The K in KPMG stands for Pieter Klijnveld, a Dutch accountant from Amsterdam whose practice would grow, through mergers and acquisitions, into one of the world’s Big Four auditing giants.
Floris Schuring
Age: 46
Citizenship: Dutch
Position: Managing Partner at KPMG Ukraine
Years in country: 14 years
Tips for succeeding in Ukraine: “Understand the culture. You can start with your own culture, but then adjust to how the people are.”
But that doesn’t mean people should consider it a Dutch business, says Floris Schuring, managing partner of KPMG’s Ukraine operations. The headquarters may be in Amstelveen, just outside the Dutch capital, but the chairman is based in Hong Kong, and the operation has become so global as to remove any national flavor.
“It’s really a bit of a coincidence that a Dutch person is the managing partner of KPMG here,” Schuring says.
Yet it also seems strikingly fitting. The Netherlands pioneered corporate finance, KPMG’s bread and butter. The Dutch East India Company was arguably the world’s first multinational corporation, financed through share issues that established the first modern stock exchange.
Between its launch in 1602 and its 1798 bankruptcy it sent almost a million Europeans to work in the Asia trade and gathered quasi-state powers, including the ability to wage war, imprison and execute, mint coin and establish colonies.
It was also a major driver of the Dutch colonial model, Schuring said, which unlike France’s or England’s was based on establishing strategic trade posts rather than conquering vast territories. But the accountant says this wasn’t a prelude to modern tax havens.
Speaking about the example of Mauritius (population 1.2 million), a former Dutch colony in the Indian Ocean and currently India’s top foreign direct investor, he said: “Their ships were simply sailing past it and they needed a place to refresh. Taxation issues became relevant much later.”
They certainly play an important role in the Dutch economy now, though. In a recent article, Bloomberg described the Netherland’s as a $13 trillion tax haven, allowing companies like computer producer Dell’s Dutch unit to pay just 0.1 percent in tax on profits of $2 billion in 2011.
But Schuring argues this is not due to tax rates in the Netherlands, but rather the result of double-taxation treaties that allow for favorable corporate structuring.
“If you earn a lot of money in low tax countries and the money goes through the Netherlands, then it’s not taxed again,” he said. “So to accuse the Netherlands is overdone.”
For now Schuring is more focused on local reforms, notably via his position on the American Chamber of Commerce’s tax committee, which advises authorities on legal and strategic issues.
There may have been some effects, too, as the World Bank’s Doing Business ranking put Ukraine at 165th in terms of paying taxes in 2013, up from 183rd in 2012.
Asked about cooperation with tax officials, Schuring says there are “people in the new Ministry of Revenues and Fees, who are really trying to engage with the business community and consult us about how to do things better.”
But with the economy in crisis and a increasingly bare coffers, Schuring says some tax officials treat companies as stop gap revenue generators.
“What you hear from companies is that they are still getting calls from tax authorities to make prepayments (for more than the required year ahead), or that companies are due VAT refunds and it’s not happening,” he said “Or they are being told informally ‘Okay, we’ll give you back VAT, but then you need to prepay corporate tax,’” he said.
Meanwhile, Shuring added, companies feel that courts can’t provide independent rulings and thus have to depend on high level government relations.
“Individual cases sometimes get solved in that way, but the bigger question is structural, because you solve one (case), and then you have the next company who has a similar problem,” he said.
For all its faults, though, Ukraine’s business climate mostly seems an interesting challenge for Schuring. While communication in the Netherlands is more blunt and result-oriented, he explained, in Ukraine a lot more tact and deft navigating is necessary to get results.
“The Dutch think that if you tell something straight in a person’s face, then at least you have clarity,” he said. Here you need to go in a round-about way, sometimes, to maintain good relations, Schuring said, “though this is not necessarily more Ukrainian, it’s just less Dutch.”
But the local way of doing business could also benefit from some Dutch habits, such as being on time and meeting one’s commitments, he noted. Being reliable always helps, he explained, because at least the other side knows where they stand.
“I always felt like I was on vacation there,” Schuring reminisceses with a smile. “We could talk about football over coffee for hours before getting down to business.”
Kyiv Post editor Jakub Parusinski can be reached at [email protected], and on Twitter at @j_parus.
