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International Accountant Magazine
International Accountant magazine contains specific content tailored to the needs of AIA members and students. As an exclusive benefit to AIA members receive a hardcopy of the magazine, which provides technical updates, best practice and guidance for accounting professionals, supporting them in their work.
A selection of featured articles from the publication are available below.
In recent years, the world has seen several major events which have caused huge global shifts in trade power. One such event is the departure of the UK from the European Union (EU), known as Brexit. While this development is likely to slow down trade and disrupt supply chain activities between the UK and the EU, it could also lead to hugely beneficial opportunities for countries and businesses in other regions especially Asia. Brexit in particular has made the UK and the EU look to increase trade with other countries.
Unique opportunities and challenges
For Asian economies, Brexit presents many unique opportunities and challenges. There is a substantial amount of trade activity between Asian economies and the UK and the EU, in addition to which many Asian economies consider the UK and the EU to be key investors in their respective countries. Given today’s uncertain times due to the pandemic, there is a growing concern about future investments. Of particular concern in this regard is the ASEAN block countries, who have, over the last decade, made deliberate attempts to attract both UK and EU investors into billions of dollars of potentially lucrative investments in the manufacturing and service sectors. Meanwhile, Japan and China face issues, with some of their leading manufacturers and financial institutions having regional operational bases in the UK which no longer function as gateways for business operations in the EU.
Despite these potential issues, the Brexit decision also provides a number of interesting opportunities for Asian countries. In this regard, countries like Singapore, Myanmar, Malaysia and India could look at building on their historic ties with the UK to establish stronger economic relationships. In order to help realize these opportunities, the UK and the Asian countries are negotiating free trade agreements (FTA). As the UK is no longer bound by the same kind of rigid requirements that being an EU member demanded, the negotiations could in turn lead to more successful, mutually beneficial outcomes.
The ASEAN block
The ASEAN block comprising Singapore, Malaysia, Indonesia, Brunei, Thailand, Vietnam, Cambodia, Philippines, Laos and Myanmar is seen as one of the next up-and-coming regional economies, with both the EU and the UK looking to boost trade. ASEAN’s economy is predicted to be the fourth largest globally by 2030. The UK has long been the second biggest investor in ASEAN and is also a major exporter to the region. As of now, more than 25,000 UK companies are exporting to ASEAN, making this region the second-largest UK export destination after the US. In the meantime, the EU has started bilateral negotiations with individual members of the ASEAN block. The EU is an important trade partner for ASEAN accounting for nearly 15% of ASEAN’s exports. Singapore and Vietnam have FTAs with the EU. The UK also signed FTAs with Singapore and Vietnam in December 2020 and January 2021 respectively. ASEAN countries have also been identified as the next frontier for an e-commerce boom. With the EU and the UK’s trade agreements with some countries in the region, ASEAN seems to be a likely market for major expansion in e-commerce activities. ASEAN countries have seen large increases in internet penetration and this is expected to grow further. Rising internet penetration coupled with a rising middle class in the region points to great opportunities for those looking to sell and deliver ecommerce products in these countries.
What impact will Covid-19 have on the future of Islamic finance?
The global financial sector had been hit by two major crises within just over a decade: the global financial crisis (GFC) of 2008-2009 and the global health crisis caused by the coronavirus (Covid-19).
Financial risk falls under two types: endogenous and exogenous. Endogenous risk is the outcome of the market interactions based on the market players’ abilities, biases, prejudices and resources; while exogenous risks are shocks to the financial system from outside the system. The GFC was an endogenous risk that emerged due to the actions of market players and bankers, which led to excessive risk-taking and build-up of debt. However, the Covid-19 crisis is due to exogenous factors that have a negative impact on the real economy directly and on almost all sectors globally.
What is the impact of Brexit on international tax issues and the changes to taxes for multinationals?
Following the United Kingdom's exit from the European Union on 31 January 2020, the Free Trade and Cooperation Agreement (TCA) was finally delivered on 30 December 2020 to govern the future relationship between the UK and EU. This agreement was signed one day before the end of the transition period, after which the UK would have left the EU with no deal.
Many uncertainties in the nature of this agreement remained during the transition period which significantly reduced the time businesses had to plan for the new rules.