Tax risks when starting business in a foreign country

Tax risks when starting business abroad

PwC's Academy workshops

PwC's Academy has launched a series of workshops delivered by guest speakers on tax risks when starting business abroad.  Two workshops were run in November, one covering tax risks in Russia and the other dealing with Germany.

On 26 November, PwC's Academy ran the workshop ‘Tax risks when starting business in Russia’.  Our guest speaker was Nikolay Minin, a tax manager at PwC Moscow, who provided a number of practical examples and situations from his own experience, as he has been with PwC since 2004.  The workshop discussed the Russian tax system in general as well as specific tax aspects of business and employment.  The emphasis was on case studies, in which the speaker described situations, risks involved and solutions found.

Compared to other countries with a developed economy, the Russian tax system is rather new.  It is not subject to review as a whole, but changes are made on a regular basis.  The Russian tax system involves none of the sophisticated concepts that are used in more developed tax systems.

Taxpayers in Russia have difficulties resulting from:

• Burdensome tax administration;
• Stringent requirements for accounting and tax records;
• Result-oriented tax authorities seeking to assess extra taxes on a tax audit;
• Lengthy lawsuits and exorbitant court costs;
• No way of obtaining clarifications from competent authorities; and
• Underdeveloped transfer pricing rules.

This is just a brief look at the information the participants received during the workshop.

This was our second workshop of this kind, providing information on business and tax risks in a particular foreign country.  In early November, Adrian Cloer, a senior manager at PwC Berlin, delivered a workshop on tax risks when starting business in Germany.

We are now inviting suggestions from our subscribers for our next guest workshop.  You are welcome to email your suggestions to pwc.kursi@lv.pwc.com, and we may run a guest workshop dealing with a country that holds interest for you soon.

More information on other PwC seminars and training available on PwC's Academy website.