Comparative Accounting Systems

by | Aug 17, 2021 | Assignment

Write a 1 page essay on Comparative Accounting Systems.Comparative Accounting Systems The Brazilian accounting system was specifically designed to generate and provide information to the tax authorities however the country is in the process of adopting the IFRS (Holt, 42). The decision was due to the recent growth of the country’s economy. Challenges to the adoption of IFRS are as a result of the difficulty in changing the mindset and approach which is mandatory in this principle based standards. Meanwhile South Africa shifted from the local generally accepted accounting principles (GAAP) and adopted the IFRS however the transition faced challenges due to the difficulty in harmonizing the local standards with the IFRS (Holt, 35). TaxesThe corporation tax rate charged for foreign companies established in a country is a major factor to be considered. Additionally foreign company may need to consider if the country in question provides tax breaks for new investors (Cordes, 111). An individual is liable to pay U.S income regardless where the individual earned the income therefore this applies to the expatriates. A company or subsidiary is required to pay U.S corporate tax amounting to 35%. first they will pay tax in their host companies then pay the difference of the two countries tax rate to the IRS which will amount to a total of 35% corporation tax (Cordes, 89). A tax haven describes a country or state whose taxes are relatively lower and there is stringent financial secrecy policies employed. The main advantage of a tax haven to an offshore company is that it reduces the high amounts of tax to be paid in the resident company (Cordes, 125). Additionally offshore companies benefit from assets protection as third parties can’t access their information, trusts and investments. Works citedHolt, Graham, David Tweedie, Philippe Richard, Abbas A. Mirza, and Magnus Orrell. International Financial Reporting Standards (ifrs) Workbook and Guide: Practical Insights, Case Studies, Multiple-Choice Questions, Illustrations. Hoboken, N.J: Wiley, 2013. Print.Cordes, Joseph J. The Encyclopedia of Taxation & Tax Policy. Washington, D.C: Urban Institute Press, 2005. Print.

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