Archive of articles - November 1998, page 4

Multinational firms and transfer pricing

Multinational enterprises have never been slow to exploit differences in the tax rates of the countries in which they do business. Giant corporations that have mutual interests or owners have long manipulated flows of capital between them to ensure that their profits appear on the books of firms doing business in countries with low tax rates.This capital manipulation occurs most typically with 'transfer prices' - the money that branches of a corporation charge themselves for goods and services. But tax authorities have recently developed a very sharp eye for prices used between associated enterprises, and regularly verify that multinationals are not dodging their tax obligations.

Letter From The Publisher : The Slovak Spectator - 100 issues worth of change

Issue 1 of The Slovak Spectator was hand-delivered around town by a 13-year-old girl to the people we knew in March 1995. That's the way it started: young, single people working 'til the small hours to get the news out to fellow English-speakers. And having a ball doing it.To a large extent, that's the way it still is. Of course, we are four years older, many in our ranks are engaged or married, and we don't see the sun rise out our office windows as often as we used to. But the passion is as strong as ever.As arbitrary as it is, this 100th issue of The Slovak Spectator makes us pause and reflect. So much has changed since that inaugural black-and-white issue with the large print rolled off the presses. To begin with, presidents' sons are no longer kidnapped. Then again, there is no longer a president. But the new atmosphere is about more than a new political direction.

Letter to the Editor: Regional restaurants deserve more exposure

Outstanding wages of Martin workers settled

Provisional budget for 1999 approved in Parliament

Short of both time and money, the Slovak government won a temporary reprieve from budget troubles on November 19 when parliament approved both a provisional budget for 1999 and the widening of the 1998 state budget deficit to 19.2 billion Slovak crowns ($548 million).The new cabinet, which was formed only two weeks before the November 15 deadline for submission of the 1999 state budget, has been struggling to deal with unexpectedly low tax revenues."In this situation, there was nothing they could do but implement a provisional budget," said Martin Barto, an analyst for Dutch investment bank ING Barings. Barto stressed that as government and parliamentary bodies had not been formed until late October, cabinet had not been given sufficient time to prepare and have approved a full 1999 state budget.

Capital hosts conference on Euro-issues

The parade of European dignitaries visting Slovakia following parliament elections in September continues. On November 24 and 25, Bratislava will host a conference named "The Possibilities for Bilateral Co-operation in Europe - in Slovakia and Austria."The meet is being organised by the Economic University in Bratislava, the House of Europe in Bratislava and the Vienna-based Institute for the Danube region and Central Europe. Seminars and lectures will be held in the capital's beautiful Primaciálny and Zichy Palaces, as well as at the Austrian Embassy.

Constitutional law on direct presidential elections reaches parliament

Community Grapevine

British Chamber of Commerce is open !Calling all Vikings, Picts and Bravehearts

Direct presidential elections set for 1999

Slovak citizens will be given a chance to elect a president by the beginning of next year, according to the provisions of a law on direct presidential election currently making its way through Parliament."This is what we have promised to our voters," said Privatisation Minister Mária Machová, adding that electing a president would "bring Slovakia quickly to a political level on which we could take other steps for democratic development."Slovakia has not had a president since Michal Kováč's term in office ended on March 2 this year. The president's constitutional functions have since devolved to the premier and speaker of parliament, currently Mikuláš Dzurinda and Jozef Migaš, respectively.

Bučina hits red for 1-3Q 98

I'll Be Right Back

Volkswagen to complete $160 mil. Martin plant by spring '99

A new Volkswagen automotive factory in the northern Slovak town of Martin will begin production in the spring or early summer of 1999, according to an official from the Slovak company building the new plant.Ján Minár, a spokesman for machinery firm Martinske Strojarne, said that the factory would be built in Martin's industrial park and would produce car parts and components. "It has not yet been decided whether the factory will produce parts exclusively for Volkswagen," Minár said. "The possibility of producing car parts for other car companies still exists."According to the press agency SITA, the total investment in the Martin project will amount to 5.75 billion Sk ($160 million), of which Slovakia will provide 281 million Sk ($7.8 million). Production volume is predicted to be 12.26 billion Sk ($340 million) annually.

Going with the flow

At three o'clock on a November afternoon , a coal barge on the Danube River could be seen from the windows of the Slovak Parliament building. The boat was struggling upstream through the mist, while the river, swollen with sediment and fall rains, was in full spate.The Slovak Parliament has also been in flux this month. A tide of government policy statements has swept away the information barriers erected by the former Mečiar cabinet, leaving dirty laundry and red-handed crooks above the water line. The halls of the parliament building smell fresher and cleaner than they did two weeks ago, and the air is crisp with excitement at what has already occured.

What's Happening in Bratislava

Inspectors to visit largest insurer

Pál Csáky: "I bring more empathy" to Romany problems

Pál Csáky, a founder of the ethnic Hungarian SMK party, has been made Vice Premier for Human Rights and Minority Issues in Slovakia. The establishment of the position, as well as the inclusion of Hungarians in the new government, has been applauded by foreign diplomats and human rights groups such as the International Helsinki Federation. At its November 7-8 meeting in Vienna, federation delegates from countries such as Croatia said that the Slovak example should be closely studied by "complicated regions," such as the Balkans.One of Csáky's first moves in his new job was to arrange a meeting on November 6 with members of the Roma Intelligentsia for Coexistence (RIS), a Romany political group in Slovakia. The Slovak Spectator asked Csáky how he intended to tackle the 'Romany problem', as well as what the state's role should be in lessening ethnic tensions.

Škoda maintains auto sales lead

Škoda Auto Slovakia, the country's largest auto seller, is still cruising along smoothly in top market gear. The only cloud on the horizon, say Škoda officials, is the possible reintroduction of import restructions, mooted by the new Finance Minister on October 19.Brigita Schmögnerová, the new minister and a deputy for the reformed communist SDĽ party, said that Slovakia's soaring trade balance deficit would require the adoption of "short term measures focusing unfortunately on certain import restrictions.""The possible implementation of an import duty is unacceptable," said Škoda marketing manager Ilja Majda. "If it is implemented, however, Škoda will maintain its current prices for consumers."

Two views on the origins of VSŽ's financial crisis

The government:Jaroslav Volf , a deputy with the ruling SDK party and head of the Parliamentary Committee for Economy, Privatisation and Entrepreneurial Activities, told The Slovak Spectator that VSŽ's current management team would have to go before the state would agree to bail the company out.The opposition:The Slovak Spectator asked Milan Cagala, former Economy Minister and a deputy with the HZDS opposition party, what he thought about the recent troubles of giant steelmaker VSŽ.

Cabinet trumpets progress on EU entry

The European Commission has proposed that a joint high-level working group be established with Slovakia to remove hurdles from the country's path to membership in the European Union.The proposal came during an official November 5-6 visit to Brussels by representatives of the country's newly elected government. The group, including Premier Mikuláš Dzurinda, was visiting EU and NATO headquarters to discuss the cabinet's efforts to have Slovakia moved up to the group countries considered to be front-runners for integration."The offer to create a special working group is exceptional," said Ján Figeľ, state secretary at the Foreign Ministry and Slovakia's main negotiator for EU entry. "It's not a usual EU measure, so Slovakia should grab the big challenge it has been offered."