant market for smuggled goods in Ukraine.

Endemic corruption in Ukraine is an additional factor that worsens the problem of money laundering. Furthermore, transnational organized crime syndicates utilize Ukraine as a transit country to lauder their illicit profits to a third country. In the course of investigations conducted between March 2014 and September 2015, the State Financial Monitoring Service (FMS), Ukraines financial intelligence unit, froze the equivalent of $1.52 billion of funds reportedly related to large-scale corruption activities of the former government.

 

I posted that before I saw your latest responses as I was stuck on the phone whilst trying to post!   

-- Edited by Cheshire on Tuesday 12th of April 2016 12:19:05 PM

-- Edited by Cheshire on Tuesday 12th of April 2016 12:22:32 PM

For completeness, and showing why the UK is attractive to money launderers here is the same report for the UK

The United Kingdom plays a leading role in European and world finance and remains attractive to money launderers because of the size, sophistication, and reputation of its financial markets. Although narcotics are still a major source of illegal proceeds for money laundering, the proceeds of other offenses, such as financial fraud and the smuggling of people and goods, have become increasingly important. The past few years have seen an increase in the movement of cash via the non-bank financial system as banks and mainstream financial institutions have tightened their controls and increased their vigilance. Money exchanges; inbound and outbound cash smugglers; and gatekeepers, such as lawyers and accountants, are used to move and launder criminal proceeds. Also on the rise are credit/debit card fraud, internet fraud, and the purchase of high-value assets to disguise illicit proceeds. There are significant intelligence gaps, in particular in relation to high-end money laundering. This type of laundering is particularly relevant to major frauds and serious foreign corruption, where the proceeds are often held in bank accounts, real estate, or other investments rather than in cash. Underground alternative remittance systems, such as hawala, are also common.

As indicated by Joanne, polar opposits.

And the part in there that is important is that people from elsewhere need UK based lawyers and accountants (and bankers) to legitimse criminal procedings which is of course why we are always watchful that our services are not being misappropriated.

abacus12345 wrote:

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KPMG offer micro business accounting now. Not sure on prices. But yes, sledge hammer to crack a walnut comes to mind.

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 If its an international walnut it needs a sledgehammer.

I can't see why not abroad also, with offices all over the place. (Opinion not fact) I think when the cloud kicks off proper, I wouldn't be surprised in seeing KPMG advertising, aimed at micros becoming more prominent.

Hi Johnny,

You cannot bundle all of Eastern Europe in the same skip though.

I've done consultancy work in Slovenia and on a scale of Denmark to Burma I would put Slovenia more as an equivalent of a Western state such as Belgium than an Eastern one like Albania.

abacus12345 wrote:

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I think when the cloud kicks off proper, I wouldn't be surprised in seeing KPMG advertising, aimed at micros becoming more prominent.

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You and that Cloud Johnny. lol. 

I'm actually seeing you're avatar saying the words "come the glorious day brothers all desktop users will be shot".

Here is the current pricing structure : https://kpmgsmallbusiness.co.uk/pricing

Considering what they bring to the table surely our only weapon is the personal service that we provide so tell me, if we move all of our clients onto the cloud and never see them, why would they use us?

Now, why didn't I use that arguement in your cloudy thread.