Tag Archives: year

Chinese New Year in China / Shanghai

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The Chinese New Year in China – The Year of the Horse, 2014 has arrived here in Shanghai.

Regarding the strategies in this most powerful zodiac people might re-think the following sentence by Confucius, living in the ancient China from 551 to 479 B.C.; he said: If you know your goal, you can decide and find a peaceful life in safety. Being safe you may then think about how to improve it.

However, the alternatives are already driven by a strong growth of the Chinese economy in a bandwidth of 7 to 13 percent. Compared to other economies located in the Blue Banana Zone or in the Americas, this is salient.

Unique and outstanding reports from the East Asian economies with higher growth rates compared to those in Central Europe or in the Americas, tumbling between zero and one percent in 2013, describe best the new mega-trends towards the Far East. Furthermore, based on the facts of skills shortage or poor management of public budgeting in European countries, this can be seen now as their bill.

Let us hope that the necessary lessons will be learnt well and quickly in order to catch up with East Asian economies. These countries also have to adopt to new standards immediately, due to the reported smog reports, CCTV broadcasts in China 24 about those mega cities with heavy pollution by a steadily increasing traffic and the usage of coal for heating like: the capital Beijing, Guangzhou, Shanghai and Shenzhen or the Special Administrative Region of Hong Kong.

Update 09.02.2014 Beijing time / Shanghai 15:12

Taxi to a dark side?

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Receiving a newsletter from a tax auditor, I was wondering how, and thus respectively why VIP might be under pressure to avoid paying income taxes in countries with high income tax ratios (here: countries in Central EU).

Starting from the provided sum of in total 6 million € – owed corportate taxes plus on top interest – I created an Excel scenario: let us start in year 2006 and end in 2013 (Q1). We push the stock market with risky investments and see us as a winner until year end 2011. Investments indirectly from Switzerland in Central Europe seemed to be more serious than puts and calls from Greece or Russia. In year 2006 we can create profits similar to 562 K€ corporate taxes to pay to … nobody. Correct? Not at all!

We calculate consequently that these data are hidden until year end 2012.

This was a professional error from the very beginning made by a VIP.

With the threat of a punishment in 2013 the results decreases the profitability: on top of all the taxes plus 6 per cent interest for each year undeclared revenues, these amounts add up to 334 K€ already for year 1.

In the following years the simulation estimates continuously higher corporate taxes – each result grows by +100 K€ – based on original investments, received by loans from private banking sectors: 15 million €.

In year 7 the income situation changes due to losses on the stock market.

This might have been a reason to re-think investments: why not withdraw it?

Thus the total income taxes – including personal income taxes – end up at round about 900 K€ EUR. Comparing to the initial income to declare this would be then a loss of round about 240 K€ in year 1.

Finally, at the end of the following decade all the losses together could be exceed more than 50 mio. €.

Summary

The speculation with private banks’ loans seldom works out for an investor.

Do not forget: a dramatic loss of your public image could lead you directly into prison for 10 years, too. The private banking sector risks as well its good reputation on former well developed consumer markets. Think, re-think!

As a result, such unsafe trips – here illegal speculation and hidden revenues, represent then a most likely free-of-charge Taxi to a dark side?!

But how can the investment rise from €15 mio. up to 50 mio. Euros?

How about the logistics? Do you need to use a truck for such special goods?