The OECD’s Base Erosion and Profit Shifting (BEPS) Project 

A few years ago OECD and G20 Leaders noticed that the international tax landscape had changed dramatically. The financial crisis and aggressive tax planning by multinational enterprises had resulted in significant losses to state budgets, and perceived tax evasion had become part of the political agenda. Consequently, joint actions were taken to increase transparency and the cross-border exchange of information in tax matters and to address the weaknesses of an international tax system that had created opportunities for questionable tax tactics.

Legislators on both the European and Czech level have been active in adopting new regulations that influence several areas of the modern economy. Financial services, with consumer finance on one side and markets in financial instruments on the other, have been at the center of these efforts. Financial regulation is not, however, the only measure heavily affecting banks, investment firms, and FinTech companies by putting new compliance requirements in place. Another huge legal instrument – the General Data Protection Regulation adopted on the EU level in 2016 – imposes new requirements on all companies dealing with personal data.

Current developments in the technology sector concern the Internet of things, industry 4.0, smart solutions, and the sharing economy. One may think that advances in technology barely affect the legal profession.

The 2017 CEE Legal Matters General Summit took place at the Intercontinental Hotel in Warsaw on June 1-2, 2017, once again bringing together well over a hundred General Counsel and Heads of Legal from across Central and Eastern Europe for two full days (and one entertaining evening) of seminars, panel discussions, best practices review, and networking. This year’s event — the third annual, following the 2015 GC Summit in Budapest and the 2016 GC Summit in Istanbul — was the biggest and most successful yet.

On May 31 and June 1, 2017, CEE Legal Matters was proud to host a rare event: A gathering of those senior lawyers from each Central and Eastern European country identified by peers as being most influential, most important, most uniquely responsible for having created the country’s modern commercial legal market.

Chief Legal Officers know how demanding their jobs are. They have to create and manage effective teams, retain and instruct external counsel, advise their employers on strategic decisions, and implement new technology, all while putting out 20 fires a day.

Hungary’s current Act on Civil Litigation Procedures was adopted in 1953, and it served courts, counsels, and parties in litigations well over decades of the socialist regime.

Tax dodging may cost Poland over EUR 11 billion a year. It is estimated that corporate tax evasion accounts for around EUR 2 billion annually. VAT frauds alone may cause the State budget losses of EUR 9 billion every year. These numbers have encouraged the Polish government to increase efforts aimed at closing existing loopholes. 

Compared to 2015 – a very busy year for Polish M&A with the value of deals growing by 79% to EUR 6.9 billion, which positively distinguished Poland from other CEE countries – 2016 has turned out to be less intense. Still, although policies of Poland’s right wing government – the Law and Justice Party, which was elected in November 2015 – may have weakened investors’ sentiment somewhat, economic data remains respectable at 132 deals (compared with 177 in 2015). 

“Vienna is the gate to Eastern Europe” – Niki Lauda

In The Corner Office, we invite Managing Partners at law firms from across the region to share information about their careers, management styles, and strategies. For this issue, we asked them to describe the first major deal or client matter they generated themselves, and how they did it.