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Current News

The Conundrum of the Two-Pillar Solution

21 Jun 2022
Uncategorized

The Organization for Economic Co-operation and Development (OECD) Pillar 2 Rules reached a ground-breaking international accord, with over 130 countries that agreed to impose a minimum 15% corporate tax on multinational enterprises (MNEs) with a global turnover of €750 million or more.


The proposed global minimum tax will be implemented as a “top-up” tax to increase the tax burden of MNEs to at least 15% in countries where the MNEs’ tax burden, on a country-by-country basis, is lower than 15%.


Questions have been raised whether the accounting rules in the consolidated financial statements used in Pillar 2 can be reconciled with local generally accepted accounting principles without incurring considerable extra cost and risk. A particular focus is the risk of double taxation when applying the Pillar 2 rules alongside existing regulations.


The OECD’s model rules on Pillar 2 bring together two interlocking measures:
Firstly, the income inclusion rule (IIR): A top-up tax on the ultimate parent entity of a low-taxed foreign subsidiary; and secondly the undertaxed payment rule (UTPR): The UTPR requires a UTPR taxpayer that is a member of an MNE Group to make an adjustment in respect of any top-up tax that is allocated to that taxpayer from a low-tax Constituent Entity of the same group.


The OECD Model Rules suggest the following for the geographical attribution of additional tax revenue.
Firstly, a Qualified Domestic Minimum Top-up Tax (QDMTT) can be levied in an under -taxed country where a subsidiary of MNE is located. Secondly, the domicilium country where ultimate parent company is located, can apply a global minimum tax of 15% through the IIR, and lastly in exceptional circumstances where the global minimum tax is not charged under the IIR, other high-tax countries where the members of MNEs are located, can apply the UTPR.


Very few countries are on track to legislate or implement Pillar 2— similarly with Pillar 1, which aims at reallocating taxing rights to reflect an increasingly digitized global economy. There is a serious risk of tax disputes and double-taxation due to the differences in interpretation, application, and legislative enactments which raises the question if it is feasible to set the date for implementation for 2023. While there may be a temptation to leave preparations until everything is set in stone, this would leave your business with dangerously little time to get ready for what is a major overhaul ahead.


Sources:


https://www.grantthornton.global/en/insights/articles/global-developments-in-international-tax–pillar-2-model-rules/

https://www.tkfd.or.jp/en/research/detail.php?id=884

 

2022 Intellectual Property (CNIPA) regulations: What is New in Regards to the 2019 “New Trademark Act”?

14 Jun 2022
Actual, China, IP
Actual, China, IP, Regulations

 

The China National Intellectual Property Administration (CNIPA) has taken further regulations on trademark usage in China. From 2022 onwards, new rules have been into place that emphasise the detection of fraud and the infringement of laws related to illegal trademark acts in China. This is done to improve the security of private trademarks. The requirements and supervision of using trademarks have become increasingly strict. What do foreign manufacturers need to take into account?

 

The publication of the regulations at the end of December 2021 by the CNIPA aims to strengthen the protection of intellectual property (IP). This publication builds on the trademark laws which are in effect from December 1, 2019. The amendments of the latter relate to the usage of a trademark, claims for damage and opposition to illegal trademark applications. This “new trademark act” focuses on the following three aspects mainly anchored in the Chinese trademark law articles 4, 19 ,33, 63 and 68:

  • Trademarks must be registered and must be proven to not be used previously before registering.
  • Three months after registering the trademark, opposition to this application can be filed at the Chinese Trademark Office.
  • In serious infringements, the statutory damages are RMB 5 million (€711 thousand) and can equal up to five times the actual damage suffered. The counterfeit goods produced under this trademark can get destroyed by the People’s Courts without compensating the counterfeiter. This can only happen at the request of the original trademark.

Whereas these regulations already try to defend the IP of an original trademark or brand, the newly introduced rules improve the security and strictness of intellectual property (IP) in China. The brands themselves need to adhere to around ten new enforcement criteria to further diminish the stealing of IP in China. These regulations are all established according to the Chinese Trademark Law and can be found under the articles 6,10, 43, 49, and 52:

  1. Infringement by (not) using a registered trademark. Chinese Trademark Law acknowledges registered brands in European Trademark Law.
  2. Infringement by signs which may not be used as a trademark.
  3. The term “well-known mark” may not be used in commercial activities
  4. The trademark licensee is not allowed to fail to indicate its name and the origin of the goods
  5. Infringement is where the trademark applicant, in the course of using the registered trademark, changes the registered trademark, name, address or other registered particulars of the applicant on its own initiative.
  6. Infringement by using unregistered trademarks as registered trademarks
  7. Violation of provisions on the registration and administration of collective marks and certification marks, and failure to comply with obligations to administer collective marks and certification marks.
  8. Violation of the provisions for the administration of trademark printing and failure to fulfil the duties of trademark printing administration.
  9. Infringement through malicious application for trade mark registration.
  10. Other infringements of the trade mark administration order

 

Especially interesting for foreign manufacturers are articles 14 and 23 of the new regulation.

  • According to rule 23, using a trademark which is not registered in China but instead is registered somewhere else in the world (e.g. Europe), the owner gets seen as a trademark infringer in China.
  • If an unregistered trademark with multiple meanings is used, this may be considered a breach of the rules (Rule 14). This is the case whenever the Chinese public gets the impression that this particular sign cannot be used as a trademark according to Article 10 (6-8).
    • Signs referring to ethnically discriminatory persons.
    • Signs that can make the public misunderstand the product (e.g. quality, place of origin).
    • Signs that go against socialist morals and norms.

 

To conclude, the rules in China are becoming stricter in order to tackle the theft of intellectual property. However, while these rules are good for foreign investors, they still need to be careful to not use a European-registered trademark without registering it in China. Further, the signs and articles can be interpreted differently in a cultural context. We recommend interpreting these in the broadest sense and trying to avoid risk at all costs. Infringement in China can be expensive and troublesome.

 

Sources:

https://www.cnipa.gov.cn/art/2021/12/16/art_75_172237.html

http://www.gov.cn/zhengce/2019-10/22/content_5443183.htm

Einführung in Global Connect Admin BV & Global Connect Consultancy BV Ein kurzer Überblick über Amelkis XBRL.

05 Jun 2022
Actual, Aktuelles, Company Updates, Cross-border, Current news, ESEF, Europe, Germany, IFRS, XBRL

Jetz Anmelden!
Global Connect Admin B.V in partnership with the DNHK are holding a German webinar on 15 June 2022 at 12:00, titled “Einführung in Global Connect Admin BV & Global Connect Consultancy BV Ein kurzer Überblick über Amelkis XBRL. Register on the following link: https://lnkd.in/eSKqWcQg #webinar #xbrl #german #globalconnectadmin #globalconnectconsultancy #DNHK

Presidents Summit 2022, Northern Europe’s leading Business conference, Copenhagen Denmark. Rethinking Business

05 Jun 2022
Actual, Aktuelles, Current news, Europe, GCA on Tour, IFRS

Through adversity we grow and this year’s summit taught to inspire just that; the tools needed to adapt in this vast – changing world and in every step of the way, to grow and draw strength and purpose from what has happened in the past. 

The PS provided a platform for actionable insights, inspiration and networking with over 2000 meet-ups held per day at the 2021 Summit. Global Connect Consultancy B.V., together with Global Connect Admin B.V.  again this year enriched their professional know-how and built on its vast & steadfast network!

It is the ability to find harmony in the noise and to know there is a safety net when we err. According to Itay Talgam this can be achieved by our ability to recognize and explore gaps, our decision to interpret the plans we create. This speaker is an orchestral conductor who teaches leadership by looking at examples of world leading maestros. In his book The ignorant Maestro Talgam explains that sometimes the best way to stimulate and let people develop their full potential under your direction is to be ignorant. Leaders do not have to be the one who knows everything, but the one who helps his leaders to develop their full potential and to coordinate the team so that those energies flow in a common sense, as happens in a well-assembled orchestra. He teaches his audience not to mind the gaps but to use them.

Other experts on the stage included Daniel Pink, expert on human behavior who aims to teach businesses that regret is both healthy and universal and an integral part of human life. Regret is not abnormal or dangerous, it clarifies what we value and teaches us to be better if we can learn from it.

Dr. Frederik Pferdt, CIE of Google teaches around the central idea that “it’s important to create an environment where everyone is allowed to bring in opinions”. His teachings focus on human mindset and how it channels our inner attitude towards every external event and how to reprogram our negativity bias and start inventing a better future, today.

Noteworthy insights from Linda Hill included inter alia that “most innovations arise from the collision of different ideas, perspectives, and ways of processing emotions”. Organizations are increasingly faced with pressure to innovate, but lack the tools to fuel, inspire and sustain that innovation. In summary the professor teaches her audience to reduce their should’ve and could’ve; be collaborative-ready; develop your successors and paying attention to both scale and speed.

We would like to thank our hosts at this years’ President’s Summit for the outstanding event that was had! Your hospitality is remarkable and the teachings are what we will draw from in the coming year. Thank you!

Join the leaders of future, the investors of tomorrow, and the founders of TODAY! Join Global Connect Consultancy B.V., your trusted partner in financial reporting – today, tomorrow and into the future. Our professional global team will ensure that you regain control of your financial data, allowing you to focus on your core business.

 

EFRAG launches draft Sustainability Report Standards

22 May 2022
Actual, EFRAG, ESEF, IFRS, Sustainability
EFRAG, Global Connect Admin, Global Connect Consultancy

 

The European Financial Reporting Advisory Group (EFRAG) has released exposure drafts (ED) of the European Sustainability Reporting Standards (ESRSs). With this proposal, requirements are set out for European companies to report on various environmental, social and governance (ESG) topics including societal impacts, risks and opportunities.

The European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of the EU Sustainability Reporting Standards (ESRS). Regarding the latter, EFRAG was requested to assist the European Commission in establishing Sustainability Reporting Standards.

EFRAG, as a technical advisor, aims at providing relevant stakeholder information and analyses on sustainability and ESG subjects to the European Commission. This is done to inform the manner of ESRS adoption by the EU. EFRAG decided to launch the public consultation based on the exposure drafts created under the responsibility of the Project Task Force (PTF-ESRS).

A consultation period of 100 days has been launched with the deadline of 8 August 2022 wherein companies can comment on the draft and share relevant information. Incorporating the input and result from the public consultation together with the feedback on the exposure drafts, EFRAG will agree on the final set of draft ESRS to be submitted to the European Commission.

After further evaluations, the finalised version of the ESRS applies the new sustainability standards according to the disclosures made under the EU’s Corporate Sustainability Reporting Directive (CSRD). Bridging finance and sustainability, the ESRS promise to expand mandatory sustainability reporting to European companies as the ongoing drafts are a “journey towards a faithful representation of sustainability performance”.

EFRAG invites comments on all aspects of the draft ESRS and expects feedback no later than 8 August 2022.

LUNA Cryptocurrency Collapse: Is The End Near?

14 May 2022
Actual, Cryptocurrency, Investment
cryptocurrency, Investment, LUNA, Meltdown

The downfall of LUNA shook the crypto world. With most cryptocurrencies plunging more than 50%, billions of dollars have gone into thin air. Fear and uncertainty have taken the place of confidence as noticeable in the investment behaviour in the cryptocurrency market. How could this meltdown happen and what are the consequences?

 

LUNA

The cryptocurrency LUNA is associated with TerraUSD (UST). UST is a stablecoin which entails that there is an algorithmic $1 peg governed by underlying code. UST is inherently different from the other stablecoins like Tether and USD which are both backed by real-world assets such as bonds. UST has no real-world assets are merely relies on the algorithm. To maintain the $1 peg, the UST algorithm stabilises to create and burn tokens of both UST and the linked crypto LUNA. However, due to the extreme market volatility, UST has been unable to maintain the peg and dropped to 12 cents according to data from CoinGecko. Further, the Terra blockchain, which is the operating chain for UST and LUNA, had problems processing transactions twice in less than 24 hours.

Due to the inability to maintain the peg, LUNA plunged to $0 from more than $100 in the last months. This decline in price in UST – and therefore LUNA- has resulted in a meltdown in the crypto market. Even while the collapse of UST only lasted for several hours to regain the $1 peg, billions of dollars in value have been erased and the largest cryptocurrency bitcoin dropped 15% for the week, a level not seen since late 2020.

LUNA price (USD) in the last 7 days. Derived from https://coinmarketcap.com/currencies/terra-luna/

 

Compensation                                      

Bitvavo, a big trading platform, compensates investors after this disaster. The prices are equal to the prices of the pause on 13-05-2022 at 8:20. This pause was needed to create a plan to further stop the devaluation of the stable coin. Binance, the world’s largest crypto exchange temporarily delisted UST and LUNA but reversed this decision after Terra announced resuming new verifications on the blockchain and halting direct transfers.

Fear

The LUNA / UST situation resulted in panic and insecurity in the crypto market. In combination with the higher inflation and interest rates that have caused a sell-off in the global stock market, the cryptocurrency market seems to be related to the stock markets and manifests in a loss of more than 50% value in most cryptocurrencies. The growing fear and growing levels of inflation decrease the trust and investment in the crypto market. According to Vijiay Ayyar, the vice president of corporate development and international at crypto exchange Luno, in the crypto market “it’s normal to see bounces amounting to 10-30%”.” While “these are normally bear market bounces, testing previous support levels as resistance”, even the largest of cryptocurrencies such as bitcoin may not be sustainable or be able to bounce back. As  To long-term feasibility of cryptocurrency needs to be further explored – focussing on the environmental impact of the mining of these coins.

 

Conclusion

Cryptocurrencies as investments bring the known risks of (heavy) value fluctuation. However, as seen in the LUNA case study, the value of your assets can rapidly drop to a point of no return. KSI, a well-known Youtube, lost $2.8 million in his LUNA investment making his coins virtually worthless.

For more information about personal advice regarding international business advice, tax situations or consolidation, Global Connect Admin B.V. can assist you with these challenges due to the rich experience and framework of connections.

4 trends your business should pay attention to in 2022

17 Mar 2022
Current news, Europe
business trends 2022

4 trends your business should pay attention to in 2022

business trends 2022

Every year, companies have to deal with predictions and challenges regarding global business. One of the well-known elephants in the room is the pandemic, affecting all companies. Next to the virus, other national and international trends keep organizations busy. How can your company respond to current global events? What type of strategies should you carry out to strengthen your brand and market position? We take a closer look into four business trends in 2022 – Data security, e-commerce, hybrid working and sustainability – and share insights on what your company could carry out for the near future.

1. Data security – Often overlooked, but crucial for your brand image and consumer trust

Consumer trust will make or break your brand image, especially how your company ensures data security. When people think of data security, they will most likely think of protecting data against risks, preventing data loss, and ensuring that data will not be misused or fall into unauthorized hands. Your company website should consist of a legal notice regarding your cookies and how your company protects the data of customers and website visitors. However, many companies tend to overlook the importance of detailed measures against data theft. In recent years, cybersecurity risks have been escalating globally. The question “How do I prevent hacking and data breaches?” turned into “When will data breaches happen?”

 

What can you do when cybersecurity risk prevention is impossible? The answer to that is to ensure that your company is well-prepared to take the necessary actions when it happens. Think of how you will bring the news to the outside world and what resources you have to limit the damages and solve the issue as effectively as possible. If companies want to be well-prepared for data challenges, investments in data security are the norm.

cyber risk

Global Connect Admin heavily invests in data security. Our customers are international companies, as well as private equity families. To ensure that their data is protected to the best of our ability, we secure the highest level of data protection. If you have any questions regarding how we do this, or if you are looking for professionals that can take care of your cybersecurity risks, do not hesitate to reach out to us.

2. E-commerce – Booming, however…

With the high level of convenience for customers, whether B2B or B2C, it is no surprise that e-commerce is booming. Global sales rose to 16.4% during the pandemic and continued to grow further. E-marketers predict that 22% of the global retail sales will increase to 22% by 2023. While e-commerce is booming, e-commerce companies will take a hit due to the economic barriers against Russia. Companies either choose or are forced to discontinue business with Russia, and freight costs will further increase with the rising oil and gas prices and limitations of no-fly zones.

 

E-commerce companies now have to choose alternatives to limit shipping costs and rising prices. For example, many companies tend to move production to Europe instead of Asia or choose green options regarding freight. Your company must communicate with your consumers at moments like this. Tell them what your 2022 actions are and what these mean for the consumer’s wallet and shipping. The good news is that your company is not the only one affected by global issues. The bad news is that if you do not take any action regarding current international events, the competition will eat you.

e-commerce

Have you thought of your short and long-term company strategies? Global Connect Admin assists international companies worldwide and has experience with various industries. If you are looking for distribution centers or would like international tax and VAT professional assistance, please get in touch with us. We would gladly help you with finding the best solutions.

3. Hybrid working – The new future

Remote and hybrid working is nothing new, but it is no secret that the global pandemic sped up the process of moving away from the office as a workplace. Compared to 2015, almost every company can now call itself (somewhat) experienced in hybrid working. While the pandemic heavily affected the global economy, it also proved that employees do not need constant supervision to perform well and be productive.

 

The main challenge with hybrid working is communication. What works for team A might not work for team B. How do you ensure that employees feel engaged and communicate well with each other, whether there is a lockdown or not? One solution is to establish clear ground rules regarding the workplace.

hybrid working

Since 2015, Global Connect Admin has experience in remote and hybrid working. To create the best hybrid workplace plan for your employees and your company, you need to analyze productivity and employee benefits. Many companies also tend to overlook what is possible in the legal aspect: Can employees work from any place they want to, or will your company experience insurance issues? If you have any questions regarding hybrid working, you can always reach out to us for tips and tricks.

4. Sustainability – Consumers find it essential, but do companies think the same?

Consumers went from requesting companies invest in sustainability to demanding it. The sustainability trend means that no matter the size of your company, you need to innovate your products and services for the greater good. More companies are now investing in green energy and sustainability projects. Meanwhile, international tax authorities are now also demanding sustainability reporting.

 

Recent years show that many international companies are already taking some actions regarding sustainability. For example, they switch diesel company cars to electric ones and invest in hydrogen projects. Meanwhile, the scarcity of Russian oil and gas further forces governments, companies and households to invest in different – more green – energy sources and solutions.

 

Sustainability goes further than thinking about how your company can impact the carbon footprint: you must now also think of society as a whole. If you only focus on, for example, your innovative products and services, you are only telling half of the story. Actions speak louder than words, so ensure to listen to your shareholders and customers and then implement the proper steps they want to see.

sustainability

Global Connect Admin has experience in sustainability reporting regarding international groups. We assist companies with, for example, XBRL reporting. With XBRL software, EU-listed companies can effectively link their data to sustainability information (such as the ESEF taxonomy). Our employees are highly experienced in consolidated annual reporting and will gladly assist you and your team.

Conclusion

Whether global trends enhance or challenge your business, you have to take action for the short and long-term. Even small-sized companies that are only locally active are affected by international developments. The real question is, what can your company do to act accordingly? Your answer depends on which industries your company is active in and what type of products and services you offer. However, one thing is for sure: You need the right tools, expertise and resources to ensure that your business continues to prosper. Take the right actions and communicate accordingly, and you will come a long way.

Sources

Modern Shipper – The World Bank – BusinessToday – The World Financial Review

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Recent Posts

  • The Conundrum of the Two-Pillar Solution

    June 21, 2022
  • 2022 Intellectual Property (CNIPA) regulations: What is New in Regards to the 2019 “New Trademark Act”?

    June 14, 2022
  • Einführung in Global Connect Admin BV & Global Connect Consultancy BV Ein kurzer Überblick über Amelkis XBRL.

    June 5, 2022
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