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Some 220 more federal government professionals represented by the Professional Institute of the Public Service of Canada , most of them senior tax auditors, have received the news that their positions …

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More Job Notices at the CRA: Resources Diverted from Pursuit of Avoidance and Evasion Through Offshore Tax Havens

Businesses love to complain about corporate taxes and recently, many have been doing more than just complaining. A rush of tax inversion activity this year has seen tax-burdened American companies strikingmerger deals with foreign companies that allow them to reincorporate in a country with lower corporate income taxes. Yet while the companies seeking tax relief through inversions include the likes of Burger King, Walgreen Walgreen and Mylan Mylan, a new analysis of S&P 100 companies and their tax rates reveals that when it comes to being tax-burdened at home, General Motors General Motors, eBay eBay and Apple Apple lead the pack.

Because of factors like accounting techniques, business models and regulatory issues, corporate tax rates can be tough to determine. Personal finance website WalletHub tackled the task by looking at full-year 2013 revenue, tax payments and deferral amounts on the state, federal and international levels of each company in the S&P 100. What resulted from WalletHubs analysis is a list of companies with the top tax rates in the U.S., abroad, and overall. One clear trend from the analysis: massive tech companies get slammed at home but have excelled at creative accounting abroad.

I think what continues to surprise us is how the technology companies in particular are able to use international tax schemes to have a so much lower international tax rate, Odysseas Papadimitriou, WalletHubs CEO, said in a phone interview.The material types of companies and financial services companies are not able to replicate the same creative accounting, Papadimitriou added, which is surprising, because youd expect the banks to be the most creative, find the most loopholes. But theyve been outsmarted by technology and consumer goods companies.

Among the companies with the most notable gaps between U.S. and international tax rates were Apple, which has a 61% tax rate in the U.S. but a 3.7% tax rate overseas, and eBay, which has a 75.3% tax rate at home but a 5.7% rate abroad. Overall, WalletHub found that tech companies are paying as much as 70% less in international taxes. And,Papadimitriou noted, this difference isnt because these companies are fleeing to the Caymans with all their cash. Sure there are tax havens, but where theyre getting most of their revenue is not in tax havens. Theyre essentially able to find all those loopholes and exploit them to the maximum, he said.

Coming in the top three U.S. tax rates were General Motors (which has a whopping 161.5% rate, according to WalletHubs analysis), eBay (75.3%) and Colgate-Palmolive (which has a 61.7% rate).Papadimitriou noted that while a tax rate higher than 100% seems improbable, its the result of the special one-time charges that the companies might note in their annual reports. On the flip side of that equation, the companies with the three lowest tax rates were Abbott Laboratories (-55.2%), General Electric (-31.9%) and despite a 16.3% increase in its tax rate compared to 2012 Metlife and its -14.7% rate. The negative rate means that rather than owing Uncle Sam taxes, these companies are owed refunds from Uncle Sam.

Rather than seeing some of these very high domestic tax rates as a sign that more tax inversion attempts are on the way, Papadimitriou sees the reverse happening. There has been so much focus on this type of deal that Im not sure its smart for any company to try a tax inversion deal at this point, because I think its only a matter of time before the federal government finds a way to get back that lost revenue, he said. So you may go through a lot of motions and operations cost to only find yourself in more trouble and paying the same amount of taxes than if you hadnt done all of this.

To see more corporate tax winners and losers according to WalletHubs analysis, click through the slideshow below:

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GM, Apple And eBay Top The S&P 100 — With Their U.S. Tax Rates

Plans for a major rewriting of international tax rules unveiled on Tuesday could eliminate structures that have allowed companies like Google and Amazon to shave billions of dollars off their tax bills.

The Organisation for Economic Co-operation and Development announced a series of measures that, if implemented by members, could stop companies from employing many commonly used practices to shift profits into tax havens.

According to Reuters, corporate tax avoidance has become a hot political topic following media coverage and parliamentary investigations into the arrangements many big companies use to cut their tax bills.

Amazon and Google say they pay all the taxes they should. Analysts say competitive pressures force companies to seek to minimise all costs, including tax.

Last year, the Group of 20 leading economies asked the OECD to develop an action plan to tackle the problem.

Big United States technology companies could be those most affected by the OECDs plans but others could also be impacted including pharmaceuticals and branded consumer goods, as well as many European companies.

The draft proposals announced have been agreed by all G20 members and OECD members, which include most major industrialised countries, the OECD said in a statement.

But the measures form part of a larger (tax) base erosion and profit shifting programmme that will conclude next year. Only then will countries look at enshrining the results of the programme in law.

For more than 50 years, the OECDs work on international taxation has been focused on ensuring companies are not taxed twice on the same profits. The fear was that this would hamper trade and limit global growth.

Over the years, the OECD has formulated a standardised model tax treaty which allows countries to split taxation rights and avoid double taxation, partly by providing reliefs from measures intended to stop tax avoidance, like withholding taxes.

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Plans unveiled to crack corporate tax avoidance

September 17, 2014

Plansfor a major rewriting of international tax rules unveiled onTuesday could eliminate structures that have allowed companies likeGoogle Inc and Amazon.com Inc to shave billions of dollars offtheir tax bills. The Organisation for Economic Co-operation andDevelopment (OECD) announced a series of measures that, ifimplemented by members, could stop companies from employing manycommonly-used practices to shift profits into tax havens.

Corporate tax avoidance has become a hot political topic following media coverage and parliamentary investigations into the arrangements many big companies use to cut their tax bills. Amazon and Google say they pay all the taxes they should. Analysts say competitive pressures force companies to seek to minimise all costs, including tax.

Last year, the Group of 20 leading economies asked the OECD to develop an action plan to tackle the problem. Big US technology companies could be those most affected by the OECD’s plans but others could also be impacted including pharmaceuticals and branded consumer goods, as well as many European companies.

The draft proposals announced have been agreed by all G20 members and OECD members, which include most major industrialised countries, the OECD said in a statement. But the measures form part of a larger ‘(tax) base erosion and profit shifting’ programme that will conclude next year. Only then will countries look at enshrining the results of the programme in law.

For more than 50 years, the OECD’s work on international taxation has been focused on ensuring companies are not taxed twice on the same profits. The fear was that this would hamper trade and limit global growth. Over the years, the OECD has formulated a standardised model tax treaty which allows countries to split taxation rights and avoid double taxation, partly by providing reliefs from measures intended to stop tax avoidance, like withholding taxes.

But companies have been using such treaties to ensure profits are not taxed anywhere. For example, search giant Google takes advantage of tax treaties to channel more than $8 billion in untaxed profits out of Europe and Asia each year and into a subsidiary that is tax resident in Bermuda, which has no income tax. Google Executive Chairman Eric Schmidt has said changes to tax rules that increased its tax bill would hit innovation. The OECD’s proposals would make amendments to its model treaty so that cross-border transactions would not benefit from the reliefs in tax treaties if a principal reason for engaging in the transactions was to avoid tax.

“We are putting an end to double non-taxation,” OECD head of tax Pascal Saint-Amans said in a call with journalists. The think tank, which also advises members on economic policy, also wants curbs on how much profit companies can report in centralised inter-company lending and purchasing arms, which are often based in tax havens. Where such subsidiaries generate large profits on the back of intra-company trade, the OECD said the profits should be shared across the group.

This could hit UK telecoms provider Vodafone Group Plc , which has a Luxembourg subsidiary that buys telephone equipment for the group. Vodafone Procurement Company’s 200 staff generated profits of over 400 million euros (518.52 million US dollar) last year, making it one of the group’s smallest but most profitable divisions. An unusual Luxembourg tax rule allowed the subsidiary to pay no tax on that profit.

Vodafone said businesses across Europe already benefited from savings achieved by the Luxembourg operation and that it did not expect a significant impact on its business from the OECD measures. The OECD has also proposed changes in the rules on tax residence that allow US tech giants to generate billions of dollars in sales in many countries but not have those revenues assessed for tax by those countries’ tax authorities.

Originally posted here:
New global plans unveiled to crack down on corporate tax avoidance | Business Recorder

Apple is one of the big companies viewed negatively because of its use of offshore tax havens. Photo: Bloomberg

Australians are increasingly concerned about corporate tax avoidance and support greater measures to tackle profit shifting, a survey shows.

Voters are also more likely to view companies such as Apple negatively because of their use of offshore tax havens, and want companies to be required to report their profits and taxes in each country in which their operate.

The research, commissioned by advocacy group Tax Justice Network, comes as the government prepares to chair the G20 finance ministers’ and central bank governors’ meeting in Cairns next week.

The meeting is one of the last before the G20 leaders’ summit in Brisbane in November.

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The issue of profit shifting – where global companies move large sums of money offshore to lower their tax – is high on the agenda as governments try to plug holes in tax revenue.

The survey of 1000 people found that there is widespread support to make corporate tax in Australia more transparent.

Nine out of 10 voters believed it was unacceptable for foreign multinationals to operate in a country and not pay any taxes, even if they wereabiding by the law.

They also supported tighter regulations to close the tax loopholes used by corporations.

Continued here:
Voters back corporate tax avoidance crackdown

Apple is one of the big companies viewed negatively because of its use of offshore tax havens. Photo: Bloomberg

Australians are increasingly concerned about corporate tax avoidance and support greater measures to tackle profit shifting, a survey shows.

Voters are also more likely to view companies such as Apple negatively because of their use of offshore tax havens, and want companies to be required to report their profits and taxes in each country in which their operate.

The research, commissioned by advocacy group Tax Justice Network, comes as the government prepares to chair the G20 finance ministers’ and central bank governors’ meeting in Cairns next week.

The meeting is one of the last before the G20 leaders’ summit in Brisbane in November.

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The issue of profit shifting – where global companies move large sums of money offshore to lower their tax – is high on the agenda as governments try to plug holes in tax revenue.

The survey of 1000 people found that there is widespread support to make corporate tax in Australia more transparent.

Nine out of 10 voters believed it was unacceptable for foreign multinationals to operate in a country and not pay any taxes, even if they wereabiding by the law.

They also supported tighter regulations to close the tax loopholes used by corporations.

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Voters back corporate tax crackdown

Courtesy of Toronto International Film Festival

An ire-raising but imperfect doc about inequality of wealth

Toronto International Film Festival, TIFF Docs

Harold Crooks

About a decade ago, Harold Crooks was one of many writers involved with The Corporation, one of the most galvanizing docs to have been made about the perils of capitalism’s status quo. In his first film as solo director, The Price We Pay, he covers similar ground, looking mostly at ways corporations manipulate their legal construction and exploit a global patchwork of laws to keep from paying taxes. Though convincing in its (not exactly obscure) point that something needs to be done, and occasionally enlightening, Price suffers in comparison to the earlier film, with points that are often not adequately explored and decorative flourishes that distract instead of enhancing. Though it will be appreciated on video by those who already agree with its points, it isn’t the best film to make these arguments to those not already thinking about them.

The doc starts with some appropriately scary quotes and figures: By 2010, around 10 to 15 percent of the world’s financial wealth was stashed in tax havens, hidden from governments who might tax it to support services that benefit us all. Once upon a time, some British colonies used “no taxation without representation” as a rallying cry for revolution; now corporations who can lobby governments as if they were human citizens enjoy “representation without taxation.” The film explains that we’re not talking about money laundering or similar illegal activity: As they testify before lawmakers (these tense, often funny moments are the film’s highlight), representatives of companies like Apple and Amazon are clear about the ways in which they’re following tax law. They’re less clear explaining how huge percentages of their productivity should legally be thought of as existing in, say, the Cayman Islands.

Crooks does a nice job of tracing the growth of tax havens, showing how both the City of London and some of England’s former colonies established zones with laws tailor-made for big business. Money didn’t have to actually be in these places: Transactions could bounce around from one haven to another in perpetuity, without actually landing anywhere. Offshore finance “created ‘cloud’ money long before we had cloud computing,” one interviewee says. (Crooks leans heavily on footage of clouds and lightning storms, to mild effect, throughout the film.)

But in its account of the many ways corporations shield their dough, the film lacks specifics that would be useful to many viewers. It will toss up a chapter heading like “The Double Irish,” for instance, but fail to define this tax-avoidance scheme before it has moved on to the next chapter.

As one of the few pro-business speakers here puts it, though, complaining that a corporation isn’t paying their “fair share” is problematic. If a country wants Apple to pay x percent of their income in the U.S., they need to change U.S. laws to make that happen. Many interviewees chime in about the difficulty here, showing how single nations can’t act alone without driving companies to more friendly shores. Without some global cooperation, proposed remedies like a “Robin Hood” tax on financial transactions have little hope.

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'The Price We Pay' ('La Face Cachee de l'Impot'): Toronto Review

Treasurer Joe Hockey. Photo: Reuters

Labor has accused the government of procrastinating on a key measure to stop multinational companies shifting profits offshore.

It comes as the government prepares to chair the G20 finance ministers meeting in Cairns next week.

The information-sharing deal, part of the global push to tackle tax avoidance, has been signed by 40 countries, including Britain, the US and tax havens such as the Cayman Islands.

The Abbott government has delayed signing the deal to consult with business.

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Companies such as Apple, Google, Ikea, and Glencore Xstratahave been accused of deliberately reducing their tax bills in Australia by relocating profits overseas.

Treasurer Joe Hockey warned last week that government would not stand “idly by” while multinationals avoided tax.

But Labor’s assistant treasurer spokesman Andrew Leighsaid the government was talking tough on tax dodging while avoiding action.

“Joe Hockey has huffed and puffed in the Parliament about tackling multinational tax avoidance but continued to stall on a key initiative that would actually achieve this,” he said.

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Heat on Joe Hockey over tax deal

Treasurer Joe Hockey. Photo: Reuters

Labor has accused the government of procrastinating on a key measure to stop multinational companies shifting profits offshore.

It comes as the government prepares to chair the G20 finance ministers meeting in Cairns next week.

The information-sharing deal, part of the global push to tackle tax avoidance, has been signed by 40 countries, including Britain, the US and tax havens such as the Cayman Islands.

The Abbott government has delayed signing the deal to consult with business.

Advertisement

Companies such as Apple, Google, Ikea, and Glencore Xstratahave been accused of deliberately reducing their tax bills in Australia by relocating profits overseas.

Treasurer Joe Hockey warned last week that government would not stand “idly by” while multinationals avoided tax.

But Labor’s assistant treasurer spokesman Andrew Leighsaid the government was talking tough on tax dodging while avoiding action.

“Joe Hockey has huffed and puffed in the Parliament about tackling multinational tax avoidance but continued to stall on a key initiative that would actually achieve this,” he said.

Here is the original post:
Heat on Joe Hockey over tax avoidance deal as government prepares to host G20

WASHINGTON — There are more companies than people in the small state of Delaware. The reason is clear: the state offers companies low taxes, an efficient, pro-business legal environment, and it allows anyone to set up a company anonymously, registering a shell that hides who really controls it and controls the money within it.

That has now put Delaware, and other states that permit shell companies, in the sights of the U.S. authorities, after they have campaigned against international tax havens like Switzerland to fight tax dodging and money laundering.

Around two-thirds of the 500 largest U.S. companies, including Coca-Cola, Google and Walmart, are registered in the state, even as they operate from distant headquarters.

All they need in Delaware is a small mailbox, and they can enjoy the sweetheart environment it offers businesses.

And Delaware benefits substantially: the business of hosting businesses brought it $880 million in fees and taxes in 2013, 23% of the state budget.

But that same environment works for criminals as well. For just a few minutes and a few hundred dollars, anyone can register a company in the state without divulging the beneficial owner’s name. As in offshore tax havens, the state protects that secrecy.

“Most states require more documentation to get a library card or a driver’ license” than Delaware does to set up a company, John Kowalko, a state politician, said.

Most companies “take advantage of the system to do good, but some have ulterior motives.”

Delaware shell companies are hiding places for all kinds of miscreants. Viktor Bout, the infamous Russian arms dealer known as the “merchant of death”, established a number of Delaware-registered companies to mask his activities, as did the notorious Washington lobbyist Jack Abramoff, jailed for six years in 2006 for corruption.

One group of shell companies was set up to bilk millions of dollars from Medicare.

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Domestic Tax Haven, Delaware, Under Pressure

Tax Systems in Latin America and the Caribbean Work for the Benefit of the Elites, Oxfam

Poverty and inequality are not inevitable and do not drop out of the sky. The tax system design is a reflection of the political will of government officials to achieve a more equitable society or at least one with less inequality. Our analysis of the tax systems in the region shows that they are shaped to benefit economic and political elites and not the majority of the population, claims Rosa Caete Alonso, Oxfams Inequality Campaign Coordinator for Latin America and the Caribbean.

Latin America, the most unequal region

The governments of the region are not willing to pay the political price of improving the revenue collection of taxes on wealth. Therefore tax systems depend on consumption taxes, such as VAT, which ultimately affect poor people the most, Caete explains.

According to Oxfam, the inequality of tax systems in the region is also reflected in the large tax exemptions that the governments from the region grant to multinational and large domestic companies. These exemptions reinforce the accumulation of the elites wealth and in the end it is the most vulnerable population that pays the price of not having quality public services, Caete said.

Tax havens Oxfam also warns that the governments tolerance of tax havens constitutes a clear incentive for tax evasion and avoidance by companies and billionaires. According to the report, the tax revenue that would be generated from just 3.5 per cent of Latin American capital, that is hidden in tax havens, would be enough for 32 million people to be lifted out of poverty. That is, all people living in poverty from Bolivia, Colombia, Ecuador, El Salvador and Peru.

Oxfam launches an urgent appeal to the governments of Latin America and the Caribbean to implement the recommendations presented in this report and guarantee that their tax systems reduce inequality and protect the rights of all. The following stand out among the reports recommendations: the governments of the region must prioritize and fund public policies that address inequality from its roots; exert more pressure on those who have more, to contribute more; apply zero tolerance to tax fraud; and put an end to the lack of transparency of tax havens.

Related Oxfam Report Link Fiscal Justice to Reduce Inequality in Latin America and the Caribbean

Continued here:
Tax Systems in Latin America and the Caribbean Work for the Benefit of the Elites, Oxfam

WASHINGTON: There are more companies than people in the small US state of Delaware, its population of under one million nestled on the Atlantic coast just south of New Jersey.

The reason is clear: The state offers companies low taxes, an efficient, pro-business legal environment, and it allows anyone to set up a company anonymously, registering a shell that hides who really controls it and controls the money within it.

That has now put Delaware, and other states that permit shell companies, in the sights of the US authorities, after they have campaigned against international tax havens like Switzerland to fight tax dodging and money laundering.

Around two-thirds of the 500 largest US companies, including Coca-Cola, Google and Walmart, are registered in the state, even as they operate from distant headquarters.

All they need in Delaware is a small mailbox, and they can enjoy the sweetheart environment it offers businesses.

And Delaware benefits substantially: the business of hosting businesses brought it US$880 million in fees and taxes in 2013, 23% of the state budget.

But that same environment works for criminals as well. For just a few minutes and a few hundred dollars, anyone can register a company in the state without divulging the beneficial owners name. As in offshore tax havens, the state protects that secrecy.

Most states require more documentation to get a library card or a driver licence than Delaware does to set up a company, John Kowalko, a state politician, told AFP.

Most companies take advantage of the system to do good, but some have ulterior motives.

Delaware shell companies are hiding places for all kinds of miscreants.

Read the original post:
US tax haven Delaware under pressure

Like inversions by U.S. corporations that move their legal domicile outside the United States, conversions by U.S. corporations to real estate investment trusts are fundamental restructurings that provide major tax benefits. Upon announcing these deals,stock prices pop so Wall Street is anxious for more. Investors try to guess who among likely candidates will be the next. Private equity firms pressure companies to be aggressive.Investment banksandlaw firmsare making a fortune. But because they do not havethe emotional wallop associated with corporations abandoning America, REITs dont get the same attention from the public orfrom Congress.

In plain English, a REIT is a widely held corporation that gets most of its income from real estate and is required to pay out most of its income directly to shareholders. These dividends are deductible so most REIT income is shielded from corporate tax. Congress created REITs in 1960 to provide small investors with the opportunity to invest in real estate when it enacted theCigar Excise Tax Extension.

The two issues now generating a lot of attention are the growing number of corporations electing REIT status that arenot engaged in traditional real estate businessand the potential for a large increase in the number of C corporations choosing tospin off their real estate assets(both traditional and nontraditional) into independent entities that elect REIT status.

The table below presents my estimates of the long-term entity-level tax savings that 20 corporations gain from electing REIT status. The 20 REITs examined are those that have recently converted (or have announced their intention convert) to REIT status or that invest in nontraditional REIT assets, such as timber, data centers, prisons, cell towers, billboards, and document storage facilities. The estimates indicate that in total, these REITs in the long term will reduce corporate revenues by between $900 million and $2.2 billion annually (based on profits at estimated 2014 levels).

It is important to understand that these estimates are significantly larger than the total net cost to Treasury of REIT status for these 20 REITs. Offsetting the revenue losses estimated here are the tax increases not estimated, which include: (1) a permanent increase in individual tax revenues due to REIT distribution requirements and a higher rate of tax paid on REIT dividends than on typical corporate dividends; (2) a temporary increase in individual tax revenues due to the requirement that a corporation converting to REIT status distribute all of its accumulated earnings and profits; and (3) a temporary increase in corporate revenues resulting from a reassignment of REIT assets to asset classes with longer useful lives.

The Congressional Budget Office projectsthat federal corporate tax receipts will grow rapidly over the next few yearsfrom $273 billion in 2013 to $452 billion in 2017. But working in the opposite direction of rising profits and expiring tax breaks is corporate tax planning. Our projections of corporate tax receipts over the coming decade do incorporate some erosion of the corporate tax base through a variety of tax reduction strategies. Congressional Budget Office Director Douglas Elmendorf told reporters on August 27. REIT conversions, along with inversions, and much less visiblemultinational supply chain restructurings in which companies push huge amounts of profits they attribute to risk-taking and intellectual property into tax havens are the types of tax reduction strategies Elmendorf is talking about.

For macroeconomists like Elmendorf, the one or two billion dollars of estimated corporate revenue losses due to expanding REIT activity are tiny dots in the overall budget picture. But the phenomenon is likely to grow. After showing some reluctance to preapprove REIT deals, the IRS has the REIT ruling machineup and running again. Because it isnt getting the same scrutiny as the emotionally charged issue of corporate inversions, Congress is unlikely to interveneexcept in the context of tax reform which means nothing will happen any time soon. REIT activity will continue to expand because many of the new nontraditional REITs are in fast-growing business lines, such as colocation services provided by data center REITs. And it will grow because REITs spun off from existing business such asGaming and Leisure Propertiesand Windstreams new REITare actively seeking to be the repository of REIT qualified assets for other C corporations within their industries.

At 8 a.m. on Monday, August 25, Minnesota-headquarteredLife Time Fitness Inc. announcedit was exploring a potential conversion of real estate assets into a REIT. The health club companys share price, which had closed at $41.60 on Friday afternoon, jumped to $47.70 as trading began on Monday morning. Thats a 15 percent rise, increasing the firms market capitalization by nearly a quarter-billion dollars in a matter of minutes. Expect announcements like this to continue.

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Never Mind Inversions, What About REITs?

A funny thing’s happened in Finland. Scores of its monied elite have filed requests to correct their tax data this summersuddenly recollecting that they’d stashed earnings away in Swiss banks. Truly, this is the end of an era, thanks entirely to a U.S.-led crackdown on tax evasion. It’s also a strange new beginning.

Late last May, following a yearlong criminal investigation, Swiss bank Credit Suisse AG plead guilty to aiding wealthy U.S. citizens in hiding taxable income, agreeing to pay roughly $2.6 billion in penalties for the crime (to be divvied up between the Justice Department, the Federal Reserve, and the New York State Department of Financial Services, for some reason). Credit Suisse was charged with a pattern of misconduct that included actively recruiting clients, courting them at airports, golf courses, family weddings, and elsewhere with the promise of shielding their earnings from the IRS, and then also destroying documents pertaining to these concealed accounts, which numbered somewhere around 22,000 and held around $13 billion in total. Credit Suisse is Switzerland’s second-largest bank: a fact that allowed Attorney General Eric Holder to trot out “Too Big to Jail” in a press conference, a joke that should have, but did not, end with him putting on a pair of sunglasses.

It was only the most recent high-profile victory in the Obama administration’s longstanding battle against offshore tax havens, which has included thus far a $780 million deferred prosecution deal back in 2009 with UBS, Switzerland’s largest bank, and a $57.8 million penalty this past January against Wegelin & Co.a guilty verdict that has effectively shut that bank down for good. Founded in 1741 under the name Leinentuchhandel und Speditionshandlung, it was the oldest bank in Switzerland, and the 13th oldest in the world.

Both Credit Suisse and UBS have subsequently sent letters to their clients requesting that they either declare their secret assets to Swiss tax officials or alternately have their assets liquidated and transferred as cash to a new bank of their choice. The new policy is giving them a running start on next January, when Swiss banks will begin handing over customer financial data to tax officials for the first time, in compliance with the U.S. Foreign Accounts Tax Compliance Act (FATCA). FATCA requires that foreign financial institutions (“FFIs”) identify their American clients to the IRS, or face a 30 percent gross tax on a variety payments from U.S. sources.

Hence the wave of tax form corrections this summer in Finland.

“In some of the cases,” the lead counsel for the Finnish Tax Administration, Matti Merisalo, told Finland’s A-Studio news program last week, “people claim to have forgotten.”

“We will have to critically examine these claims since it will determine whether or not we impose a higher tax rate. Keeping wealth offshore usually involves a deliberate choice and doesn’t necessarily have anything to do with forgetfulness.”

Criminal proceedings are not entirely off the table, either, but the Nordic country’s Ministry of Finance is reportedly weighing their options, eager to have this taxable wealth repatriated, afraid of losing it in another capital flight to someplace else, and (as usual in financial stories) bargaining from a position of almost total powerlessness.

See the original post here:
200 Years of Swiss Bank Secrecy Is Ending. So, Where's the Money?

Sept. 6, 2014 2:05 a.m. ET

Corporate tax inversions, which dodge part of the 35% U.S. base corporate tax rate, have become the rage, and some lawmakers are in a rage over them. Inversions became prevalent in the 1990s, with some companies relocating to tax havens such as Bermuda. Critics say big corporations should fight to fix the tax code instead of reincorporating outside of the U.S., while others say companies already benefit from a variety of loopholes and deductions to mitigate their tax bite.

A Sept. 3 report by Markit, a global…

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Payouts Rising for Tax Inverters

Richard Bruton in Melbourne: Tax minimisation not an Irish issue. Photo: Michael Clayton-Jones

The Irish government has defended its low corporate tax rate that has seen multinational tech companies shift billions of Australian profits offshore.

Irish jobs minister Richard Bruton, who is in Australia on a five-day trade and investment mission, said the tax minimising strategies of tech companies such as Google and Apple were a symptom of the digital economy and not one country’s tax rate.

“The issue with Google and Apple is – how do you price and identify and tax digital matters?” he said.

“All tax codes have to change to deal with this … It’s not an Irish issue, it’s not a Dutch issue … it’s an international problem.”

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Ireland’s low corporate tax rate of 12.5 per cent has attracted corporations to its shores that have used the country’s treaties with other tax havens to minimise their tax.

Fairfax Media revealed in February that Apple alone had shifted $9 billion from Australia through its Irish subsidiary over a 10-year period.

Mr Bruton said Ireland was not considering raising its corporate tax rate, despite a push by governments around the world to close loopholes and stop corporate tax dodging.

“We’re not in the business of raising our corporate tax rate.We believe that it is perfectly legitimate to have a low corporate tax rate,” he said.

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Ireland defends country's tax status

Richard Bruton in Melbourne: Tax minimisation not an Irish issue. Photo: Michael Clayton-Jones

The Irish government has defended its low corporate tax rate that has seen multinational tech companies shift billions of Australian profits offshore.

Irish jobs minister Richard Bruton, who is in Australia on a five-day trade and investment mission, said the tax minimising strategies of tech companies such as Google and Apple were a symptom of the digital economy and not one country’s tax rate.

“The issue with Google and Apple is – how do you price and identify and tax digital matters?” he said.

“All tax codes have to change to deal with this … It’s not an Irish issue, it’s not a Dutch issue … it’s an international problem.”

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Ireland’s low corporate tax rate of 12.5 per cent has attracted corporations to its shores that have used the country’s treaties with other tax havens to minimise their tax.

Fairfax Media revealed in February that Apple alone had shifted $9 billion from Australia through its Irish subsidiary over a 10-year period.

Mr Bruton said Ireland was not considering raising its corporate tax rate, despite a push by governments around the world to close loopholes and stop corporate tax dodging.

“We’re not in the business of raising our corporate tax rate.We believe that it is perfectly legitimate to have a low corporate tax rate,” he said.

The rest is here:
Ireland's employment minister defends his country's tax status

Most Dutch banks are ‘vague’ about tax avoidance: fair banking report

Wednesday 03 September 2014

Seven Dutch financial institutions may be involved in evading taxes and are extremely vague about what they do to ensure this does not happen, the Dutch Fair Bank Guide said on Wednesday.

ABN Amro, Aegon, Delta Lloyd, ING, NIBC, Rabobank and Van Lanschot emerge as potential tax avoiders in research carried out for the fair banking monitor Eerlijke Bankwijzer, which was set up by a number of big Dutch charities and the FNV trade union.

While all Dutch banks insist they are not involved in international tax evasion, this report shows their international investments and services raise many questions, which are not all fully answered, the report states.

Risks

There is, for example, a real risk that ABN Amro and Van Lanschot are enabling tax evasion through their services in Jersey, Luxembourg and Switzerland.

The report also raises major questions about the role of ING, Aegon and Delta Lloyd in Luxembourg and the Caymann Islands.

Rabobank, the report points out, has more than 50 subsidiaries and joint ventures in the US state of Delaware, known for its generous taxation provisions.

In total, eight Dutch financial institutions have 166 subsidiaries based in 13 different tax havens. Officially this does not break tax law but it does undermine the rules in one territory in favour of another, the report states.

Original post:
Most Dutch banks are 'vague' about tax avoidance: fair banking report



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