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Events > IFA Ukraine > Czech and Slovak Jurisdictions Discussed at IFA Ukraine Seminar

Czech and Slovak Jurisdictions Discussed at IFA Ukraine Seminar

04 june, 2015, Kyiv, Ukraine

The Seminar program dealt with overview of Czech and Slovak companies as special purpose vehicles for international tax planning and asset protection, as well as with insights on Ukrainian aspects of tax structuring through Czech Republic and Slovakia.

When opening the Seminar, IFA Ukraine President Olena Voznyuk denoted the growing interest of Ukrainian companies to Czech and Slovak jurisdictions, as well as their need to have hands-on understanding of what it takes to establish and maintain companies in Czech Republic and Slovakia.

The Seminar panel was joined by Tomas Chrobak, PROTTECO (Czech Republic/Sovakia), Lucas Randa, AKONT TRUST (Czech Republic/Slovakia), Oksana Kneychuk, AstapovLawyers, Natalia Ulyanova and Oleh Derliuk, ICF Legal Service.

Tomas Chrobak and Lucas Randa provided a detail overview of Czech and Slovak corporate regimes and relevant tax benefits.

When discussing Czech and Slovak companies within international tax planning structures, speakers focused on few exemplary options, such as holding structure with a Slovak "super-parent", Slovak holding company with a silent partner, Czech / Slovak trading agent company, Czech joint-stock company (or SE company) with anonymous shareholders for asset protection, and Czechoslovak "sandwich", which is a combination of the tax benefits of the Czech company (participation exemption) and the Slovak company (exemption of outgoing dividends).

Speaking on EU Anti-Money Laundering legislation / GATCA implementation in the Czech Republic and Slovakia, in particular on Third EU AML Directive (2005/60/EC) and recently passed in EU Parlament Fourth EU AML Directive, Tomas Chrobak noted that Czech and Slovak tax authorities and banks slowly implement AML legislation requirements into practice, and follow rather formalistic approach, concentrating on directors and shareholders rather than on beneficial owners (the concept of nominees is not generally well known).

As for the impact of AML legislation / GATCA on Ukrainian clients, Tomas noted that EU AML legislation does not relate to Ukraine directly, however affects all clients with EU-registered companies in their corporate structures, and its implementation can be seen in most of the countries with much tougher DD procedures in Cyprus, UK, the Netherlands, Malta etc.

Tomas Chrobak has also presented his view on future trends of international tax planning and asset protection, such as twilight of simple "paper sellers", i.e. corporate providers with no added value; asset protection solutions without hiding the ownership; transfer of effective management abroad; use of trusts and foundations with flexible internal structure; shared agent companies, etc.

Oksana Kneychuk in her presentation "Holding structures with Czech Republic and Slovakia: tax and legal implications for Ukrainian companies" explained why Ukrainian businesses try to find out some other options for tax balance and protection of their investments, pointing out also to Cyprus structure risks and high costs of Dutch structures. Oksana presented her view of pros and cons of shifting to Czech Republic and Slovakia, denoting that advantages of the indicated jurisdictions (e.g. favorable local taxation of dividends distribution in Slovakia and favorable WHT rates under DTT with Ukraine in Czech Republic) can be successfully enjoyed provided that disadvantages (e.g. high capital gains tax rate in Slovakia etc.) are eliminated due to proper structuring.

Natalya Ulyanova and Oleh Derliuk discussed criteria of an effective trading vehicle, and compared Czech and Slovak companies with their closest competitors on the market - Austrian companies and companies registered in the United Kingdom. In the final outcome, Czech and Slovak jurisdictions appeared to be quite attractive from the point of tax and cost efficiency, anonymity of ownership, and Transfer Pricing legal risks.

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