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US corporations have $1.4tn hidden in tax havens, claims …

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Apr 162016

The report singled out British overseas territories such as Bermuda for their popularity with US firms seeking to slash their tax bill by profit-shifting. Photograph: Alamy

US corporate giants such as Apple, Walmart and General Electric have stashed $1.4tn (980bn) in tax havens, despite receiving trillions of dollars in taxpayer support, according to a report by anti-poverty charity Oxfam.

Related: Tax havens dont need to be reformed. They should be outlawed | Richard Brooks

The sum, larger than the economic output of Russia, South Korea and Spain, is held in an opaque and secretive network of 1,608 subsidiaries based offshore, said Oxfam.

The charitys analysis of the financial affairs of the 50 biggest US corporations comes amid intense scrutiny of tax havens following the leak of the Panama Papers.

And the charity said its report, entitled Broken at the Top was a further illustration of massive systematic abuse of the global tax system.

Technology giant Apple, the worlds second biggest company, topped Oxfams league table, with some $181bn held offshore in three subsidiaries.

Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing, was second with $119bn stored in 118 tax haven subsidiaries.

Computing firm Microsoft was third with $108bn, in a top 10 that also included pharmaceuticals giant Pfizer, Googles parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state.

Related: In defence of tax havens: offshore banking is not the same as dodgy dealing | Nigel Green

Oxfam contrasted the $1.4tn held offshore with the $1tn paid in tax by the top 50 US firms between 2008 and 2014.

It pointed out that the companies had also enjoyed a combined $11.2tn in federal loans, bailouts and loan guarantees during the same period.

Overall, the use of tax havens allowed the US firms to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014.

The charity said this had helped firms spend billions on an army of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers.

The top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government, Oxfam said.

For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts, said Oxfam.

Robbie Silverman, senior tax adviser at Oxfam said: Yet again we have evidence of a massive systematic abuse of the global tax system.

We cant go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill.

Governments across the globe must come together now to end the era of tax havens.

Oxfam estimates that tax avoidance by US corporations costs the worlds largest economy some $111bn a year, but said it was also fuelling the global wealth divide by draining $100bn from the poorest countries.

Tax dodging practised by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth, the report said.

Oxfam also singled out British overseas territories such as Bermuda for their popularity with US firms seeking to slash their tax bill by profit-shifting.

In 2012, said Oxfam, US firms reported $80bn of profit in Bermuda, more than their combined reported profits in Japan, China, Germany and France, four of the worlds five largest economies.

The charity called on the US government to pass the Stop Tax Haven Abuse Act, including a requirement for firms to report their tax contribution on a country-by-country basis.

Country-by-country reporting has been recommended by a host of non-governmental organisations and charities to prevent companies from artificially shifting their income out of the poorest countries.

US corporations have $1.4tn hidden in tax havens, claims …

Tax Havens / Bank Secrecy Global Financial Integrity

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Dec 142015


The phrase tax haven often conjures up images of a balmy palm tree-studded island nation with an anything goes attitude to accepting financial deposits and a distinct distaste for foreign authoritiessunny places for shady people, as author Nicholas Shaxson calls them. But these classical tax havens now have a lot of companydespite recent progress, there are still plenty of places all over the world where one can stash their money without scrutiny.

In other words, tax havens arent tax havens just because they have low taxesrather, what makes a tax haven is its opacity of financial information. This is why tax havens are often more accurately referred to as secrecy jurisdictions, and why they facilitate many more problems than just tax evasion.

While the legal regimes that tax havens set up to enable this secrecy are complex, their basic outline is simplebanks, companies, trusts, or other financial actors in the country are allowed to accept money from basically anywhere without reporting it to the authorities in the country where it originates or from which it is controlled. In some cases, it is actually illegal to disclose that information, but in many places, it is simply because the banks or other entities arent required to disclose it and there is no mechanism to force them to do so.

Laundering criminal proceeds through a tax haven is therefore merely a matter of finding a bank in that country to accept your deposit without asking questions, shuffling the money around a bit, and then sending it to wherever youd like to spend it or to wherever youd like to receive it. Evading taxes through a tax haven works similarlydisguise income or assets as passing through that country and fail to report it to your home countrys tax authority. For the less criminally inclined, tax havens often also offer a great legal ways to avoid paying taxes, simply by characterizing income as passing through that country and using loose tax treaties or loopholes in ones home country tax law to claim that the income is untaxable there.

Law enforcement and tax authorities will always be one step behind criminals and tax evaders, following cryptic transaction records and grasping at shadows rather than seeing where money is actually hidden.

Over the years, many developed countries have taken steps to break through tax haven secrecy by including provisions in tax treaties or other agreements to exchange financial information with other governments, including tax haven governments upon request. This system has two major flaws, though: First, it requires the requesting government to know what specific information theyre looking for, which can be difficult to pin down when attempting to trace money passing through anonymous shell companies or many other money laundering strategies. Second, the tax haven government may not be able to collect or have access to the information being regulated; so pursuing the process can be an extremely slow process with potentially little reward.

The alternative is automatic exchange of financial information (or automatic exchange for short), and it is exactly what it sounds likecountries automatically exchange information on bank accounts, transactions, and financial flows with each other on a periodic basis, enabling law enforcement and tax authorities to follow up on any leads they may have. GFI has advocated for many years that countries should establish and participate in systems whereby they exchange as much information with each other as is feasible.

While automatic exchange may have been considered unfeasible in the past, technological advances have made the collection, transfer, and processing of the large amounts of data involved relatively easy, and automatic exchange has come to be seen as a common-sense solution to the problems created by tax haven secrecy. The G20 nations declared in 2013 that automatic exchange is the new global standard, and pledged to begin exchanging financial information automatically by the end of 2015. In 2014, every OECD member-state and a group of several other countries endorsed a standard system for multilateral automatic exchange of financial information. GFI strongly supports automatic exchange of financial information on a multilateral basis and believes the opportunity to join this system should be extended to all willing countries, specifically developing countries.

Developing countries would benefit tremendously from a well-designed and well-implemented system of automatic exchange of financial information. Developing countries law enforcement and tax authorities often have less expertise or technical capacity for tracking transactions and income passing through tax havens, yet these countries are harmed the most by the illicit financial flows enabled by the opacity of tax havens and the shadow financial system.

GFI believes that any multilateral system of automatic exchange should also serve the interests of the worlds smaller economies, but must also take into account the capacity of these countries to effectively utilize the data they would receive from this system. Technical assistance and capacity-building programs will be crucial to this effort, but developed countries should also consider exchanging information to developing countries without obligating them to return the favor, at least initially.

The Foreign Account Tax Compliance Act (FATCA) is a U.S. law enacted in March of 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. FATCA requires financial institutions outside the United States to determine whether it has any customers who are U.S. citizens and report information on all of those customers accounts to the Internal Revenue Service (IRS). Any bank refusing to comply will be assessed an automatic withholding tax on its U.S.-source income. Even though it has not even fully gone into effect yet (the first information exchange will take place in 2015), the law is widely viewed as a game-changer in global information exchange and helped pave the way for other countries commitments to a multilateral information exchange system. For more information on FATCA, please see the U.S. Treasury website.

Multinational companies (or MNCs) use tax haven secrecy in slightly different ways then criminal tax evaders and money launderers. In general MNCs use complicated corporate structures involving layers of tax haven entities and accounts to disguise or alter the character of their income in ways that (often legally) reduce their corporate tax bill, a process known as tax avoidance (in contrast to tax evasion, which is illegal). These strategies can be wildly successful for MNCs, bringing their tax bills down to zero or even triggering a tax refund from the government, while they enjoy massive profits.

Cracking down on tax avoidance often requires closing the seemingly endless number loopholes in tax treaties and tax laws one at a time. However, one way to greatly expedite this process, as well as bring public pressure to bear on rampant tax avoiders, is to require them to own up to their tax schemes. Global Financial Integrity recommends that all multinational companies be required to publicly disclose basic financial information, such as their sales, profit, taxes paid, and number of employees, in each individual country in which they operate. This policy, called country-by-country reporting, will not only help both rich and poor countries better enforce and amend their tax laws, but it will also make free markets more transparent for investors and the public at large.

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Top 12 tax havens for US companies RT Business

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Oct 232015

US corporations are making record profits in tax havens like Bermuda, the Cayman Islands, and the British Virgin Islands (BVI). Some of the profits exceed the GDP of the host country, with Bermudas offshore profits 1643% of total economic output.

As a share of Gross Domestic Product (GDP), profits from subsidiary US companies operating in the Netherlands are more than 100 percent of the countrys annual economic output, according to a new study by Citizens for Tax Justice, published Tuesday.

In Bermuda, US companies reported $94 billion in profit, but the islands GDP is only $6 billion. The report draws on data collected by the US International Revenue Service from subsidiaries reporting profits outside of the US in 2010.

Clearly, American corporations are using various tax gimmicks to shift profits actually earned in the US and other countries where they actually do business into their subsidiaries in these tiny countries, the report says.

US companies filed the largest profits in the Netherlands, Bermuda, Ireland, Luxembourg, the Cayman Islands, Switzerland, Singapore, the Bahamas, the British Virgin Islands, Cyprus, the Netherlands Antilles, and Barbados. But none of these finances are factored into the GDP of the host countries.

When filing US income taxes, a foreign corporation is defined if its US shareholders control more than 50 percent of the outstanding voting stock.

Offshore wealth money that is kept abroad for tax purposes- is a popular tactic for American companies to avoid paying high taxes in the US. Google, Apple, and other hi-tech companies have all been accused of sheltering money abroad and not contributing enough to the American tax system, which is their main market.

Many US companies use a loophole called repatriation in order to delay paying the US government taxes. Under US tax law, companies with offshore subsidiaries can wait until their company is repatriated, or returned to the US, until they pay taxes. This tool encourages US companies to report profits outside of the US, where they are safe from high taxes.

Other countries can offer very attractive corporate tax rates compared to the required 40 percent in America. Bermuda, the Cayman Islands, and the Bahamas for example, have a rate of 0 percent.

Ireland has a corporate tax rate of 12.5 percent, Switzerland 17.92 percent, and Luxembourg a local rate of 29.22 percent, according to data from KMPG Global.

The only country where companies pay more taxes than in America is in the United Arab Emirates, which has a 55 percent corporate tax rate.

Countries, or tax havens, can provide opportunities for investors by lowering their corporate tax rates as well as income tax rates.

Low income tax rates can make investment more competitive and business climate more attractive for some investors looking for loopholes. An estimate by Boston Consulting Group pegs offshore wealth at $8.5 trillion. Other independent estimates peg it as high as $20 trillion.

With the G20 and OECD countries focused on curbing tax evasion and avoidance, several Caribbean countries Bermuda, Barbados and Cayman Islands would be subject to a tightening tax noose. These countries could face a deceleration in economic activity if international tax structures are to be dismantled.

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Top 12 tax havens for US companies RT Business

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The problems Tackle Tax Havens

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Oct 032015

Switzerland is not only one of the worlds biggest financial centres but also one of the worlds largest tax havens; find out why the country took first place on the 2011 Financial Secrecy Index.

Learn about SAB Miller, the brewing multinational whose transfer pricing techniques are depriving countries of much needed tax revenue.

This multi-billion dollar Ponzi scheme orchestrated by infamous Wall Street financier Bernie Madoff could not have happened without tax havens.

Teodoro Nguema Obiang used tax havens to exploit Equatorial Guineas natural resources. Not a very nice man.

Dublin a magical city of light touch regulation, which draws in money from far and wide and channels it directly into the shadow banking system.

The epic corruption which destroyed Enron and hundreds of livelihoods could not have happened without tax havens.

The Alpine offshore microstate of Liechtenstein hit the headlines in early 2008 for harbouring the corrupt funds of hundreds of tax evaders.

Find out why the rich-poor gap is greater in the United States than almost any other developed nation.

Following on from point 8, find out why Delaware, The First State, is the best place to escape tax in the world.

The City of London Corporation. Local-government authority and massive offshore lobbying body.

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The problems Tackle Tax Havens

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Offshore Tax Havens – Caribbean Tax Havens

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Sep 282015

Home / Caribbean Tax Havens

Caribbean tax havens are amongst the worlds most popular and well respected tax havens. The Caribbean region has been known to produce outstanding tax havens which are also offshore jurisdictions. Tax havens in the Caribbean are known for the benefits they provide for a large client base: some of the benefits of Caribbean tax havens include, reducing tax liability and providing privacy. Some of the more respected tax havens in the Caribbean are Dominica, St Kitts, Nevis, Barbados, Anguilla, the British Virgin Islands (BVI), Belize and the Bahamas among others.

Tax havens are best described as countries which provide shelter from taxation. Taxes imposed in a tax haven can be very low or nonexistent. A tax haven which imposes no taxes is usually referred to as a pure tax haven and the Caribbean has many of these. Most countries in the Caribbean resorted to becoming tax havens as a means of maintaining their local economies and removing the dependency on more developed nations, a trend once very prevalent in the region.

As offshore tax havens countries in the Caribbean region offer professional offshore services which include the incorporation of offshore companies or international business companies, offshore banking, the formation of offshore (exempt ) trusts, the formation of limited liability companies (LLCs), exempt insurance and reinsurance, the registration of vessels and ships and the formation of foundations among other services. These offshore services are all backed by modern and progressive legislation each possessing distinct characteristics based on the country of origin.

The offshore havens of the Caribbean are well known to provide clients with legal means to reduce international taxes. All the offshore tax havens mentioned above are pure tax havens with the exception of Barbados which taxes offshore business companies a small percentage of its overall annual profits. Barbados imposes taxes on its offshore business companies at the low rate of between 1 and 2.5% and the amount of taxes paid are calculated based on the profits of the offshore corporation. The other Caribbean tax havens charge offshore business companies zero taxes on profits gained from outside of the jurisdiction. Offshore jurisdictions such as Dominica guarantees an offshore business company a 20 year period of tax exemptions as stipulated by the offshore legislation. Caribbean offshore jurisdictions also exempt offshore business companies, trusts and foundations from Stamp Duty on transactions made on behalf of these entities.

Tax havens in the Caribbean all provide privacy for the beneficial owners of offshore business companies and bank account holders. In most offshore jurisdictions in the Caribbean, legislation has been passed prohibiting the disclosure of information regarding beneficial owners of offshore companies, foundations, trusts and bank accounts. In the offshore jurisdiction of Nevis for example, privacy is protected by the Confidentiality Relationship Act. In the Commonwealth of Dominica divulging information regarding offshore business companies results in a monetary fine and a possible prison sentence.

Most of the major tax havens in the Caribbean have not signed double tax treaties with other countries in the world, making tax information of clients safe from the tax authorities in the respective resident countries. Caribbean tax havens further provide privacy for offshore clients by enabling them to incorporate offshore business companies with the use of nominee shareholders and directors. This practice is allowed in Nevis, Dominica, Anguilla among others.

The tax havens of the Caribbean have been around for over one decade and have great experience in providing asset protection for clients and, Caribbean tax havens are good at providing secrecy for clients.

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Offshore Tax Havens – Caribbean Tax Havens

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The Book | Treasure Islands: Tax Havens and the men who …

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Sep 212015

Millions of people have a queasy feeling that something is not right in the global economy but they struggle to put their fingers on what exactly the problem is. Treasure Islands at last tells the real story of where it all went wrong. This is the great untold story of globalisation.

Tax havens are not exotic, murky sideshows at the fringes of the world economy: they lie at its centre. Half of world trade flows, at least on paper, through tax havens. Every multinational corporation uses them routinely. The biggest users of tax havens by far are not terrorists, spivs, celebrities or Mafiosi but banks.

Tax havens are the ultimate source of strength for our global elites. Just as European nobles once consolidated their unaccountable powers in fortified castles, to better subjugate and extract tribute from the surrounding peasantry, so financial capital has coalesced in their modern equivalent today: the tax havens. In these fortified nodes of secret, unaccountable political and economic power, financial and criminal interests have come together to capture local political systems and turn the havens into their own private law-making factories, protected against outside interference by the worlds most powerful countries most especially Britain. Treasure Islands will, for the first time, show the blood and guts of just how they do it.

Tax havens arent just about tax. They are about escape escape from criminal laws, escape from creditors, escape from tax, escape from prudent financial regulation above all, escape from democratic scrutiny and accountability. Tax havens get rich by taking fees for providing these escape routes. This is their core line of business. It is what they do.

These escape routes transform the merely powerful into the untouchable. Dont tax or regulate us or we will flee offshore! the financiers cry, and elected politicians around the world crawl on their bellies and capitulate. And so tax havens lead a global race to the bottom to offer deeper secrecy, ever laxer financial regulations, and ever more sophisticated tax loopholes. They have become the silent battering rams of financial deregulation, forcing countries to remove financial regulations, to cut taxes and restraints on the wealthy, and to shift all the risks, costs and taxes onto the backs of the rest of us. In the process democracy unravels and the offshore system pushes ever further onshore. The worlds two most important tax havens today are United States and Britain.

Without understanding offshore, we will never understand the history of the modern world.

Poverty in Africa? Offshore is at the heart of the matter. Industrial-scale corruption and the wholesale subversion of governments by criminalised interests, across the developing world? Offshore is central to the story, every time. The systematic looting of the former Soviet Union and the merging of the nuclear-armed countrys intelligence apparatus with organized crime, is a story that unfolds substantially in London and its offshore satellites. Saddam Hussein used tax havens to buttress his power, as does North Koreas Kim Jong-Il today. Prime Minister Silvio Berlusconis strange hold over Italian politics is very much an offshore tale. The Elf Affair, Europes biggest ever corruption scandal, had secrecy jurisdictions at its core. Arms smuggling to terrorist organisations? The growth of mafia empires? Offshore. You can only fit about $1 million into a briefcase: without offshore, the illegal drugs trade would be a fraction of its size.

Private equity and hedge funds? Goldman Sachs? Citigroup? These are all creatures of offshore. The scandals of Enron, Parmalat, Long Term Capital Management, Lehman Brothers, AIG and many more? Tax havens lay behind them all. The rise of multinationals, the explosion of debt in advanced economies since the 1970s is substantially an offshore tale. Complex monopolies, frauds, insider trading rings these corruptions of free markets always have tax havens at their heart. As Treasure Islands explains in vivid, thrilling, horrifying detail, every big financial crisis since the 1970s including the great global crisis that erupted in 2007 has been a creature of the tax havens.

These problems all have other explanations too. Tax havens are never the only story, because offshore exists only in relation to elsewhere. That is why it is called offshore. Without understanding the tax havens, or the secrecy jurisdictions as I often prefer to call them, we cannot understand the world. Treasure Islands at last starts to fill this gigantic hole in modern history.

In short, it is the most important expos of tax havens ever published.

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The Book | Treasure Islands: Tax Havens and the men who …

Tax Haven Cyprus

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Aug 102015

Cyprus is an island in the Mediterranean Sea. Cyprus is a popular tourist destination which receives millions of visitors each year who flock to the white sand beaches to soak in the Mediterranean sun. Cyprus is one of several tax havens located in the European continent. An offshore jurisdiction Cyprus specializes in services such as the incorporation of offshore companies, offshore insurance, and the formation of Cyprus Trusts among other offshore services

Cyprus is a well developed country which is well sought after as an offshore tax haven. A member of the European Union Cyprus has strict laws in place to protect the offshore financial sector of the jurisdiction. Cyprus can be considered a low tax haven since the country has a low tax regime in place for offshore companies and resident companies. The tax haven of Cyprus is popular among European investors and businessmen.

A company incorporated in the tax haven of Cyprus can be called an International Business Company if all of its owners are foreigners to the country. Cyprus companies can be used for investment and as trading companies. The tax haven of Cyprus imposes the same tax rate for all companies incorporated in the jurisdiction. Companies in the low tax haven of Cyprus pay taxes worth 10% of their annual profits. There is no withholding tax applied to the payment of dividends in tax haven Cyprus. Cyprus also has no wealth tax.

The offshore tax haven of Cyprus is well known for offshore banking. The low tax environment of Cyprus allows for offshore bank accounts at many banking institutions on the island. There are no taxes applied to the interest earned by offshore bank accounts in the tax haven of Cyprus. Therefore offshore bank accounts in tax haven Cyprus is good for investments.

Cyprus International trusts have its advantages in tax haven Cyprus. The offshore tax haven allows for the formation of trusts; which will pay no taxes on income gained outside of the territory. Trust dividends and interest gained are tax free in the low tax haven Cyprus. Cyprus trusts are granted privacy. The names of the trust owners are not disclosed to the registrar and there is no need for Cyprus trusts to do financial reporting to any authority in tax haven Cyprus.

As a tax haven Cyprus is well regulated. Privacy is one of the features of all tax havens of the world. Cyprus has legislation in place to protect the privacy of offshore bank account holders, the owners of Cyprus trusts and Cyprus International Business Companies. Tax haven Cyprus has banking secrecy laws in place to protect the integrity of offshore bank accounts in the jurisdiction. The disclosure of information in Cyprus offshore bank accounts is prohibited and punishable by the law. Bank employees and other persons who are associated with Cyprus banks must take an oath of secrecy. This is a requirement of the Central bank of tax haven Cyprus.

Cyprus offshore companies or International Business companies are also awarded privacy per the companies legislation of offshore Cyprus. Companys legislation allows for the registration of Cyprus offshore companies beneficial owners need not be filed with the Registrar of Companies. Company legislation allows for the incorporation of companies using nominee shareholders and directors. The names of the beneficial owners will remain private. In cases of criminal investigations into the operations of the offshore company then the names of beneficial owners might be released.

Offshore corporations in Cyprus are obligated to prepare annual accounting reports to the relevant authorities in the tax haven. Cyprus offshore companies are also expected to comply with the countrys laws an file its annual return which must be signed by the company secretary and director. It must be noted that tax haven Cyprus have signed double tax agreement with many foreign countries including the United States, France ,Sweden, China , Canada, and Demark among others. There is no exchange control in place for offshore trusts and offshore companies in the tax haven of Cyprus. This makes it easier to companies to engage in trade. The absence of exchange controls makes the tax haven of Cyprus favorable for the remittance of large sums of funds and also for the transfer of funds.

The low tax haven of Cyprus has favorable conditions which encourage the incorporation of offshore companies, trusts and the opening of offshore bank accounts in the jurisdiction. Offshore corporations and bank accounts can be established by persons of any nationality. The offshore jurisdiction laws of the tax haven are very strict but also allows for the formation of flexible offshore structures. One of the main factors which encourage people to go offshore is the tax savings from which they will benefit. Tax haven Cyprus provides clients with the opportunity to reduce on tax liabilities in a legal manner.

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Tax Haven Cyprus

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Tax Havens offshore services trust services asset …

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Aug 082015


Are you interested in finding out more about the world’s leading financial centers? Do you want to learn about the tax laws governing foreign investment by US taxpayers? Tom Azzara, the author of “TAX Havens of the World” (300 pages) and The Tax Haven Reporter, is based in Nassau, Bahamas, and has been reading and writing about tax havens and tax laws for 20 years.Both publications have been in continuous production since 1985.

Over the last15 years, Tom has registered more than 1,300 International Business Companies (IBCs) in the Caribbean. Anguilla is an ideal tax-free haven for foreign and Americans alike. Offshore banks and offshore companies can trade in the US stock market free of capital gains taxes under the Statutory US tax Code. An IBC can receive US Bank CD interest or treasury bond interest 100% free from all taxes – US and other. Americans who live offshore more than 330 days of the year can exclude up to $80,000 in foreign earned income (i.e., salary) too.

Beginning in 2001, we began forming IBCs out of the Crown Colony/Overseas Territoryand no tax haven of Anguilla – 150 miles east of Puerto Rico. The Anguilla IBC Ordinance of 2,000 has some distinct advantages over the new Bahamas IBC ACT, 2,000. Call me at 514-667-7068, and we’lldiscuss withyou what they are!

We’ve formed more than 290 Anguillian IBCs since the beginning of 2001, as many clients prefer the less overregulated legislation in this British overseas territory.

Have you visited Anguilla? It’s beautiful, and no traffic jams – ever!

“tax offences cannot be investigated”

quote the government of Anguilla (1-1-2001)

Like Montserrats Confidentiality Ordinance of 1985, Anguillas Confidential Relationships Ordinance 1981 provides stringent penalties for the improper release of confidential information, whether by private individuals or public officials.

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Tax Havens offshore services trust services asset …

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Follow the money: inside the world’s tax havens | Business …

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Jun 222015

An employee of Jetpack Cayman demonstrates the sport which costs $359 for half an hour. The jetpack is zero gravity, the Cayman are zero taxes, we are in the right place! said Mike Thalasinos, owner of Jetpack Cayman. Photograph: Paolo Woods and Gabriele Galimberti/INSTITUTE

You, dear reader, are a prolific and casual user of offshore tax havens. Im assuming you dont live in a cave or in a remote hunting community. Even if you did, though, youre probably a dabbler: you have little choice.

Many people, and perhaps youre one of them, share a queasy feeling that something has gone badly wrong with the world economy but cant quite put their finger on what the source of the trouble is. Once you understand the nature of offshore tax havens, you should feel closer to pinning down the answers.

Before I explain what they are, and why powerful governments dont just close them down, I want you to take part in a short challenge. See if you can dodge all my bear traps, and declare yourself untainted by tax havens. If you succeed, you win my Hermit of the Year prize.

Related: Inside the secret world of tax havens in pictures

Do you celebrate Christmas? If you do (or even if you do not), did you buy any gifts on Amazon last December? If so, then your goods were quite likely to have been routed through a byzantine world hosted only on paper, you understand by the Grand Duchy of Luxembourg, where Amazon has located its European headquarters, slashing its tax bills around the world. In 2011, Amazon revealed that the US Internal Revenue Service was chasing it for $1.5bn in back taxes. More recently, Amazon has said it will stop routing its UK sales through Luxembourg.

Perhaps you shun Amazon. You buy only local products: good for you. But did you search for any gifts online? Did a company called Google play any role in this? In 2011, Google shuffled four-fifths of its profits through a subsidiary in the tax haven of Bermuda, cutting its worldwide tax rate in half and its tax rate in some countries to nearly zero. Google boss Eric Schmidt said in 2012 he was very proud of the structure that we set up its called capitalism.

Youve never used Google? OK, lets say you did all your shopping in the real world: traipsing around your local stores, picking up homemade wooden artefacts that you could weigh in your hands. Wonderful. Youre nearly there.

But not quite. Did you listen to any music on those days? Lets hope iTunes wasnt part of that picture. The tech giant Apple achieved what Senator Carl Levin called, in 2013, the holy grail of tax avoidance, setting up offshore corporations legally incorporated in Ireland and the US but for tax purposes, not resident anywhere. Apple shifted $74bn into one of these subsidiaries between 2009 and 2012, paying 2% in tax on it.

Lets cut this challenge short. Did you at any point consume the services of any of these: AIG, Aviva, Barclays, Black & Decker, British American Tobacco, Burberry, Citigroup, Deutsche Bank, Facebook, FedEx, GlaxoSmithKline, Ikea, HSBC, JP Morgan, Microsoft, Pepsi, Skype, Starbucks, Vodafone or Walt Disney? This is just my quirky personal selection from a list of more than 350 multinationals whose convoluted tax schemes were revealed last November by a whistleblower, working for one accountancy firm, PricewaterhouseCoopers (PwC), in one European tax haven, Luxembourg.

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Follow the money: inside the world’s tax havens | Business …

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Tax Havens

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Jun 032015

Offshore tax havens were once associated with very wealthy individuals, which is no longer the case nowadays. More than a decade ago we, a group of lawyers and accountants, started using offshore havens for our own investment purposes. The use of offshore entities in tax havens proved to be a wise and rewarding decision. We started off by providing these same services to friends and family, and then in 2002 we expanded our services, which proved to be a success, because we are still offering very personal services for our friends and families and a large customer base and at low-costs.

We have our sister companies or our lawyers licensed to provide offshore services in all tax havens that we offer, so you can be assured that our services are regulated and in all these districts, strict confidentiality is assured by law.

We sell two several types of tax free or low tax company packages. The International Business Corporation, IBC , the Limited Liability Company, LLC, the UK Limited Liability Partnership and US LLCs.

We offer fast, low cost and professional offshore company incorporation services online in Anguilla, Belize, BVI, Dominica, Gibraltar, Nevis, Panama and Seychelles. We also make sure we have the full range of supplementary services, such as bank accounts in well established banks in Europe and the Caribbean.

We offer offshore trust formation services in Belize and Nevis, two places that, in our opinion, offer best legislation for the trust . The trust is well suited for asset protection and wealth planning.

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FATCA, Tax Havens, American Competitiveness And …

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May 152015

While the Bureaucrat Hall of Fame and Moocher Hall of Fame already exist, the Hypocrite Hall of Fame is just a concept. But once it gets set up, Congressman Alan Grayson of Florida will definitely be a charter member. Here are some passages from a column in the Tampa Bay Times.

U.S. Rep. Alan Grayson, the outspoken, populist Democrat who thunders against Wall Street fat cats,and used to to joke about Mitt Romneys low tax bill, incorporated a couple hedge funds in the Cayman Islands so investors could avoid taxes. Grayson Fund Ltd. and Grayson Master Fund were incorporated in 2011 in the Cayman Islands That was the same year he wrote in the Huffington Post that the IRS should audit every Fortune 500 company because so many appear to be evading taxes through transfer pricing and offshore tax havens.

But apparently Grayson only wants other people to cough up more money to Washington.

Graysons financial disclosure statements indicate he has between $5-million and $25-million invested in the Grayson fund, and he lists no income from it.

The above sentence frankly doesnt make sense. How can Grayson have millions of dollars of personal wealth and not generate any income? The only plausible answer is that hes just as bad at managing his own money as he is at managing the money of taxpayers (he earned an F from the National Taxpayers Union). In any event, Grayson has plenty of company from fellow leftists who also use tax havens.

Including Treasury Secretary Jacob Lew.

And the Presidents top trade negotiator.

Along with big donors to Obama.

Joined by huge donors to Democrats.

Politicians from Massachusetts also are hypocrites. They endorse higher taxes on everyone else, but use neighboring states to protect themselves from oppressive taxation. John Kerry is a prime example, as are run-of-the-mill hacks from the state legislature.

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FATCA, Tax Havens, American Competitiveness And …

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The 10 Biggest Tax Havens in the World – TheRichest

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May 082015

In 2009, the governments of the 20 wealthiest countries in the world vowed that they will tighten the regulations that enabled rampant tax evasions in their own nation and territories. The major problem that these countries faced was the high level of secrecy when it comes to withholding the financial assets of clients from the authorities. However, two years later, despite the increase in such regulations, people were still left with a great number of countries to choose from that will allow them to evade their taxes through the use of offshore accounts. This was according to a report made by the Tax Justice Network.

The report, which the Tax Justice Network referred to as the Financial Secrecy Index, assessed 73 different jurisdictions around the world that allowed billions of foreign currency to be stored in offshore accounts. The money that was deposited into these accounts were also left untaxed. The report found that governments worldwide lose approximately $250 billion in revenue every year because of these offshore accounts.

This list is comprised of the 10 biggest tax havens in the world countries that allow the highest level of client financial secrecy, tax evasion, and offshore accounts.

Bahrain, situated near the Persian Gulfs western shores, is a small island-country. The archipelagos largest island is Bahrain Island. While there are plenty of financial institutions offering offshore banking services and bank accounts in the island, its client financial secrecy is the lowest of all the other nations included in this list. Bahrain gets tenth place because it has the lowest level of Financial Secrecy Index value based from the Tax Justice Networks report, which is at 660.3. It also has a Secrecy Score of 78.

Germany makes it easy for people to open offshore bank accounts. However, this has also resulted in the increasing number of individuals opening such accounts so they can evade their taxes. The good news is that the country is trying to control this problem through the implementation of stricter and much more stringent policies. In the report, Germany got a score of 669.8 for its Financial Secrecy Index value, and a Secrecy Score of 57.

Many of the offshore banks in Japan do not subject the deposits made by their clients to interest rate standards and regulations. Fortunately, with the offshore banking center that has been established in Tokyo, the countrys law enforcement authorities would at least be able to monitor and control any developments in these financial institutions.

Jersey is a British Crown Dependency that houses a great number of banks offering offshore accounts to foreign clients. Offshore banking and investments has been a part of the bailiwicks underground economy. In the Tax Justice Network report, Jersey got a Financial Secrecy Index value of 750.1 and a Secrecy Score of 78.

Singapore, an island city-state in Southeast Asia, is considered by many as one of their best choices for opening offshore bank accounts. Almost anyone can open such a bank account without experiencing any hassle. This is one of the major reasons why Singapore was graded with a Financial Secrecy Index value of 1,118 and a Secrecy Score of 71 by the Tax Justice Network.

The states of Nevada and Wyoming are two of the major contributing factors to the countrys increasing problems in terms of tax evasion. In Nevada, there are no capital gains, gift tax, personal income tax, and inheritance tax. In Wyoming, there are no corporate taxes, inventory taxes, unitary taxes, gift taxes, estate taxes, personal income taxes, franchise taxes, and inheritance taxes.

In the Peoples Republic of China, there are two Special Administrative Regions, with Hong Kong being one of them. It is located at the south coast of China and is surrounded by the South China Sea and the Pearl River Delta. Seven million people live in the region. Aside from being a popular tourist hot spot, Hong Kong is also a haven for people who do not want to pay their taxes and deposit large amounts of money in offshore accounts. Here, clients do not have to pay for sales taxes, capital gains, and payroll taxes. They also do not have to worry about personal tax being deducted from their money.

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The 10 Biggest Tax Havens in the World – TheRichest

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Colorado eyes ballot question to collect from corporate tax havens

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Apr 142015

Voters this November could determine whether corporations doing business in Colorado must report and pay state taxes on profits funneled into offshore tax havens.

Doing that would create a tax windfall of up to $150 million a year, according to a legislative analysis.

Rep. Brittany Petterson, D-Lakewood, and Rep. Mike Foote, D-Lafayette, sponsors of legislation to put the issue on the ballot, want that money earmarked for schools.

“When corporations don’t pay their taxes, kids pay the price,” said Kerrie Dallman, a high school social studies teacher in Jefferson County and president of the Colorado Education Association.

House Bill 1346 is scheduled to be heard before Colorado House of Representatives’ Finance Committee Wednesday afternoon the day income taxes are due.

“There are some corporations that don’t pay their taxes like the rest of us, unfortunately,” Foote said. “But they do get a chance to use our roads and take advantage of educated folks who work in their businesses, courts for dispute resolutions and so forth. They just don’t pay for that.”

The liberal-leaning Colorado Public Interest Research Group released a report Tuesday that indicates each small businesses in Colorado would have to pay an extra $3,165 annually to make up the money lost to corporate tax havens.

More than 300 Colorado small businesses have endorsed the bill asking for a vote.

“This bill will simply ensure that big corporations that should be paying their fair share restore funding to our state and back to our kids in their classrooms,” Petterson said.

Montana and Oregon have passed laws demanding a share of taxes from offshore accounts located in such places as the Cayman Islands, Bermuda, Luxembourg, the Isle of Man and the British Virgin Island.

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Twenty-eight English clubs are now owned overseas, increasing the risk of tax avoidance

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Apr 142015

Twenty-eight clubs in the English top four divisions are now substantially owned overseas. Photograph: The Guardian

Almost one in three of the 92 Premier and Football League clubs are now substantially owned overseas, including in offshore tax havens, leading to the English football leagues being accused of allowing ownership structures of clubs that could be used for tax avoidance. Research into the ownership of all the clubs by the Guardian and the campaign group the Tax Justice Network has found 28 clubs with a substantial shareholding overseas, including nine of the 20 Premier League clubs.

The Tax Justice Network, which has produced its own report, The Offshore Game, argues the ownership of football club shares via offshore companies means there is huge potential for tax avoidance when the clubs are sold. There is no suggestion any particular club or owner has engaged in tax avoidance; however, owners residing abroad, who hold shares in clubs through companies registered overseas, may not be liable for UK capital gains tax currently 28% for higher rate, wealthier, tax payers on the profits they make when they sell a club. The huge rise in offshore ownership of clubs, which were almost all UK-owned until the wave of overseas buyers moved in around a decade ago, has coincided with steepling increases in television rights and the value of clubs, in the Premier League, and in the Championship for clubs with a prospect of promotion. The ownership of billions of pounds worth of assets through offshore shell companies means there is a huge potential for tax avoidance, said George Turner, author of the Tax Justice Networks report. This should be of great concern to fans around the country, who invest so much time, commitment, emotion and money into their clubs.

Football is not just another business and tax havens have no place in our national game, whatever the reason an owner may have for using them.

While many of the clubs are not owned via shell companies and their locations reflect the nationalities of the businessmen who have bought the clubs including Sheikh Mansour, the Abu Dhabi-based owner of Manchester City, the Malaysian owners of Queens Park Rangers and Venkys, the Indian poultry company which owns Blackburn Rovers other clubs are owned in a variety of countries widely recognised as tax havens. The Cayman Islands feature in the ownership of four clubs: Manchester United, now registered there; Birmingham City, Coventry City and Cheltenham Town.

United was re-registered in the Cayman Islands when the club was floated on the New York stock exchange in 2012, and company documents state the club is now owned by family trusts affiliated with the Glazer family, via companies registered in the US state of Nevada. United and the Glazers have never explained why they employ this structure and did not respond to questions about it from the Guardian.

Related: Why are English clubs owned overseas? Their responses

The American businessman Stan Kroenke holds his 66.8% of Arsenal via a corporation, KSE UK Inc, registered in Delaware, sometimes referred to as the tax haven state of the US, because of the anonymity it affords shareholders and its taxation laws.

The club declined to say whether this means no capital gains tax will be payable if Kroenke sells his stake at a profit but he has always been described as committed to owning Arsenal in the long term and not intending to sell.

Fenway Sports Group and Randy Lerner, the US owners of Liverpool and Aston Villa respectively, declined to say in which US state their ownership companies are registered. Ellis Short, the American owner of Sunderland, still owns the club via the Jersey company, Drumaville, which the previous Irish investors, associates of the former chairman Niall Quinn, used as their ownership vehicle. A Fulham spokesperson said Shahid Khan, the clubs American owner, will shortly fold the British Virgin Islands company previously owned by Mohamed Al Fayed, and the ownership structure will become fully UK-based.

Twenty-eight English clubs are now owned overseas, increasing the risk of tax avoidance

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Almost a quarter of UK firms 'whittle down tax bills' using tax havens and loopholes, says new analysis

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Apr 142015

By City & Finance Reporter for the Daily Mail

Published: 17:06 EST, 13 April 2015 | Updated: 17:06 EST, 13 April 2015

Almost a quarter of British firms are paying far lower taxes than the rates demanded by the countries in which they operate, an international study has suggested.

Analysis of more than 1,000 listed companies by MSCI found a tax gap of 56billion from firms using tax havens and loopholes to whittle down their bills.

By comparing the overall tax payments of the companies against the corporation tax rates levied in the countries where they did business, the investment research group was able to determine how many companies were scrimping on payments.

Tax loophole: Almost a quarter of British firms are paying far lower taxes than the rates demanded by the countries in which they operate, an international study has suggested

In the UK, 16 of the 71 included businesses had a tax gap of more than 10 per cent, it said.

MSCI director Linda-Eling Lee said these firms faced the prospect of falling profits if the tax loopholes were closed, as well as reputational risk if they are exposed for minimising tax.

The findings will inflame the debate around the issue of legal but dubious avoidance of tax.

The Government has sought to lead an international crackdown on what it sees as immoral tax dodging by multinational firms.

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Report: Closing loophole could add $79M in tax revenue

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Apr 142015

By Colleen Quinn

State House News Service

BOSTON — Massachusetts could collect an estimated $79 million in additional annual tax revenue if the state tax code was changed to close the “water’s edge loophole” that allows multi-national companies to avoid paying state corporate taxes, according to a new report.

Small businesses wind up shouldering a larger tax burden because of the loophole, according to lawmakers pushing state tax code changes.

“As tax day approaches it is a good time to be reminded of how ordinary taxpayers and specifically small businesses pick up the tab for offshore tax loopholes used by many multi-national corporations,” Deidre Cummings, legislative director for MASSPIRG, said at a State House press conference Tuesday where the group’s report was released.

In 2014, the average small business in Massachusetts would need to pay an additional $4,031 in state and federal taxes to make up for the foregone tax revenue due to offshore tax havens, according to the report, entitled “Picking Up the Tab: Small Businesses Pay the Price of Offshore Tax Havens.”

Rep. Josh Cutler, D-Duxbury, and Sen. Mark Montigny, D-New Bedford, filed bills (H 2477/SD 1699) requiring multi-national corporations to treat profits made in Massachusetts, and deposited overseas, as domestic taxable income. Under a 2008 state law, corporations use a formula using payroll, property and sales to calculate Massachusetts corporate taxes, according to Cummings.

“This is the logical extension of what we did in 2008,” Cutler said.

Oregon and Montana have passed similar laws, and Colorado is contemplating a similar proposal, according to MASSPIRG.

Rep. Leonard Mirra, a Republican from West Newbury and small business owner, said when large profitable corporations hide profits overseas it raises the property taxes of homeowners who are forced to pay more for local services.

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Report: Closing loophole could add $79M in tax revenue

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Vatican to share information

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Apr 142015

Vatican City signed an information sharing agreement with Italy earlier this month. The move will force the Vatican’s bank, known as the Institute for Works of Religion or IOR, to co-operate with moves by the Italian authorities to crack down on international tax evasion.

The IOR’s purpose is to hold funds for the Catholic Church. For many years it has implored its right to manage Church funds away from the prying gaze of tax investigators. However the bank has been subject to growing international criticism for allowing well connected individuals to hold accounts and exploit the reverence of the Church as a cover for tax evasion and financial crimes.

The sharing agreement will allow access to IOR’s information back to 2009. As the first agreement of its kind for the Vatican it is a significant step towards making its finances more transparent. Italy has recently made similar agreements with several other countries traditionally considered tax havens.

It is anticipated that information sharing under the agreement will be largely one sided as Italy is expected to be the predominant party requiring information. The move is symptomatic both of Pope Francis’ focus on transparency and the pressure exerted by the Italian authorities to prevent Italian banks from doing business with the IOR.

This is part of a global action targeting tax evasion and creating a new global standard led by the OECD. The objective is the elimination of overseas tax havens through transparency and the exchange of information. One mechanism the OECD uses to achieve this is through the use of bilateral tax information exchange agreements. The OECD provides two model agreements for these purposes.

New Zealand currently has twelve such treaties in force and more in negotiation. They enable a full exchange of information on civil and criminal tax matters. This allows Inland Revenue access to more information from our treaty partners which include the Cayman Islands, Gibraltar and the Marshall Islands.

More developments are expected in this area as it is a focus of both the New Zealand government and the global community.

Greg Harris is a specialist tax partner in the Hamilton office of Deloitte.

– Stuff

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15 Fortune 500 companies paid no federal income taxes in 2014

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Apr 122015

Amid calls for a major overhaul of the federal tax system, a new study shows that 15 major Fortune 500 companies avoided paying taxes on $23 billion in profits in 2014.

Moreover, these companies — including CBS Corporation, Mattel, Prudential and Ryder System — paid almost no federal income tax on $107 billion over the past five years.

According to the study by Citizens for Tax Justice, all but two of the companies received federal tax rebates last year. And almost all paid exceedingly low effective tax rates over five years.

There was nothing illegal or improper about what these companies did. They were merely taking advantage of major corporate tax loopholes and provisions long part of the fabric of the U.S. tax code.

While recent policy discourse has focused on multinational corporations that use offshore tax havens to minimize their tax liability, the companies profiled here appear to be using a diverse array of other tax breaks to zero out their federal income taxes, the new study stated.

For instance,Jetblue, PG&E, PEPCO Holdingsandthe Ryder truck rental serviceallused accelerated depreciation, a tax break that allows companies to write off the cost of their capital investments much faster than these investments wear out, to dramatically reduce their tax rates. CTJ estimated that closing the popular accelerated depreciation loophole could raise more than $428 billion for the government over the next decade.

Pricelinerelied heavily on a single tax break writing off the value of executive stock options for tax purposes to zero out its tax liability. Qualcommhas enjoyed more than $290 million in research and development tax breaks over the past three years.

As Congress focuses on strategies for revamping the U.S. corporate income tax, a sensible starting point should be to critically assess the costs of each of these tax breaks and to take steps to ensure that profitable corporations pay their fair share of U.S. taxes, the study stated.

The Obama administration and House and Senate Republican leaders have repeatedly voiced interest in corporate tax reform this year to spur economic growth by reducing excessive tax rates, eliminating costly loopholes and encouraging multinational corporations to pay taxes on profits currently being sheltered overseas.

In mid-February, Rep. Paul Ryan (R-WI), the new House Ways and Means Committee chair, laid out an ambitious agenda for his tax-writing and fiscal policy committee for the coming two years — including what he hopes will be the first big phase of comprehensive tax reform by late summer. .

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Accounting giants say corporate tax advice is within the law

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Apr 112015

Major accounting firms say they are not doing anything illegal in helping corporations to minimise tax liabilities.

KPMG’s managing partner Rosheen Garnon faced the second day of the Senate inquiry into tax avoidance, which has so far heard Australia is missing out on billions of dollars in tax every year through avoidance and the use of loopholes.

“When we give advice and it relates to structuring it is done within the law, we always act within the law,” he said.

Senator Christine Milne raised concerns that KPMG and other major accounting firms advertise their abilities to aggressively minimise tax for clients.

“What these companies are doing is legal,” rebutted Ms Garnon.

She went on to repudiate suggestions by Senator Milne that the company’s offices in tax havens are acting immorally.

“If the clients have a commercial reason to be there, we will be there,” Ms Garnon added.

Google, Apple, Newscorp and Microsoft conceded to the inquiry yesterday that they do send Australian revenue offshore to more tax effective jurisdictions, but all insisted what they are doing is legal.

Microsoft admitted that the $2 billion it makes in Australia annually goes straight to Singapore, where the company tax rate is significantly lower.

Ernst and Young partner Rob McLeod told the committee Australias best bet was to keep working on multilateral tax reform through the OECD.

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KPMG says all its corporate tax advice is within the law

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Apr 112015

Major accounting firms say they are not doing anything illegal in helping corporations to minimise tax liabilities.

KPMG’s managing partner Rosheen Garnon faced the second day of the Senate inquiry into tax avoidance, which has so far heard Australia is missing out on billions of dollars in tax every year through avoidance and the use of loopholes.

“When we give advice and it relates to structuring it is done within the law, we always act within the law,” he said.

Senator Christine Milne raised concerns that KPMG and other major accounting firms advertise their abilities to aggressively minimise tax for clients.

“What these companies are doing is legal,” rebutted Ms Garnon.

She went on to repudiate suggestions by Senator Milne that the company’s offices in tax havens are acting immorally.

“If the clients have a commercial reason to be there, we will be there,” Ms Garnon added.

Google, Apple, Newscorp and Microsoft conceded to the inquiry yesterday that they do send Australian revenue offshore to more tax effective jurisdictions, but all insisted what they are doing is legal.

Microsoft admitted that the $2 billion it makes in Australia annually goes straight to Singapore, where the company tax rate is significantly lower.

Ernst and Young partner Rob McLeod told the committee Australias best bet was to keep working on multilateral tax reform through the OECD.

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KPMG says all its corporate tax advice is within the law

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