johannsen · basedow + partner ag

JOHANNSEN · BASEDOW + PARTNER AG

4th

North European Conference

St. Petersburg

May 2008

Kreston 4th North European Conference St. Petersburg

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• Location– we have our offices in the Northern Part

of Germany in– Hamburg (center)– Hamburg Finkenwerder– Schwerin– Rostock


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• locations


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• HamburgGänsemarkt 50


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• Group– Johannsen . Basedow +Partner AG

• Tax consultancy

– Johannsen . Basedow +Partner GmbH• Audit company

– Heuer, Finck & Kollegen• Tax consultancy

– Johannsen . Basedow – Külper + Röhlig GmbH• Tax consultancy


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• Personell– 5 senior-partners– total staff about 35– qualifications

• 1 Wirtschaftsprüfer (cpa)• 8 Steuerberater (tax consultant)• 1 Rechtsanwalt (attorney at law)• qualified personnel with special training


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• language– German– English– Russian


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• Services provided– auditing

• annual statements• consolidated statements• other:

– broker– disposal of packing material– prospectus


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• Services provided (cont.)– accountancy

• bookkeeping• departmental costing• pay roll accounts• preparation of annual financial statements• preparation of consolidated financial

statements


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• Services provided (cont.)– taxation

• for– Individuals– companies and other corporate bodies– non profit organisation

• tax returns• tax consulting and planning• legal remedy at tax court


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• Services provided (cont.)– consulting

• financing and investment advices• merger & acquisition• reorganisation, restructuring• Business planning • real estate• real estate investment trust


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• Kreston – member since 1993– received referrals from

• Austria• Denmark/Sweden• Netherlands• United Kingdom• USA


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• Kreston – our service for Kreston clients

• tax advice• lookkeeping• pay roll accounts• annual audit• preparation of annual accounts• financial planning• merger & acquisition


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• Services for east-european clients– Hamburgische Gesellschaft für

Wirtschaftsförderung mbH, Hamburg– Our assistance

• Establishing of subsidiaries• Establishing of branches• Bookkeeping and tax consultancy• Business plans


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Changes in taxation in Germany

• Corporations 2007– Gewerbesteuer

ca. 20 %deductible

– Körperschaftsteuer + Solidaritätszuschlagca. 26,4 %not deductible

– total tax on profitca. 40% in Hamburg

• Corporations 2008– Gewerbesteuer

ca. 14 %not deductible

– Körperschaftsteuer + Solidaritätszuschlagca. 15,8 %not deductible

– total tax on profitca. 30% in Hamburg


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• shareholder of corporations 2008– Corporations

ca. 5 %– Business individuals

• 50-%-income-method

– Private individuals• 50-%-income-method

• shareholder of corporations 2009– Corporations

ca. 5 %– Business individuals

• 60-%-income-method

– Private individuals• 25-%-withhold-tax• No income related

expenses deductible


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• partnerships 2008– Special taxation for reserved earnings

• No more degressive depreciation• Only straight-line method

• Interest expenses– Exemption limit 1 Mio. €– Deductible are only 30 % of ebita


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Changes in HGB in Germany

• HGB = German Commercial Code – Includes the legal regulations for

accounting and auditing

• draft of the „Bilanzrechtsmodernisierungsgesetz" (German code to bring up to date the accounting law)– eighth EU-guideline (auditors-guideline)


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Changes in HGB in Germany

• Requirements for the license as auditors,• independence,• establishment of ISA as standard for statutory

audits,• quality assurance,• analysis of audit fees and• regulations for corporations wich public

interest


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Independence - § 319 (2)

• German public auditors may not audit financial statements if there are grounds that indicate that their independence may be impaired, in particular– Business relationships– Financial relationships– Personal relationships


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• Specifically, German auditor are excluded from auditing financial statements if they, or a person with whom they jointly practise their profession:– Hold shares or some other more than

merely insignificant financial interest in the corporation to be audited


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• excluded from auditing if they…cont. – Hold an financial interest in a company

• that is affiliated with the corporation to be audited or

• that holds more than 20 % of the shares of the corporation to be audited


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• excluded from auditing if they…cont. – are a legal representative, a member of the

supervisory board or employee • of the corporation to be audited or • of a company

– that is affiliated with the corporation to be audited or – that holds more than 20 % of the shares of the

corporation to be audited


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• excluded from auditing if they…cont. – over or above the audit activities at or for

the corporation to be audited• have been involved in keeping the accounting

records or preparing the annual financial statements to be audited

• have been involved in the performance of internal audit functions in a position of responsibility


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• excluded from auditing if they…cont. – over or above the audit activities … cont.

• have rendered corporate management or financial services,

• have rendered independent actuarial or valuation services that have material bearing on the financial statements to be audited

• this shall also apply if one of these activities is performed by a company in which the auditor is shareholder, employee or legal representative


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• excluded from auditing if they…cont. – employ a person on the audit who may not act as

an auditor in accordance with nos. 1 to 3 above– have in each of the last 5 years generated more

than 30 % of their total income from professional activities

• from the corporation to be audited or • from companies in which the corporation to be audited

holds more than 20 % of the shares• where this is also expected in the current year


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• excluded from auditing if they…cont. – This shall also apply if the spouse or civil

partner satisfies a reason for exclusion under sentence 1 nos. 1,2 or 3 above


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• German public auditing firms may not audit financial statements if – they– one of their legal representatives– a shareholder owning more than 20 %– An affiliated company– a shareholder or another person employed by it

involved in the audit

are excluded under subsections (2) or (3) above


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Independence - § 319a

• In addition to the grounds listed above German public auditors may not audit financial statements of listed companies if – They have in each of the last 5 years generated more than

15 % of their total income from professional activities– In addition to the audit activities they have provided legal or

tax advisory service …– In addition to the audit activities they have been involved in

the development, establishment … of accounting information systems

– They have already signed an auditors report in 7 or more cases


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Independence - § 319b Draft

• an auditor is excluded from auditing financial statements if a member of his network– Fulfils grounds that indicate that their

independence may be impaired, in particular• Business relationships• Financial relationships• Personal relationships

– Hold shares in the corporation to be audited– Is legal representative of the corporationif the member of the network an influence the results

of the audit


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• an auditor is excluded from auditing financial statements if a member of his network

• have been involved in keeping the accounting records or preparing the annual financial statements to be audited

• have been involved in the performance of internal audit functions in a position of responsibility

• have rendered corporate management or financial services,• have rendered independent actuarial or valuation services that

have material bearing on the financial statements to be audited• this shall also apply if one of these activities is performed by a

company in which the member is shareholder, employee or legal representative

always


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• an auditor is excluded from auditing financial statements if a member of his network …– This shall also apply if the spouse or civil partner

of the member satisfies a reason for exclusion under sentence 1 nos. 1,2 or 3 above

– following example: The wife of a Chinese Kreston member owns shares of the client to be audited. As far that woman is not involved in the audit, the corresponding German Kreston partner may exculpate himself and accept that audit engagement.


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• A reason for exclusion as statutory auditor is given as far as a partner of the network has exercised one of the following areas of responsibilities as far as the audit client is concerned:– Accounting,– actuarial services,– legal or tax consultancy (sec. 319a par. 1 no. 2

HGB),– financial services or– implementation of accounting- and IT systems.


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• Legal definition of a Network– There is a network if

• persons act in combination at their professional practice

• in following of common economic interests• for a certain duration


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• criteria of a Network– Sharing of profit or costs– Common property– Common control or management– Use of a common brand– Common quality control system or

proceeding– Use of common professional resources


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• Demand on a Network– Data pool with all the necessary

information about the business activities• the members• the business partners, spouses and civil

partners of the members• Companies of the members

– or a email system with the need of a 100% response rate


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EURAFNE Conference 2008

18th September – 20th September 2008

Steigenberger Hotel, Hamburg, Germany

Hosted by Johannsen · Basedow + Partner AG

johannsen · basedow + partner ag

Documents

deductibletotal tax

tax courtkreston

lawqualified personnel

planninglegal remedy

special trainingkreston