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

 Tax Havens  Comments Off on Follow the money: inside the world’s tax havens | Business …
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 …

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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Colorado eyes ballot question to collect from corporate tax havens

Meet NATOs new rapid-reaction task force, now in initial training

 NATO  Comments Off on Meet NATOs new rapid-reaction task force, now in initial training
Apr 032015
 

As Russian actions across eastern Europe alarmed countries last year, NATO officials at a summit in Wales decided to take a new step: Forming a new military force designed to respond swiftly in the face of threats.

The Very High Readiness Joint Task Force will include about 5,000 troops primarily from France, Germany, Italy, Poland and Spain, with maritime, special operations and aviation units. Its meant to give the rest of the 30,000 service members in NATOs response force time to mobilize.

The high-readiness force will take a major step this month with part one of Operation Noble Jump. Running from April 1 to April 10, the exercise includes missions in the Czech Republic and the Netherlands, and marks the first time that the forces will practice rapid orders to move, NATO officials said.

NATO released this video Thursday to help explain it:

Another part of Noble Jump will occur from June 9 to June 20 at the Zagan Military Training Area in Poland, officials said. It will be followed by Trident Juncture 2015, a military exercise in Italy, Spain and Portugal from Oct. 21 to Nov. 6.

U.S. troops have trained with the NATO Response Force, established in 2003, for years. In Latvia, for example, U.S. Marines joined troops from Lithuania, Luxembourg, Canada and Germany last month as part of a five-day training assignment. The Marines were part of the Black Sea Rotational Force, which cycles through the Baltic region regularly for training assignments on Russias western flank.

Air Force Gen. Philip Breedlove, the commander of U.S. European Command and supreme allied commander of NATO operations, has said repeatedly that the whole NATO Response Force needs to be ready. He said at a forum in Brussels last month that NATO isnt just establishing the high-readiness task force, but also working to speed up how the rest of the response force moves.

Breedlove told the House Armed Services Committee in February that Europe will be the primary contributor of land forces for the high-readiness task force, but the United States must contribute some troops to help with cohesiveness.

Dan Lamothe covers national security for The Washington Post and anchors its military blog, Checkpoint.

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Meet NATOs new rapid-reaction task force, now in initial training

From HP Sauce: Green grow the blushes, oh!

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Apr 032015
 

QUANDARIES abound for the Green Party and its biggest donor, Dame Vivienne Westwood. In the last Eye we wondered whether Westwoods lame excuses for her embarrassing Luxembourg tax arrangements which contravene the Greens policy on tax havens would wash with the party faithful. Came the answer: No.

Within hours the national executive of the Young Greens withdrew its invitation for the flighty fashion designer to bang the drum ahead of the general election with a tour of eight university campuses. Party leader Natalie Bennett and MP Caroline Lucas (who has recently slated other parties reliance on celebrity support) are keeping schtum. But media spokesman and Liverpool candidate Martin Dobson has revealed that the party is now investigating Westwoods business arrangements.

The Starbucks model Her main company, VWL, adopts the Starbucks model and pays 2?m a year to Luxembourg-based parent Latimo, thus avoiding annual tax payments of around 500,000. This will be scrutinised by the independent tax specialist engaged by the party leadership, who it is to be hoped will also look into other offshore payments, such as the 4m paid by VWL to Latimos Italian subsidiary, Vivienne Westwood Srl, in 2013.

While Dame Viv sticks to her stock response of boasting that she pays income tax, ignoring that the issue is her corporate tax arrangements, her businesses continue to let the side down by employing unpaid interns, again in contravention of Green Party policy. End unpaid internships, proclaims the manifesto. The Green Party believes they should not be used as an ongoing source of free full time labour. Yet in March alone, VWL advertised jobs for two voluntary (ie unpaid) internships at its south London HQ, one in the press office and the other in the jewellery department. Both specified: The role will be for approximately 5 days a week, Monday to Friday between 10:00 am to 6:00 pm, although as this is a voluntary position, these requirements are flexible.

Accusations of greenwash Its all a bit of a pickle. If the tax specialist clears Westwood, the accusations of greenwash will mount. If the facts as set out in the VWL accounts are confirmed, the pressure will be on to return Westwoods 300,000 donation to party coffers: Sheffield Central candidate Jillian Creasy is among those calling for this. There are already problems justifying the use of Vivs funds to set up Bristol West candidate Darren Hall in swish campaign offices overlooking the harbour in one of the citys most expensive commercial zones.

According to tax experts, Westwood could start the process of repatriating her finances as a gesture of solidarity, but fashion industry insiders know that her Italian business partner, Carlo DAmario, would be extremely resistant to messing with the tax-efficient and entirely legal framework he set up in Luxembourg more than a dozen years ago.

Credibility over sustainability Last weeks announcement of the opening this autumn of a multi-million dollar Westwood boutique on three floors of a six-storey Beaux Art townhouse in midtown Manhattan shreds the remaining credibility over Westwoods claims to sustainability. Just a year ago she announced her intention to reduce the environmental effects of her business by downscaling. I have decided not to expand any more; in fact I want to do exactly the opposite, Westwood told the Observer.

As the Green Party is learning to its cost, what the Dame says and what she does are not necessarily the same thing.

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From HP Sauce: Green grow the blushes, oh!

$32 Trillion Stashed in Offshore Bank Accounts – Asset Protection Planners Examine the Facts

 Offshore Banking  Comments Off on $32 Trillion Stashed in Offshore Bank Accounts – Asset Protection Planners Examine the Facts
Apr 032015
 

VALENCIA, Calif., April 3, 2015 /PRNewswire/ — Offshore banking is growing in leaps and bounds as both the rich and the not so rich look for safe places to stash their cash. They are doing it in record numbers and record amounts according to a recent Bloomberg News report, which said that as much as $32 trillion has been stuffed in offshore bank accounts. Of the world’s 50 safest banks, according to Global Finance, not even one of the top 25 safest are in the United States. In fact, there were 45 banks outside of the US that were on the top 50 safest bank list and only five (5) headquartered inside the US, California based Asset Protection Planners reports.

“For most people, it is not only the objective of not paying taxes,” says Philip Marcovici, a tax lawyer and board member a Lichtenstein wealth adviser. “It’s the objective of obtaining the right to privacy and seeking financial confidentiality.”

Asset protection from lawsuits is another major objective. E. Valdes, a firefighter located in Miami, Florida says, “I just don’t trust the courts here. I want to set up an offshore account to protect myself from the unknown. Plus, if I can put my money in a safer bank than any of the local banks, I don’t see why I shouldn’t.”

Mr. Valdes is not alone. The debt of nations can wreak havoc on its banking system and US isby far the most in-debt country in the world. The United States has over $18 trillion in debt. That is a little over $58,000 per citizen and an unsustainable 106% of its gross domestic product. China, on the other hand, the world’s fifth (5th) most in-debt country, has $3 trillion in debt, which is just a little over $2,000 per citizen, or 37.5% of its GDP.

Where are the Safest Banks Located?

Regarding the safest banks, Canada has six (6) banks on the world’s 50 safest banks list. The United States, which has nine (9) times as many people as Canada, has onlyfive (5) banks on the list. Germany, which is about one-fourth (1/4) the size of the United states has six (6) banks on the world’s safest banks list. The United States is almost fourteen (14) times bigger than Australia in population, yet the Aussies have four (4) banks showing, all of which are on the top half of the 50 safest banks list.

The top 10 safest banks are located in Germany, Switzerland, Germany, Germany, Netherlands, Netherlands, Germany, France, Luxembourg and France, in that order. Of the top 50 safest banks,zero (0) were in Africa, 15 were located in Asia, four (4) in Australia, 19 in Europe, 11 in North America and one (1) in South America.

Banks in jurisdictions such as Switzerland can also act as money management firms. They have expert financial advisors who work with their clients to invest funds in a combination of interest bearing and stock market investments that suit their clients’ desires.

Who Has Offshore Accounts?

There are an estimated 26.2 million US citizens who have offshore bank accounts. Many of these individuals do not hold their bank accounts in their own names but in companies and/or trusts for enhanced protection from US litigation. Plus many foreign banks will not open personal accounts for US people, so a foreign corporation or LLC must be filed to hold title to the account.

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$32 Trillion Stashed in Offshore Bank Accounts – Asset Protection Planners Examine the Facts

Spain news

 Tax Havens  Comments Off on Spain news
Mar 162015
 

The Cayman Islands are considered a tax haven by Oxfam. :: R. C.

Large Spanish companies are increasingly opening subsidiaries in tax havens, this is according to a two-year study carried out by Oxfam.

It reveals that companies in the Ibex had 810 subsidiaries in 2013, 44 per cent more than the year before. The companies with the biggest presence abroad were ArcelorMittal, with 58 per cent of its subsidiaries in tax havens and Banco Santander with 19 per cent.

But it is necessary to establish what Oxfam considers a tax haven, because many of the locations do not coincide with those named by the OECD or Spanish tax authorities.

For example, Oxfam includes both Ireland and Holland as tax havens because of their fiscal rules. However, Hacienda doesnt agree.

According to the OECD, tax havens dont even exist because all its members, except for one small Pacific island, have signed treaties.

Oxfam considers a tax haven to be a territory with low or zero taxation, with advantages for non-residents and with a lack of transparency rules that allows account holders to remain anonymous.

On this basis, Oxfam stipulates that the US state of Delaware, the British Channel Islands, Panama and Luxembourg, among others, are tax havens.

Delaware is the territory with the most subsidiaries of Spanish companies: 350 of the total 810. Santander has 62 there, while 58 belong to Iberdrola and 55 to ACS.

In its audit report, Santander stated it only had subsidiaries in offshore territories such as the Isle of Man or the Cayman Islands, but the amount will be reduced as a result of treaties that have been signed.

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Spain news

Obama's Plan To Tax Overseas Earnings Draws Scrutiny

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Feb 132015
 

A an employee works at Amazon’s fulfillment center in Rugeley, central England, in 2012. President Obama wants Amazon and other U.S. companies to bring more of their overseas earnings home. Phil Noble/Reuters/Landov hide caption

A an employee works at Amazon’s fulfillment center in Rugeley, central England, in 2012. President Obama wants Amazon and other U.S. companies to bring more of their overseas earnings home.

American companies have about $2 trillion in overseas accounts money they could be using to hire workers and pay dividends in the United States. But they’re reluctant to do so, in part because of the way the U.S. tax system works.

President Obama proposed some big changes in the tax code last month that would encourage U.S. companies to bring more money home. A lot of people in Washington agree with the goal, but there’s sharp disagreement about how to accomplish it.

Last month, the European Union issued a report about Amazon and the taxes it pays. The online retailer does a lot of business in Europe but its corporate tax rate is in the single digits, says Crawford Spence of the University of Warwick in England.

“They pay very little tax here, because most of their tax is paid in Luxembourg,” he says.

And Amazon isn’t alone. Big U.S. companies, including Starbucks and Apple, have pared down their tax bill by funneling revenue into tax havens like Luxembourg and Ireland. Spence says it’s totally legal.

“Currently the rules are very complicated, very convoluted, which suits companies very well, ’cause there are always loopholes,” he says.

The rules proposed by Obama last month would change that. The president wants to lower the tax rate on overseas corporate revenue, but a 19 percent minimum tax would kick in if companies use too many loopholes and tax havens, says Edward Kleinbard of the University of Southern California law school.

“These kinds of games are exactly the reason why you need the minimum tax,” he says. “The minimum tax is the safeguard against these kinds of abuses.”

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Obama's Plan To Tax Overseas Earnings Draws Scrutiny

Nunes Plan Ignores Base Erosion Concerns

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Jan 162015
 

Another lawmaker has thrown his hat into the tax reform ring. Republican House taxwriter Devin Nunes released a business tax reform plan last week that would gradually lower tax rates to 25% and move to full expensing. Nuness plan shifts U.S. international tax rules toward territoriality and imposes a 5% tax on a companys undistributed earnings. He says that when it is scored, it will be revenue neutral. Sounds great, right? Well, Nunes has decided to completely ignore the problem of U.S. tax base erosion, saying when pressed that those concerns are irrelevant because he is creating a new tax code.

Both former House Ways and Means Committee Chair Dave Camp and former Senate Finance Committee Chair Max Baucus struggled with base erosion concerns in their tax reform drafts. Camp tried to tweak subpart F to make it function more effectively, and he initially proposed a series of options for how to protect the U.S. corporate tax base. His final bill included a one-time tax of 3.5% or 8.75% on foreign earnings. Baucus tried to create a minimum tax, and also had options (Y and Z) for dealing with the so-called lockout effect, which encourages U.S. companies to keep earnings offshore rather than repatriate them to the United States.

Nuness proposal would essentially repeal subpart F. Only section 965, which was the temporary dividends received deduction, would survive the lawmakers chopping block. It would allow unused foreign tax credits to be treated as general business credit carryovers, but it wouldnt allow indirect foreign tax credits for taxes paid by a foreign subsidiary. Nunes would essentially eliminate the entire anti-deferral regime in the tax code.

Nunes introduced his plan late last week, so there wasnt much time for anyone to really react. Fellow Republicans praised him for putting it forward, but cautioned that they hadnt read it yet. Ways and Means Democrats were even more measured. Rep. Richard Neal thought that eliminating most deductions might be going too far, while New Jersey Democrat Bill Pascrell Jr. took the opportunity to criticize Camp for leaving Democrats out of the tax reform process last year. The White House had nothing to say, but Nunes commented that he didnt expect the presidents support.

And, frankly, he shouldnt. Leaving aside the fact that President Obamas political priorities are much different from Nuness, the White House is highly unlikely to work with a tax reform plan that essentially ignores the most pressing issue facing the U.S. corporate tax base today. Simply lowering the rate to 25% wont stop base erosion not when companies can achieve much lower rates than that by using countries such as Ireland, Luxembourg, and other tax havens.

A credible business tax reform proposal must address base erosion concerns. It must include options for preventing companies from engaging in aggressive income shifting, and it has to include detailed rules for dealing with intangible income. Camp recognized this. Criticism of his base erosion options bedeviled his tax reform efforts right from the start. What little effort Obama has made on international tax reform in the last few years has been pushing a tax on excess returns. All Nunes has done is slap a 5% tax on undistributed earnings and airily dismiss every other concern about income shifting. It simply isnt realistic to dismantle subpart F and say everything is fine because the old tax code is irrelevant.

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Nunes Plan Ignores Base Erosion Concerns

Bitcoin Transactions Not Yet Entirely Anonymous

 Bitcoin  Comments Off on Bitcoin Transactions Not Yet Entirely Anonymous
Jan 022015
 

A group of researchers in Luxembourg say they have found a way to uncover the identities of Bitcoin users. So how anonymous is the vaunted crypto-currency?

Bitcoin has been having some difficulty persuading consumers to use it for online transactions, but the virtual currency is nevertheless slowly starting to win people over. Bitcoin is a peer-to-peer system, which means there is no centralisation or control, and payments can be made rapidly across the world free of charge. Every users identity is hidden behind an encrypted pseudonym and an address, both of which can be changed on a regular basis to protect confidentiality. Against this background, a team of cryptographic experts working at the University of Luxembourg have been carrying out research in order to find out whether the system really guarantees anonymous transactions. Now the researchers, Alex Biryukov, Dmitri Khovratovich and Ivan Pustogarov, have just published a paper entitled Deanonymisation of clients in Bitcoin P2P network, in which they claim to have discovered a means of identifying users IP addresses.

The three cryptographers describe their method of finding out by whom or at least from which IP address a given transaction was being made. Focusing on the Tor security network used by many Bitcoin aficionados to protect their identity, they managed to disable Tor access to the users client by using deliberately malformed messages and were then able to get the Bitcoin server to reveal the IP address that was connecting to the Bitcoin entry nodes. Using this method, the researchers claim to have managed to de-anonymise up to 60% of all users targeted. They say a hacker could discover the identity of a Bitcoin user by spending just under 1,500 on an attack involving several computers, which means that most ordinary Internet users would not be able to exploit this weak point and only the most experienced and best equipped hackers will be able to get in through the loophole. Nevertheless, the aim of the Luxembourg team is not simply to point out deficiencies in the system but to help rectify the situation, and they are now working with the Bitcoin developers on new software designed to render transactions really secure and anonymous.

It will come as no surprise however to learn that people closely involved with the virtual currency are aware of potential privacy issues. Bitcoin is often perceived as an anonymous payment network. But in reality, Bitcoin is probably the most transparent payment network in the world, points out one of the first sites dedicated to the currency. For this reason a number of tools such as Darkwallet have already been developed with a view to enhancing the confidentiality of Bitcoin financial transactions. The Luxembourg research project is one of the very first efforts to test the limits of the crypto-currency but, given the obvious attractions of having an anonymous cash-like system for worldwide online transfers, it will doubtless not be the last. Meanwhile the revelations might well make people hesitate before embarking on such innovative ideas as preserving their DNA via the Bitcoin network, or even simply making micro-payments over the social networks, where a degree of confidentiality is a major requirement.

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Bitcoin Transactions Not Yet Entirely Anonymous

UK hypocrisy over Luxembourg mega-corp tax deals (15Dec14) – Video

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Dec 192014
 



UK hypocrisy over Luxembourg mega-corp tax deals (15Dec14)
UK politicians are hypicrites for attacking secret deals in Luxembourg for fabourable tax deals, while the British operate tax havens for mega corp and indiv…

By: liarpoliticians

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UK hypocrisy over Luxembourg mega-corp tax deals (15Dec14) – Video

Into Tax Havens: Latest News on Into Tax Havens, Into Tax …

 Tax Havens  Comments Off on Into Tax Havens: Latest News on Into Tax Havens, Into Tax …
Dec 172014
 

Apr 13, 2013 at 13:23 | Source: 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.

Apr 06, 2013 at 17:09 | Source: PTI

Finance Minister P Chidambaram today said an inquiry has been initiated against the individuals whose names appeared in a global report on the monies stashed in tax heaven.

Apr 05, 2013 at 23:10 | Source: IBNLive.com

Dawood Ibrahim’s cash is washing up in the offshore banking haven of Nassau in The Bahamas – a beach paradise also known for its zero-taxes and high-secrecy banking – in an Indian bank.

Apr 05, 2013 at 20:23 | Source: PTI

A worldwide media expose has claimed that it has unearthed details of 2.5 lakh individuals and entities from more than 170 countries, including India, that evaded taxes by setting up companies in tax havens.

Apr 05, 2013 at 17:56 | Source: Moneycontrol.com

The business of money in tax havens excites the imagination. One can conjure up loads of ill-gotten wealth being stashed away in some underground cellar, with the owner decked in diamonds and rolling on a bed of greenback.

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Into Tax Havens: Latest News on Into Tax Havens, Into Tax …

Bombardiers leaked tax scheme includes arrangements in Luxembourg

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Dec 102014
 

Several high-profile Canadian companies including Bombardier Inc. are among firms whose tax arrangements in Luxembourg have been leaked amid a growing climate of global concern over corporate tax strategies that critics say result in billions in foregone government revenues.

A new batch of leaked documents released late Tuesday by the Washington-based International Consortium of Investigative Journalists (ICIJ) provides a glimpse into the complex structures used by many global corporate giants to move profits into subsidiaries in Luxembourg, one of several tax havens around the world. The consortium leaked a first package of documents last month.

The Bombardier document is a March, 2010, letter by Ernst & Young acting on behalf of the Montreal-based company that outlines plans for a two-phase restructuring of part of Bombardiers U.S. financing activities.

The complicated scheme involves a series of transactions and loans around the sum of $500-million (U.S.) and 11 Bombardier subsidiaries in eight countries.

Essentially, these types of dealings use so-called hybrid mismatch arrangements to play off different tax regimes in different countries in order to end up with a low or zero tax bill, said Laval University tax law professor Andr Lareau.

The Bombardier strategy outlined in the document appears to transfer funds to a Luxembourg-based subsidiary in exchange for mandatory redeemable preferred shares, which are treated as debt. All payments made by the Luxembourg-based company which has only one part-time employee who is a Luxembourg resident are treated as interest payments and thus deductible and not subject to withholding tax in the grand duchy.

Cash going back to the Canadian parent is in the form of dividends, which under a Canada-Luxembourg treaty are not taxed, Prof. Lareau said.

Bombardier said its structure is legal.

Bombardiers worldwide corporate structure abides by all applicable laws, including tax laws, Bombardier spokeswoman Isabelle Rondeau said in an e-mail message on Wednesday.

Bombardier is not the only Canadian company singled out by ICIJs investigation for allegedly using Luxembourg-based tax-avoidance strategies.

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Bombardiers leaked tax scheme includes arrangements in Luxembourg

Germany, France, Italy Call for Tighter EU Tax Curbs

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Dec 022014
 

By Dow Jones Business News, December 02, 2014, 03:35:00 AM EDT

BERLIN–Germany, France and Italy are pressing the European Union to tighten curbs on tax havens, urging that some measures be proposed by the end of this year and concrete rules adopted by the end of 2015.

A joint letter from the finance ministers of the three leading EU countries to European Economics Commissioner Pierre Moscovici argues that new measures should ensure greater transparency and hinder companies from gaming Europe’s divergent tax laws.

The commission should work to rein in “aggressive tax planning” and “profit shifting” by companies, according to the letter, which calls for stricter rules, more disclosure requirements and better coordination between European states.

“Our citizens and our companies expect us to cope with tax avoidance and aggressive tax planning. It is our common duty to meet their expectation by ensuring that everyone pays its fair share of tax to the state where profits are generated,” Germany’s Wolfgang Schuble, France’s Michel Sapin and Italy’s Pier Carlo Padoan wrote in a joint letter seen by The Wall Street Journal.

“Since certain tax practices of countries and taxpayers have become public recently, the limits of permissible tax competition between member states have shifted. This development is irreversible.”

The move by Berlin, Paris, and Rome is an open challenge to new European Commission President Jean-Claude Juncker, who was premier of Luxembourg until 2013 and worked with companies wanting to reduce their tax bill

Mr. Juncker came under pressure last month after the release of confidential documents highlighted Luxembourg’s generous tax breaks to multinational corporations during his time as the country’s prime minister, which critics say have turned the country into a corporate tax haven. Mr. Juncker has played down his role in the matter.

Luxembourg Finance Minister Pierre Gramegna said Tuesday that he hadn’t been asked to sign the letter but the content of it goes in the right direction.

“The initiative [of the three ministers] shows that there’s consciousness of the need of an international solution,” he said. “The three minister are encouraging the commission to go on and we can also only encourage it.”

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Germany, France, Italy Call for Tighter EU Tax Curbs

Tax havens News, Research and Analysis – The Conversation

 Tax Havens  Comments Off on Tax havens News, Research and Analysis – The Conversation
Dec 012014
 

PwC headquarters in Luxembourg. EPA/Nicola Bouvy 10 November 2014

By Prem Sikka, University of Essex

All over the world, tax revenues are under relentless attack. With help from accountants, lawyers and financial advisers, corporations are avoiding taxes through complex corporate structures, profit shifting

By Antony Ting, University of Sydney

Hundreds of advance tax agreements between Luxembourg and more than 300 taxpayers were leaked and published by the International Consortium of Investigative Journalists last week. The taxpayers involved

By Ronen Palan, City University London

The revelations that global and multinational businesses have been brokering secret tax deals with Luxembourg to avoid paying taxes in their home countries, may be the first time an entire country has

By John Passant, University of Wollongong

Tax avoidance, or the use of legal arrangements to reduce tax, is rife. According to the Australian Tax Office (ATO), Australian companies in 2012 sent almost A$60 billion to related parties in tax havens

By Anthony Van Fossen, Griffith University

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Tax havens News, Research and Analysis – The Conversation

Juncker survives confidence vote over tax scandal | Business Recorder

 Tax Havens  Comments Off on Juncker survives confidence vote over tax scandal | Business Recorder
Nov 292014
 

November 28, 2014

Jean-Claude Juncker sailed through a European Parliament noconfidence vote over the “Luxleaks” tax scandal Thursday, but theEuropean Commission chief still faces awkward questions just amonth into his new job. In the parliament vote in Strasbourg, just101 MEPs approved the censure motion filed by eurosceptic partiesagainst the entire European Commission, 461 voted against it and 88abstained.

The motion focused on revelations from a journalistic investigation that showed Luxembourg gave tax deals to dozens of global firms during Juncker’s 19 years as prime minister of the tiny duchy. One group of lawmakers held up red banners saying “No Tax Havens” just seconds before the vote, which needed a two-thirds majority to pass, but were ordered to remove them. The motion was filed by Nigel Farage’s UK Independence Party, Italian comedian Beppe Grillo’s Five Star Movement and backed by French far-right leader Marine Le Pen.

Juncker and his team of 27 commissioners, who took office on November 1, had been almost certain to survive the vote as major political groups had already said they opposed the censure motion. Juncker’s centre-right European People’s Party said the defeat of the motion “sent a message of no confidence to Farage and Le Pen.” But it still took some of the lustre off Juncker’s announcement a day earlier of a giant 315-billion-euro ($380 billion) investment plan aimed at jumpstarting the stalling EU economy. It also came just two days after Pope Francis criticised the “bureaucratic technicalities” strangling the European dream, in a blistering speech to the same parliament.

Critics say political veteran Juncker is too much of a Brussels insider to restore the faith of increasingly sceptical European voters who turned to anti-EU parties like Farage’s and Grillo’s in European Parliament elections in May. The motion said that they have “no confidence in Mr Juncker as the President of the European Commission”. “It is intolerable that a person who has been responsible for aggressive tax avoidance policies should serve as President of the European Commission,” it adds.

The Commission, the European Union’s executive arm, is arguably the most powerful institution in Brussels with influence over laws and policies that affect more than 500 million people across 28 countries in what is the world’s largest economy. The Luxleaks investigation revealed thousands of leaked files that showed Luxembourg allowed hundreds of top companies – including Apple, Pepsi, IKEA and Heinz – to enjoy tax breaks during Juncker’s time as premier.

Juncker has firmly denied any wrongdoing. When Euro MPs debated the motion on Monday, he repeated a vow to tighten measures against tax avoidance and tax fraud. But he also begged lawmakers to “please stop insulting me” after Marine Le Pen compared him to US gangster Al Capone. In fact he improved on the result when the European Parliament voted on the Commission’s line-up in October, when it was approved by 423 votes with 209 against and 67 abstentions.

There have only been eight previous votes on censure motions against the European Commission since 1979, European Parliament officials said. In 1999 the commission led by Jacques Santer resigned over corruption allegations to avoid a no confidence vote while another censure motion against the Santer commission was withdrawn months before that.

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Juncker survives confidence vote over tax scandal | Business Recorder

Jean-Claude Juncker survives no-confidence vote over tax deals

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Nov 282014
 

Jean-Claude Juncker survives European Parliament no-confidence vote Motion focused on claims over tax deals carried out while European Commission boss was Luxembourg PM Group of lawmakers held up red banners saying ‘No Tax Havens’ just seconds before the vote Motion filed by Nigel Farage’s Ukip and Italian comedian Beppe Grillo’s Five Star Movement And it was also backed by the French far-right leader Marine Le Pen

By Afp and Julian Robinson for MailOnline

Published: 11:59 EST, 27 November 2014 | Updated: 13:27 EST, 27 November 2014

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European Commission boss Jean-Claude Juncker has today survived a no-confidence vote over the ‘Luxleaks’ tax scandal – despite a protest staged by MEPs inside the European Parliament.

In the parliament vote in Strasbourg, just 101 MEPs approved the censure motion filed by eurosceptic parties against the entire European Commission – 461 voted against it and 88 abstained.

The motion focused on revelations from a journalistic investigation that showed Luxembourg gave tax deals to dozens of global firms during Juncker’s 19 years as prime minister of the tiny duchy.

European Commission boss Jean-Claude Juncker (pictured) has today sailed through a European Parliament no confidence vote over the ‘Luxleaks’ tax scandal

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Jean-Claude Juncker survives no-confidence vote over tax deals

Analysts support increased transparency to fight tax havens

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Nov 252014
 

Responsible corporations paying their taxes and revealing their ownership structure could be a possible solution in the fight of Europe against tax evasion and tax havens which cost billions of euro annually. EurActiv Czech Republic reports.

We should step up our efforts to combat tax evasion and tax fraud, Jean-Claude Juncker told the European Parliament last July. The next moment MEPs confirmed him as European Commission President. Some of them would probably like to change their decision today, as after the Luxleaks scandal, the situation looks different.

The scandal erupted on 5 November, when the International Consortium of Investigative Journalists (ICJ) published articles based on a review of nearly 28,000 pages of confidential documents revealing that more than 300 international companies appear to have channelled hundreds of billions of dollars through the Luxembourg banks. They saved billions of euros in taxes.

As Juncker promised to respond to the problem, a wider discussion about tax is looming. The solutions to the scandal of tax dodging have been apparent for some time. We need binding regulation that closes loopholes and create transparency, Christian Hallum, senior policy analyst at the European Network of Debt and Development (Eurodad), told EurActiv Czech Republic.

We all have a right to know how much tax companies pay to EU governments, said Carl Dolan, head of Transparency Internationals EU office in Brussels. EU Ministers must now take action to end the secrecy of corporate tax deals in Europe. The Luxleaks deals could not have been kept secret if all companies were required to report details of their tax payments in every country where they operate, he said.

Aimed at corporations

The call for effective solution of tax evasion in the EU is not new in itself. The Commission has presented some initiatives in the past for a common consolidated corporate tax base (CCCTB), nevertheless the proposal is still pending as member states are dragging their feet. Other initiatives on tax are also in the deep freeze.

Since nearly eight years I am the rapporteur for the tax agreement of the EU with Liechtenstein concerning mutual cooperation concerning tax fraud. Luxembourg and Austria were against. Nothing moved since as it requires unanimity, German MEP and Chair of Committee on Budgetary Control Ingeborg Grssle told EurActiv Czech Republic.

One possible solution with the ambition to motivate corporations to be responsible in paying taxes is offered by a group of Czech lawyers led by Ondej Vondrek and Czech MEP Tom Zdechovsk (EPP). They call it a taxparent solution (Taxparency). It is aimed at the corporations which are lowering their tax obligations to the very minimum by shifting profits outside the EU to non-transparent tax havens. Therefore the EU budget is deprived of up to 300 billion annually, Zdechovsk explains.

Under the proposed solution, a conglomerate present in at least two EU member states could decide to pay at least 11.25% of its global profit in corporate tax and make its corporate ownership structure public on its website. In such a case, it would get the taxparent mark to boost its public image.

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Shane Wright: Companies dodging tax on an industrial scale

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Nov 212014
 

The tax official leant across the table in a sign he was revealing a secret. As a person who had been both a corporate tax payer and a corporate tax chaser, he was keen to explain the problem.

“A few years ago, the aim was to cut your tax by 20 or 30 per cent,” he said.

“If you cut it by 30 per cent, that was seen as pretty good and everyone, from the board down, was happy.

“But now, you’ve got the same businesses saying they want to cut their tax bill by 80 or 90 per cent or just not pay anything at all.”

And there is the problem.

At the G20 summit in Brisbane, there was again much debate about how to deal with the efforts of multinational firms to shift their cash around the globe to avoid tax.

As the release of highly confidential documents out of Luxembourg showed recently, the breadth of companies which are trying to wipe away their tax bill is staggering.

The lengths they are going to are astounding. Tax havens are a new industrial pursuit by some countries.

More than 15 per cent of total American foreign direct investment goes into The Netherlands (with an economy half the size of Australia’s), with 80 per cent of that $700 billion going into various holding companies.

Luxembourg, a principality not much bigger than Canberra, attracted $US2.4 trillion in foreign direct investment, more than Germany and France combined. Luxembourg really only has one industry, however, and that’s tax minimisation.

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Shane Wright: Companies dodging tax on an industrial scale

Killing tax havens could start new battle, warns OECD

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Nov 142014
 

EXCLUSIVE

Countries may have to battle for revenue from digital companies once the global plan to stop tax avoidance succeeds, says the OECD’s head of tax Pascal Saint-Amans, but at least they now have something to fight for.

In an exclusive interview with Fairfax Media as global leaders arrive in Brisbane for the G20 to tackle tax avoidance by multinationals such as Apple and Google, Mr Saint-Amans said the OECD’s plan against base erosion and profit shifting (BEPS) would put an end to tax havens, but would not eliminate tax competition.

In fact, the next decade was likely to see intensified tax competition between nations as they compete for business investment, but at least they would be competing on an even playing field. “If there’s no zero-tax havens left, then countries will be keen on competing with more attractive rates,” he said.

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“BEPS puts an end to harmful tax competition, but not tax competition. Some countries might move to be more attractive by reducing their [tax] rates. We think that’s fine.”

Treasurer Joe Hockey said it was “hugely important” for the globe that companies pay tax where they earn profits. “Now, it is theft when someone does not pay the tax that is due to a nation and it undermines the ability of that nation to be able to deliver the sorts of services that are essential to alleviate poverty and to reduce inequality,” he said. “We are focused on driving hard the taxation agenda that ensures that companies pay tax where they earn profits, that individuals pay tax where they should be paying the tax.”

Mr Saint-Amans said recent media reports showing Australian companies not paying tax on profits because they had shifted it through Luxembourg was an issue that had already been addressed in the BEPS plan.

Under the old rules, he said the Australian tax authorities were not told that companies had secured deals with Luxembourg authorities to lower their Australian tax bills, but under the new rules proposed by the OECD, and which G20 governments had agreed to, they would be notified.

Mr Saint-Amans said he was hopeful the OECD plan would result in governments working within a multilateral framework and come to some sort of agreement between themselves about where profits should be taxed.

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Killing tax havens could start new battle, warns OECD

Killing tax havens could start new battle

 Tax Havens  Comments Off on Killing tax havens could start new battle
Nov 142014
 

EXCLUSIVE

Countries may have to battle for revenue from digital companies once the global plan to stop tax avoidance succeeds, says the OECD’s head of tax Pascal Saint-Amans, but at least they now have something to fight for.

In an exclusive interview with Fairfax Media as global leaders arrive in Brisbane for the G20 to tackle tax avoidance by multinationals such as Apple and Google, Mr Saint-Amans said the OECD’s plan against base erosion and profit shifting (BEPS) would put an end to tax havens, but would not eliminate tax competition.

In fact, the next decade was likely to see intensified tax competition between nations as they compete for business investment, but at least they would be competing on an even playing field. “If there’s no zero-tax havens left, then countries will be keen on competing with more attractive rates,” he said.

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“BEPS puts an end to harmful tax competition, but not tax competition. Some countries might move to be more attractive by reducing their [tax] rates. We think that’s fine.”

Treasurer Joe Hockey said it was “hugely important” for the globe that companies pay tax where they earn profits. “Now, it is theft when someone does not pay the tax that is due to a nation and it undermines the ability of that nation to be able to deliver the sorts of services that are essential to alleviate poverty and to reduce inequality,” he said. “We are focused on driving hard the taxation agenda that ensures that companies pay tax where they earn profits, that individuals pay tax where they should be paying the tax.”

Mr Saint-Amans said recent media reports showing Australian companies not paying tax on profits because they had shifted it through Luxembourg was an issue that had already been addressed in the BEPS plan.

Under the old rules, he said the Australian tax authorities were not told that companies had secured deals with Luxembourg authorities to lower their Australian tax bills, but under the new rules proposed by the OECD, and which G20 governments had agreed to, they would be notified.

Mr Saint-Amans said he was hopeful the OECD plan would result in governments working within a multilateral framework and come to some sort of agreement between themselves about where profits should be taxed.

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Killing tax havens could start new battle




Pierre Teilhard De Chardin | Designer Children | Prometheism | Euvolution | Transhumanism