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Exchange in the context of finance often conjures up images of busy trading floors where traders gesticulate and shout in deafening din. In the world of Bitcoin, things are much quieter. The Bitcoin exchanges, as many of them are, can be little more than a website and a piece of program running behind it. Many of these exchanges, often registered in offshore tax havens such as British Virgin Islands, dont have much of a physical existence.

Given how new Bitcoin is, it may not be surprising that the Bitcoin exchanges at large resemble the banking industry in the early days a little bit They often fail. This year, the industry is stigmatised by the fall of Mt. Gox, the longest lasting and erstwhile largest Bitcoin exchange based in Tokyo, Japan. In the aftermath, there was a wave of criticism of incumbent exchanges, which were referred to as single point of failure. Contrary to the popular demand, however, the single point of failure persisted. On the ruins of the failed Mt. Gox, new exchanges emerge and many prosper. Among them, China-based OKCoin and Huobi impress many with their meteoric rise from obscurity.

Both Huobi and OKCoin, the largest Chinese exchanges, had been questioned over the veracity of their claimed trading volumes. After one of the first accusations being reported by Bitcoin news website CoinDesk last year, despite consistent denials from these exchanges,similar suggestions popped up fairly regularly on the social media. However, skepticism notwithstanding, the China-based exchanges, exemplified by the two aforementioned, are making strides. Both have grown from nothing to be relatively large companies within a period of a year Both Huobi and OKCoin have over 150 employees each. Both appear to be on solid ground financially, at least judging by the way they spend and speed of expansion. In a recent interview, OKCoins CEO Star Xuconfirmed that his company had been profitable.

From left to right: Yan Chuan, Elon Zhao, Mike Gropp

All these lead to a question: Are the Chinese exchanges, despite their shortcomings, possess some special quality that makes them more successful?

Will Chinese Exchanges Dominate The World?

In a high-rise office building in Sanyuanqiao, Chaoyang district in Beijing, I met Elon, Mike, and Yan Chuan, three cofounders of BitBays, a new Bitcoin exchange. I first met Mike and Elon at the Shanghai Bitcoin Expo a week before, where they gave a presentation. Although a secure and globalized Bitcoin exchange sounded to me just vanilla marketing talk, I was curious as to how they implemented the concept. I was also interested to learn what they have to say about the exchange environment as well as other questions that many are concerned with.

I started the interview by asking what are the competitive advantages and disadvantages of the large Chinese exchanges such as Huobi and OKCoin. Acknowledging the success of the two, Elon listed three factors that he believed are behind the growth: The appeal of zero-fee, general lack of speculative assets in China and a highly developed Internet industry.

In spite of these advantages, Elon didnt believe that any of the two, in their current shape, stand much of a chance to be global leaders. First, there is the negative image associated with being Chinese. It is like an American sees an Arabic exchange or a North Korea exchange. Then, Chinese companies generally performed badly in terms of globalisation. Elon cited the example of WeChat: despite its phenomenal success in China, the mobile communication app remains a Chinese phenomenon. It is hard to imagine that a Bitcoin exchanges can do what Tencent, a much larger and deeper-pocketed company, cant.

However, Elon believed BitBays had the advantage as a late-starter. The company had little burden; it would be much harder to switch direction when you are halfway in the journey. Elon compared BitBays that he envisioned with is the worlds largest online Bitcoin wallet service. Headquartered in Luxembourg, the wallet provider has employees distributed in many countries across the globe. According to an email reply from Roger Ver, cofounder of People help from Blockchain from all over the world. North and South America, Europe, Asia, and even South America. I dont think we have anyone in Africa yet though.

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Interview With BitBays – A Bitcoin Exchange That Tries To Make A Difference

September 17, 2014

Plansfor a major rewriting of international tax rules unveiled onTuesday could eliminate structures that have allowed companies likeGoogle Inc and 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.

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New global plans unveiled to crack down on corporate tax avoidance | Business Recorder

Published May 20. 2014 4:00AM

Top American companies including pharmaceutical giant Pfizer Inc. are saving at least $550 billion in taxes by holding profits in overseas tax havens, according to a report Monday by the advocacy group Citizens for Tax Justice.

The report said 28 U.S. corporations acknowledge paying less than 10 percent in taxes on foreign holdings totaling $409 billion. Pfizer, which the report said has subsidiaries in Bermuda, the Cayman Islands, Ireland, the Isle of Jersey, Luxembourg and Singapore, “does not disclose how much of its $69 billion in offshore profits are stashed in these tax havens.”

“Corporations exploit all manner of loopholes to avoid paying their fair share, and then they get their lobbyists and allies on Capitol Hill to say this tax dodging is justified because the U.S. corporate income tax rate is too high,” Robert McIntyre, director of the advocacy group, said in a statement.

But McIntyre said U.S. corporate tax rates are not much different from those in other developed countries, where these corporations make most of their profits.

In addition to New York-based Pfizer, the report looks into a variety of multinational corporations from all 50 states.

In Connecticut, General Electric, United Technologies, Praxair, Xerox,, Terex, Pitney Bowes and W.R. Berkley are among the companies placing money in foreign accounts to save on taxes.

The report said U.S.-based Fortune 500 corporations are holding profits of nearly $2 trillion in offshore accounts.

“While congressional hearings over the past few years have focused attention on the tax avoidance strategies of technology corporations like Apple and Microsoft … a diverse array of companies (is) using offshore tax havens,” the report said.

Among these are U.S. Steel, pharmaceutical marketer Eli Lilly, apparel maker Nike, financial powerhouse American Express, gaming empire Wynn Resorts and banking giant Bank of America.

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Pfizer, other companies accused of dodging taxes

May 122014

A weekly column that puts the fun into learning

Lets admit it. Most of us get a little thrill out of finding new ways to save taxes. This is exactly what corporate biggies such as Google, IBM and Amazon have been doing too. Theyve been cleverly routing their global profits through subsidiaries set up in destinations called tax havens. This has been going on for long. But, having been denied their fair share of taxes, governments are now cracking the whip.

What is it?

Tax havens are countries that have low or near-zero tax rates, especially for some kinds of transactions. Switzerland, Singapore, Hong Kong and Mauritius are the popular ones. But the list includes others such as Luxembourg, British Virgin Islands, Cayman Islands, the Netherlands and Bermuda too.

Multinationals set up their holding companies in these locations which then invest in operations located at other high-tax locations. So, even as the company carries out its real business in a high-tax regime such as the US or India, its able to dodge the taxman by showing a large share of profits as emanating from a tax haven.

But its not just companies; tax havens have something on offer for rich individuals too, promising complete confidentiality. Now youre wondering if everything about tax havens is so clandestine, why havent they been banned at the outset? Well, this is not how things were meant to be. When tax havens first sprang up, they came up in small countries endowed with limited natural resources or other competitive advantages. Such nations saw near-zero tax rates as a good way to attract reluctant foreign capital. But with corporations and affluent individuals taking advantage of the secrecy to save taxes, the whole thing went awry.

Why is it important?

Irked by tax revenue losses, governments have now begun to come down heavily on the menace of tax havens, threatening to revoke tax treaties and demanding more disclosures from them. In India, the phenomenon of routing black money to tax havens has given birth to what is called round-tripping. Foreign direct inflows from Mauritius, Indias second biggest source, totalled $4.5 billion during April-Feb of the last fiscal. But is the tiny island nation really such as industrial powerhouse? Not really. Cynics suspect a large part of the investment flowing in from Mauritius is actually Indian money sent abroad and routed back to avoid taxes. If its Mauritius for us, its British Virgin Islands for UK and Luxembourg for Russia.

The worry is that the anonymity that tax havens offer allows other kinds of illegal activity to flourish too. The world over billions made through illegal routes such as drug trafficking and arms smuggling are said to be laundered through tax havens.

Why should I care?

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All you wanted to know about

Friendly game Luxembourg-Cape Verde Islands

By: Sasa Greorgiev

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Friendly game Luxembourg-Cape Verde Islands – Video

WASHINGTON The largest U.S.-based companies added $206 billion to their stockpiles of offshore profits last year, parking earnings in low-tax countries until Congress gives them a reason not to.

The multinational companies have accumulated $1.95 trillion outside the U.S., up 11.8 percent from a year earlier, according to securities filings from 307 corporations reviewed by Bloomberg News. Three U.S.-based companies Microsoft, Apple and IBM added $37.5 billion, or 18.2 percent of the total increase.

“The loopholes in our tax code right now give such a big reward to companies that use gimmicks to make it look like they earn their profits offshore,” said Dan Smith, a tax and budget advocate at the U.S. Public Interest Research Group, which seeks to counteract corporate influence.

Even as governments around the world cut tax rates and try to keep corporations from shifting profits to tax havens, Congress remains paralyzed in its efforts. The response of U.S.-based companies over the past few years has been consistent: book profits offshore and leave them there.

Congress hasn’t acted because of disagreements over whether to be tougher on U.S. companies operating abroad amid broader disputes over government spending and taxation. The stalemate has prevented the U.S. from tapping a pot of money that President Barack Obama and the top Republican tax writer in Congress have eyed for such projects as rebuilding highways.

Meanwhile, the companies are deferring hundreds of billions of dollars in U.S. taxes as they lobby to end a system they describe as a competitive disadvantage in world markets. The top 15 companies now hold $795.2 billion outside the U.S., up 10.6 percent.

That increase was slower than the 15.9 percent rise in stockpiled profits those same companies had the previous year. Pfizer reported a decrease in offshore profits this year, and General Electric and Citigroup each reported growth of less than 3 percent.

The Bloomberg analysis covers the two most recent annual filings from 307 companies in the Standard & Poor’s 500 Index. It excludes purely domestic corporations, those that don’t disclose offshore holdings, companies with headquarters outside the U.S. and real estate investment trusts that aren’t subject to corporate taxes.

The increase in profits held outside the U.S. has been particularly large and steady at technology companies, many of which have moved patents and other intellectual property to low- tax locales.

U.S. multinational companies reported earning 43 percent of their 2008 overseas profits in Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland, more than five times the share of workers and investment they have in those jurisdictions, according to a 2013 Congressional Research Service report.

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Cash abroad rises to $206B as Apple to IBM avoid taxes

Watch Cape Verde Islands v Luxembourg – live Football streaming – Friendly
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WASHINGTON: The U.S. has expanded its action against tax cheaters to countries such as India, Israel and Liechtenstein, a top U.S. official told lawmakers. So far, the U.S. action was primarily focused against tax cheaters on Switzerland. “While the (Justice) Department’s initial efforts and this hearing have focused on Switzerland, we have expanded our investigations to go after tax cheats and the banks assisting them in India, Israel, Liechtenstein, Luxembourg, and several Caribbean countries,” the Deputy Attorney General, James M Cole, told a Congressional committee.

Since 2009, the Department has publicly charged 73 account holders and 35 professionals with violations arising from their offshore banking activities, and 72 individuals have pleaded guilty or were convicted at trial, he said. “Just as importantly our enforcement efforts have driven over 43,000 taxpayers with secret offshore accounts to identify themselves to the IRS, disclose their offshore accounts, and to pay a total of over $6 billion in back taxes, penalties and interest. And that number is growing,” he said.

Cole said in 2013, the Department obtained four separate orders authorizing the Internal Revenue Service (IRS) to issue John Doe summonses seeking records from banks in the U.S. for the U.S. correspondent accounts of banks located in the Caribbean, Switzerland, and other European countries and America has successfully compelled account holders to provide the U.S. with personal records of their foreign banking activities.

Since the UBS deferred prosecution agreement in February 2009, the Department has taken public action against two other banks, he said, adding that in January 2013, Wegelin Bank, one of the oldest financial institutions in Switzerland, pleaded guilty to conspiracy to defraud the U.S. and was ordered to pay substantial fines and to forfeit funds.

“As a result of its criminal conviction, Wegelin was forced to close its doors, which sent a shockwave through the community of banks and bankers in Switzerland that had been engaged in facilitating U.S. tax evasion. In July 2013, Liechtensteinische Landesbank AG entered into a non-prosecution agreement, and paid substantial fines,” he said. What is particularly notable about this case is that we were able to have Liechtenstein actually change its bank secrecy laws retroactively. This enabled the department to obtain files relating to non-compliant U.S. account holders,” he said. “In August 2013, the department publicly stated that 14 banks have been authorized for investigation concerning the use of Swiss bank accounts. This is in addition to on-going investigations concerning cross-border activities by banks in India, Israel, Liechtenstein, Luxembourg, and several Caribbean countries,” Cole added.

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U.S. Expands Investigations Against Offshore Tax Evasion To India, Israel

Bulgarians hold an anti-corruption demonstration in front of the country’s parliament building in the capital Sofia (file photo)

Bulgarias parliament has passed a law outlawing offshore firms from 28 economic sectors in an attempt to fight shady company ownership, tax fraud and money laundering.

The law adopted on Friday would ban companies registered in offshore zones from applying licenses as banking, credit, insurance, or as mobile-phone operators.

In addition, the offshore companies would be excluded from participation in public procurement, privatization deals and from acquiring shares in professional clubs, newspapers, radio and television operators and polling agencies.

Those companies, which have shares that are traded on the regulated Bulgarian market or another European Union market would be exempt from the new legislation.

The law comes into force on January 1, 2014, and follows intensive debates about the alleged involvement in offshore companies of several top officials.

According to lawmaker Rumen Gechev, offshore companies in Cyprus have an estimated 2.2 billion euros of Bulgarian capital, followed by Luxembourg with 1.6 billion euros and Switzerland with 1.2 billion euros.

Meanwhile, Bulgaria has seen a number of anti-corruption protests in recent months, in which the demonstrators have called for an overhaul of the countrys political system.

Last month, students rallied in 15 universities across Bulgaria, calling on Prime Minister Plamen Oresharskis cabinet to quit over allegations of corrupt ties with business groups.

In October, university students occupied the main building of St Kliment Ohridski University in the capital Sofia, demanding an end to political corruption in the country.

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Bulgaria passes offshore companies act

Missing in all the partisan screaming and yelling about federal budget deficits and borrowing limits is any coherent talk about finding more tax revenue and a measure of equity for ordinary taxpayers.

Michigan Sen. Carl Levin has stepped up to the challenge. He introduced the Stop Tax Haven Abuse Act, Senate Bill 1533, to close offshore corporate tax loopholes.

Levin estimates the legislation would raise $220 billion over a decade. That is enough money to push back the across-the-board cuts of sequestration, he explained Wednesday in a telephone conference call.

As chair of the Senate Permanent Subcommittee on Investigations, Levin knows all the scams and devices of offshore corporate-tax avoidance and evasions.

Research found 30 U.S. companies with $160 billion in profits had paid no taxes during a three-year study period. More than $1.3 trillion stashed offshore can be traced to 20 companies.

Levin also knows that when all the ruses are employed the tax burden falls on domestic companies, small business and families.

The senators bill, which has three Democratic sponsors so far, would go after the process of transferring lucrative intellectual property to tax havens. He would end tax deductions for companies that move production and jobs offshore and receive deductions to build and operate the new plants though none of the foreign profits are taxable.

Corporate profits get recycled and parked overseas, then repatriated via loans and other devices that make the eyes of accountants and lawyers glisten.

Another approach Levin does not favor is a territorial-tax system. It creates even more incentives to shift profits around the globe, avoid U.S. taxes and move more jobs overseas.

Americans for Tax Fairness cites a Congressional Research Report that American companies report earning 43 percent of overseas profits in five countries: Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland tax havens where the companies have scant employment or foreign investments.

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Legislation to curb foreign tax havens would bolster budget

If the G-8 gets serious, there could be a crackdown on offshore tax destinations.

It seems to be the time for sportsmen to be in the news for non-sporting reasons. The news that has stunned the world is Lionel Messi defrauding the Spanish government of 4.16 million ($5.53 million) in unpaid taxes on income from companies that used his image to promote themselves.

The prosecutors lawsuit said that Messi, who plays for FC Barcelona, had arranged for 10.17 million, earned from image rights between 2007 and 2009, to be paid directly to shell companies in Belize and Uruguay. The suit alleged that Messi later received the money through British and Swiss channels, but failed to declare it as income.

The footballer said that his tax consultants would handle the situation, and there has been no tax fraud. Messis name is the latest addition to the list of names Apple, Starbucks, Google, Amazon and the President of Bayern Munich, Uli Hoeness being circulated for tax evasion. Irrespective of whether his consultants bail him out of this or not, his iconic image will certainly ensure that the case is resolved by him paying up the dues.

One of the interesting definitions of a shell company is that it is a non-trading firm formed and often listed on a stock exchange to raise funds before starting operations, attempting a takeover, going public, or as a front for illegal business. It is apparent that the last possibility is most popular among shell companies. A tax haven is a country that offers foreign individuals and businesses little or no tax liability in a politically and economically stable environment. Tax havens also provide little or no financial information to foreign tax authorities.

Individuals and businesses that do not reside in a tax haven can take advantage of these countries’ tax regimes to avoid paying taxes in their home countries. Tax havens do not require an individual to reside in, or a business to operate out of that country to benefit from its tax policies. Shell companies and tax havens are killer combinations. Past attempts by Governments to crackdown on tax havens have been weak-kneed and largely unsuccessful. No one can force a nation or an island not to be a tax haven; this is a matter of choice. The only hope the taxman has is that information on accounts in these tax havens would be shared.

The meeting of the G-8 this week in Northern Ireland focussed on cracking down on tax dodging. Germany, France, Britain, Italy and Spain are likely to develop a system that will make it easier to clamp down on tax evaders by automatically exchanging information among them.

The five countries said the mechanism was inspired by US Foreign Account Tax Compliance Act (FATCA), under which foreign banks must inform the US when Americans open accounts and transfer money into their branches. It could serve as a template for a wider multilateral agreement.

Luxembourg, home to one of the world’s largest investment-fund industries with $3.2 trillion under management, said that it would start exchanging information with the rest of the EU about European bank-account holders in the Grand Duchy starting 2015.

Not content with being a mere spectator, India has approached over half a dozen foreign jurisdictions, including Singapore and some tax havens, for banking and other financial details of more than 500 individuals and entities that might have secret offshore accounts at those places.

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Tax havens may soon lose their charm

June 17, 2013

The 50 largest Europeancompanies are all heavily present in tax havens with an average of117 offshore subsidiaries each, a French NGO said on June 12. Thereport by non-governmental organisation CCFD-Terre Solidaire andCERAS, an organisation that analyses social issues, comes afterFrance’s government pledged to act against tax havens in the lightof a tax fraud scandal.

CCFD went through the accounts and activity reports of the listed companies, which include the banks HSBC, BNP Paribas and Deutsche Bank, carmakers such as Peugeot and Volkswagen as well as Siemens and Vodafone.

It found that all of the 50 companies – the biggest in Europe by turnover – were present in tax havens with the number of subsidiaries there accounting for 29 percent of their overall subsidiaries abroad. “Just in the Cayman Islands, they have more subsidiaries than they have in Brazil and twice as many as in India. And in Luxembourg nearly as many as in China,” said the report, titled “In the paradise of lost taxes”.

“While this does not constitute proof of tax evasion, this massive concentration of offshore subsidiaries goes hand-in-hand with an opacity in accounting that makes it hard to localise the 208-billion-euro ($277-billion) profits of these firms in 2012.”

The two organisations called on G8 nations, which are meeting in Northern Ireland next week, as well as on the rich and emerging countries of the G20, to take measures to fight the trend.

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Biggest European groups are big in tax havens: NGO | Business Recorder

(PARIS) – The 50 largest European companies are all heavily present in tax havens with an average of 117 offshore subsidiaries each, a French NGO said on Wednesday.

The report by non-governmental organisation CCFD-Terre Solidaire and CERAS, an organisation that analyses social issues, comes after France’s government pledged to act against tax havens in the light of a tax fraud scandal.

CCFD went through the accounts and activity reports of the listed companies, which include the banks HSBC, BNP Paribas and Deutsche Bank, carmakers such as Peugeot and Volkswagen as well as Siemens and Vodafone.

It found that all of the 50 companies — the biggest in Europe by turnover — were present in tax havens with the number of subsidiaries there accounting for 29 percent of their overall subsidiaries abroad.

“Just in the Cayman Islands, they have more subsidiaries than they have in Brazil and twice as many as in India. And in Luxembourg nearly as many as in China,” said the report, titled “In the paradise of lost taxes”.

“While this does not constitute proof of tax evasion, this massive concentration of offshore subsidiaries goes hand-in-hand with an opacity in accounting that makes it hard to localise the 208-billion-euro ($277-billion) profits of these firms in 2012.”

The two organisations called on G8 nations, which are meeting in Northern Ireland next week, as well as on the rich and emerging countries of the G20, to take measures to fight the trend.

Text and Picture Copyright 2013 AFP. All other Copyright 2013 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.

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Biggest European groups are big in tax havens: NGO

IN THESE trying times of market turmoil, high unemployment and great inequality, economic freedom is touted as the panacea for all the worlds wrongs by outfits such as South Africas Free Market Foundation (FMF) and the USs Heritage Foundation.

They argue and I largely agree that if you leave people to their own devices and allow them to make the most of their talents and abilities and free them, as far as possible, from the encumbrances of red tape, they will do well individually. Society will then, as a whole, be better off economically.

But is this hypothesis borne out by the data?

The Washington-based Heritage Foundation has a clear ideological founding principle, encapsulated in the opening statement on its website which states that “when institutions protect the liberty of individuals, greater prosperity results for all”.

The FMF has a far less impressive website, but its tag line of “progress through freedom” says pretty much the same thing.

To test the hypothesis, I use per capita income as a rough proxy for individual wealth and because I have only 750 words to make my argument, I ignore for the time being inequality and some of the “happiness” indices that get touted from time to time. The 10 wealthiest countries by per capita income according to the International Monetary Fund are: Qatar ($102,211), Luxembourg ($79,785), Singapore ($60,410), Norway ($55,009), Brunei ($54,389), the US ($49,922), the United Arab Emirates (UAE) ($49,012), Switzerland ($45,418), Canada ($42,734) and Australia ($42,640).

This is a fairly eclectic mix of liberal democracies, state-dominated autocracies and monarchies. But how do they fare when it comes to granting their citizens their economic freedom?

According to Heritages 2013 index, compiled in partnership with The Wall Street Journal, five of these wealthiest countries are in the top 10 economically free countries: Singapore (2), Australia (3), Switzerland (5), Canada (6) and the US (10). This implies a link between economic freedom and wealth, but no absolute correlation. But does economic freedom have other benefits too? Are people in wealthy countries, for example, more tolerant than their counterparts in less well-off parts of the world?

From my secular and liberal perspective, I hope so. It would be awful if people took the freedoms they enjoyed and then failed to share these with others who were different from them. Certainly in countries like the US this is the case. Even in the parts of the so-called Land of the Free where the religious right rules, the state doesnt sanction the abuse of the rights and freedoms of dissidents, at least within its own borders.

With some relatively rare exceptions, apart from some strident rhetoric and book burning, the haters tend to not act on their dislike of other faiths or lifestyles.

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IN THE MARKETS: Wealth and freedom go together, for the most part

Topics: asx, big business, tax, tax haven

ALMOST two-thirds of Australia’s top 100 companies listed on the stock exchange have subsidiaries in tax havens or low-tax jurisdictions, a new report shows.

Thirteen of the top 20 companies, including two of the big four banks, have entities in well-known tax havens such as the Cayman Islands, Luxembourg, the British Virgin Islands and Bermuda.

A Uniting Church report, Secrecy Jurisdictions, the ASX100 and Public Transparency, reveals 61 of the top 100 companies held subsidiaries in ”secrecy jurisdictions” as of April 2011 that have been targeted by tax authorities for sheltering companies dodging tax.

News Corporation, Westfield and the Goodman Group were among the worst offenders, the group said, holding more than 50 entities in low-tax jurisdictions each.

The report shows that while many of the companies may do legitimate business in low-tax jurisdictions such as Hong Kong and Singapore, many subsidiaries exist with little evidence of commercial activity.


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Top Aussie companies' tax havens revealed

The Chancellor has demanded Britains offshore tax havens do more to crackdown on illegal evasion as he sought to strengthen a potentially ground-breaking deal to stamp out the criminal activity.

Under a pilot project between Britain, Germany, France, Italy and Spain, tax information will automatically be shared if there is any suspicion of illegal evasion. The agreement goes further than existing bi-lateral exchanges between countries, under which information has to be requested.

George Osborne said the project could be a new front in the battle against tax cheats, and used the G7 weekend meeting of advanced country finance ministers in Buckinghamshire to hint at plans to extend the scheme to developing countries.

Im determined that tax that is owed must be paid, he said. We all agreed on the importance of collective action to tackle tax avoidance and evasion.

Its incredibly important that companies and individuals pay the tax that is due, and this is important not just for Britain and British taxpayers but also important for many developing nations as well.

Britains offshore tax havens, such as the Cayman Islands and the British Virgin Islands, are signed up to the multi-lateral pilot arrangement, but the Chancellor said they needed to go further as some states are currently not part of an existing deal with the US.

It is necessary to collect tax that is owed. And the Crown dependencies and the overseas territories need to play their part in that drive. And they will need to do more, he said.

The UK has made tax evasion and aggressive tax avoidance a key plank of its G7 and G8 presidencies this year, and will be pushing for a new European directive on automatic information exchange at the Ecofin meeting of finance ministers this Tuesday.

Austria and Luxembourg have so far blocked progress towards greater tax transparency but are coming under mounting pressure to sign up. Defending their position in the past, they have argued that the UK had failed to crackdown on its own tax havens.

However, both Britains overseas territories and Crown dependencies are signed up to the multi-lateral deal with Germany, Spain, France and Italy weakening Austria and Luxembourgs position.

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Osborne: Offshore tax havens 'must crackdown on illegal evasion'

OTTAWA Canadians have stashed a staggering $170 billion in the top 12 global tax havens around the world, says a watchdog group that is calling on the federal government to do more to combat offshore tax evasion.

At the same time, only 44 Canadians were convicted of offshore tax evasion between April 2006 shortly after the Harper government took office and March 2012, according to new documents tabled in Parliament, raising new questions about the Conservative governments record on the file.

Canadians for Tax Fairness, a domestic advocacy group, says new Statistics Canada data show Canadian money socked away in the major tax havens has hit a new record of $170 billion nearly 10 per cent of Canadas $1.8 trillion gross domestic product.

The amount of Canadian money parked in the top three tax havens Barbados ($59 billion), Cayman Islands ($30 billion) and Luxembourg (about $20 billion) has more than doubled since 2005 to $109 billion, the group calculates.

Holding an offshore account or company is not illegal and doesnt necessarily indicate wrongdoing as long as the related income is reported. A number of businesses have legitimate reasons for holding offshore assets.

Yet, the watchdog figures that international tax havens are costing the federal and provincial governments at least $7.8 billion annually in lost revenue.

Its still a big problem because its very hard for the Canadian government to police that because of the secrecy, said Dennis Howlett, executive director of Canadians for Tax Fairness.

More and more money is going to offshore.

The groups announcement Friday came as documents tabled in the House of Commons show that only 44 Canadian taxpayers were convicted of tax evasion related to money and other offshore assets between April 1, 2006 and March 31, 2012.

The convictions involved $7.7 million in federal taxes evaded, as well as $6.8 million in fines and 337 months in jail. The fines ranged from approximately $12,000 to $1.1 million, according to the documents, with jail sentences ranging from zero to 48 months.

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Canadians have $170B stashed in top 12 global tax havens

Offshore Banking and Auto Tax Info Exchange Agreements
The chairman of the ABBL named reasons why he fully supports Minister Frieden's announcement that Luxembourg will apply the automatic exchange of information…

By: InvestOffshore

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Offshore Banking and Auto Tax Info Exchange Agreements – Video

By John O’Donnell and Jan Strupczewski

DUBLIN (Reuters) – The European Union’s six biggest countries agreed on Friday to cooperate in the fight against tax havens, piling pressure on Austria to follow Luxembourg in ending bank secrecy.

The finance ministers of Germany, France, Britain, Italy, Spain and Poland announced their plans to push for more bank transparency within Europe and beyond.

“Nobody can deny that bank secrecy is outdated, that we need an efficient system to tackle evasion strategies,” French Finance Minister Pierre Moscovici told reporters, flanked by his counterparts from the other countries. “Our mission is to create momentum. When these six major capitals of Europe move together, it creates a strong signal which nobody can resist.”

George Osborne, Britain’s finance minister, said he was pushing for more transparency from the UK overseas territories of the Cayman Islands and British Virgin Islands.

“The places that you can hide are getting smaller and smaller,” he said. “We are in advanced stages of discussions,” he said of talks with the two territories. “They are in no doubt about what we expect.”

For a ranking of countries’ compliance with banking transparency standards, click


The announcement adds to pressure on Vienna to sign up to EU rules for the automatic exchange of information on bank depositors. It follows Luxembourg’s decision this week to share foreign bank account details with EU governments from 2015, bringing it into line with all other member states bar one – Austria.

Earlier, however, Austrian Finance Minister Maria Fekter dismissed exchanges of information as an invasion of privacy and criticised other countries for failing to tackle what she called the real “hot spots” of money laundering.

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EU's six largest members agree to fight tax havens

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