Template-Type: ReDIF-Article 1.0 Author-Name: Jana Skálová Title: Short Thought over Tax Issues Abstract: Dear readers, at the close of 2011 I would like to spare a moment of thought over tax issues which have come up during the year. The Czech Ministry of Finance has continued with the preparation of a single collection point, an intention which has been the subject of several years of acclaim and preparation. The aim of a single collection point is to unify the collection of taxes, social and health insurance to a single form, to a single authority. These intentions can adequately be termed using the word “tax reform”. They are certainly attractive from the taxpayer’s point of view (administration would decrease), but less so for numerous state officials. The result of these preparations was the presentation of the proposal of the Act to the House of Parliament, where it was shown to be incomplete, ill-conceived and impracticable. Thus the tax reform has been postponed to 2014 for the purposes of better preparation. Across the border, the situation (as far as tax reforms are concerned) is not much better. In October 2011, Milan Chovan (the President of the Slovak Chamber of Tax Advisors) informed his Czech colleagues at the annual general meeting that Slovakia is preparing a major tax reform, the intention of which is (among others) the implementation of super gross salary in the Slovak Republic. Apparently, the Czech model had gained such favor among them that they were inspired by it and would like to implement it in the Slovak Republic. Roughly a month later, the Slovak government fell and all intentions connected with tax reforms were indefinitely shelved. Let me one more remark in connection with super gross salary. Its abolition is among the intentions of the Ministry of Finance, as presented in the Czech tax reform. In the area of taxation of physical entities - employers, however, we would not return to the state of affairs before its implementation (when insurance paid by the employer was deducted when calculating the tax base) but rather the tax base under the new concept would be comprised of gross salary minus non-taxable items. Thus we have yet another new model of taxation. The only people pleased by this novelty will be software companies (who will be the ones changing software for the calculation of salaries) and education agencies. The Commission has presented a proposal for a financial transaction tax in the 27 Member States of the European Union. The tax would be levied on all transactions on financial instruments between financial institutions when at least one party of the transaction is located in the EU. The exchange of shares and bonds would be taxed at a rate of 0.1% and derivative contracts at a rate of 0.01%. The Commission has proposed that the tax should come into effect from 1st January 2014. The revenues of the tax would be shared between the EU and the Member States. Part of the tax would be used as an EU own resource which would partly reduce national contributions. Member States might decide to increase the part of the revenues by taxing financial transactions at a higher rate. Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: “With this proposal the European Union becomes a forerunner in the global implementation of a financial transaction tax. Our project is sound and workable. I have no doubt this tax can deliver what EU citizens expect; a fair contribution from the financial sector. I am confident that our partners in the G20 will see their interest in following this path.”1 The financial transaction tax aims at taxing the 85% of financial transactions that take place between financial institutions. Citizens and businesses would not be taxed. House mortgages, bank loans, insurance contracts and other normal financial activities carried out by individuals or small businesses fall outside the scope of the proposal. The decision followed an analysis of different tax instruments to make the financial sector contribute to the recovery of the EU economy. In parallel, the Commission has explored ways to introduce a financial transaction tax at global level since 2009 with its international partners in the G20. A further activity of the European Commission aims towards the harmonization of direct taxes. In 2011, a proposal for a directive on a common consolidated corporate tax was presented. After several years’ of discussion, material which would enable the implementation of a single, voluntary system of taxing legal entities was compiled. This would entail replacing 27 tax systems with a single one, but the introduction of a 28th multi-national system for the taxation of income tax. Europe drew inspiration from USA and Canada. This theme is highly acute. Dear readers, allow me in closing to wish you pleasant times during the festive season and all the best health and wishes for the New Year. Pages: 4-6 Volume: 2011 Issue: 4 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=16.pdf File-URL: http://www.vse.cz/efaj/16 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:16:p:4-6 Template-Type: ReDIF-Article 1.0 Author-Name: Karel Janda Author-Name: Gordon Rausser Title: Comparing American and European Regulation of Over-the- Counter Derivative Securities Abstract: This paper describes the major issues in the clearing of over-the-counter (OTC) derivatives and the current regulative initiatives aimed at removing the market opaqueness. The core of the paper is the comparison of the US Dodd-Frank Wall Street Reform and Consumer Protection Act and the European Market Infrastructure Regulation (EMIR). The similarities and the major differences of these two regulative approaches are emphasized. The major similarities between EMIR and the Dodd-Frank Act relate to the mandatory clearing for standardized contracts, the scope of the derivatives covered, the exemptions from clearing for end-users and the reporting of cleared and uncleared derivative transactions by nearly all financial counterparties. The major differences arise with the restrictions on bank proprietary trading, with separation of derivative trading activities from commercial banking activities, with central counterparties (CCP) ownership rules and with the establishment of mandatory exchange trading requirement. Keywords: Regulation, OTC Derivatives, Centralized Clearing, EMIR, Dodd-Frank Classification-JEL: G01, G28 Pages: 7-19 Volume: 2011 Issue: 4 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=17.pdf File-URL: http://www.vse.cz/efaj/17 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:17:p:7-19 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/17 Template-Type: ReDIF-Article 1.0 Author-Name: Jiří Witzany Title: Exposure at Default Modeling with Default Intensities Abstract: The paper provides an overview of the Exposure at Default (EAD) definition, requirements, and estimation methods as set by the Basel II regulation. A new methodology connected to the intensity of default modeling is proposed. The numerical examples show that various estimation techniques may lead to quite different results with intensity of default based model being recommended as the most faithful with respect to a precise probabilistic definition of the EAD parameter. Keywords: Credit risk, Regulatory capital, Exposure at default, Default intensity Classification-JEL: C14, G21, G28 Pages: 20-48 Volume: 2011 Issue: 4 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=18.pdf File-URL: http://www.vse.cz/efaj/18 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:18:p:20-48 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/18 Template-Type: ReDIF-Article 1.0 Author-Name: Tomáš Buus Title: Sharing Cost of Shared Services Centre Abstract: In the presented paper we develop model of apportionment of cost generated by variability and mean value of flows from (to) shared services centre. It can be either cash pool or distribution centre, or even some kind of customer service centre. The apportionment formula for the cost of capacity generated by flow variability turns out to be regression coefficient of flow to (from) the distribution centre (cash pool) generated by particular company within the multibusiness enterprise as endogenous variable to flow of inventory (cash) for the whole distribution centre (cash pool) as exogenous variable. The cost generated by the flow of requirements (goods, money) itself, i.e. by the mean value of the flow, has to be split between SSC customers according to their share on that flow. Result does not depend on the form of cost function as long as it is strictly increasing function of flow from (into) SSC (orders, stock, cash) and of mean of that flow. Keywords: Distribution centre, Cash Pool, Capacity, Cost Attribution Classification-JEL: C61, G39, M21 Pages: 49-59 Volume: 2011 Issue: 4 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=19.pdf File-URL: http://www.vse.cz/efaj/19 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:19:p:49-59 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/19 Template-Type: ReDIF-Article 1.0 Author-Name: Leoš Vítek Title: Fiscal Instruments of a Support of the Families with Children and their Changes in Developed Countries Abstract: Governments usually try to use fiscal instruments to support the families with children. However, fiscal instruments also affect the work effort and labour demand. Problems associated with (de)stimulantive effects of taxes, insurance premia and benefits arise, among other things, also due to the fact that because of various reasons, these instruments are not effectively coordinated and often operate in opposite directions. The article analyses changes in fiscal instruments of a support of the families with children in developed countries over the past decade and focuses on the development of selected tax-benefit indicators that describe the fundamental characteristics of the taxation of the families with children. Given that the universal, family-type social benefits often take the form of negative taxes, the paper includes also this type of family benefits. The results of the analysis show that the vast majority of developed countries strongly support the families with children via fiscal instruments. It also turns out that over the past decade the governments have rather reduced effective taxation of the families with children. During the last two years, however, some countries recorded an increase in the taxation of families, including the families with children. Countries that have over the past ten years successfully sought to support the families with children relied on progressive reliefs or benefits targeted at the families with more than two children. Keywords: Support of the families with children, Taxes, Family benefits Classification-JEL: E24, H24, J32 Pages: 60-84 Volume: 2011 Issue: 4 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=20.pdf File-URL: http://www.vse.cz/efaj/20 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:20:p:60-84 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/20 Template-Type: ReDIF-Article 1.0 Author-Name: David Procházka Author-Name: Cristina Procházková Ilinitchi Title: The Theoretical Relationships among Foreign Direct Investments, Migration and IFRS Adoption Abstract: The globalization of the world economy is accompanied by changes in volume and structure of international trade, capital flows and human migration. The paper focuses on theoretical aspects of recent changes in the area of international harmonization of accounting through the adoption of the International Financial Reporting Standards (IFRS), migration and foreign direct investments with the emphasis on their mutual interdependencies. Keywords: Foreign direct investments, Migration, IFRS adoption, Brain drain/gain Classification-JEL: F21, F22, J61, M41 Pages: 85-100 Volume: 2011 Issue: 4 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=21.pdf File-URL: http://www.vse.cz/efaj/21 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:21:p:85-100 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/21