Page 48 – Tax Justice Network

Bbumba: I Signed $157M Tax Waiver to Oil Company Without Reading Agreement

From TJN’s Department of ‘You Couldn’t Make This Up’: the East African press is reporting that Uganda’s former Energy Minister, Syda Bhumba, has confirmed that she signed a tax waiver agreement with UK company, Tullow Oil, without reading the document. The waiver, which exempted both income and capital gains from tax, is being disputed by the Uganda Revenue Authority on the grounds that she had no authority to sign such a waiver since authority in this area lies with the Finance Minister.

Continue reading “Bbumba: I Signed $157M Tax Waiver to Oil Company Without Reading Agreement” →

Sweden’s recipe for success: high taxes, strong unions, and equal distribution of wealth

While recent elections in France, U.K. and the U.S.A. have shown the results of globalisation gone bad, Sweden has successfully adapted its development model to make globalisation work for the majority of its people. Continue reading “Sweden’s recipe for success: high taxes, strong unions, and equal distribution of wealth” →

Forthcoming book: Tax Havens and International Human Rights Law

Tax havens cause enormous damage, not least because they block governments from fulfilling their human rights obligations. When rich people and powerful businesses evade paying taxes by using offshore tax havens they deprive states of the revenues they need to deliver on their commitments to provide education, health, justice and security. In this forthcoming book, Isle of Man-based lawyer Paul Beckett takes a human rights-based approach to the uses of tax havens and considers how the governments of tax havens actively connive with the process of breaching human rights. Continue reading “Forthcoming book: Tax Havens and International Human Rights Law” →

Developing countries’ access to CbCR: Guess who’s (not) coming to OECD dinner

It’s said that if you’re not at the table, you’re on the menu. Well, the OECD has just made available the list of activated relationships to automatically exchange country-by-country reports between countries. They use big figures like 700 relationships, but don’t get fooled by those numbers – simply look at the image below to see who really has access to CbCR.

Oh, by the way, there’s nothing wrong with your eye-sight. Developing countries are just not there…

Source: Rasmus Christensen (https://twitter.com/phdskat/status/860093952992608256?s=09), by kind permission

The problem is that instead of requiring a fully multilateral approach, the OECD has allowed bilateral relationships to the automatic exchange of CbCR. This makes it harder for more jurisdictions to exchange CbCR, and more costly to arrange – and in practice results in the exclusion of nearly all lower-income countries:

Some jurisdictions also continue to work towards agreeing bilateral competent authority agreements for the automatic exchange of CbC Reports with specific partners under Double Tax Conventions or Tax Information Exchange Agreements

Now, think of a major country that doesn’t appear on the image and is definitely choosing the bilateral approach when it comes to non-OECD countries. Hint 1: its very many multinationals (MNEs) have aggressively pursued profit shifting, so that the misalignment of their global profits away from the locations of their real economic activity has gone from just 5% in the 1990s to more than 25% now. Hint 2: this country won’t be joining the CRS (the global framework for automatic exchange of banking information) either.

Continue reading “Developing countries’ access to CbCR: Guess who’s (not) coming to OECD dinner” →

Paying a ‘Fair Share’: new brief on taxing multinational companies

In this new brief just published by the Sheffield Political Economics Research Institute authors John Mikler and Ainsley Elbra address the issue of global corporate tax avoidance and consider how multinational corporations can be made to pay their fair share of tax. Continue reading “Paying a ‘Fair Share’: new brief on taxing multinational companies” →

Coming Soon: The Spider’s Web – a film about Britain’s tax haven empire

#RogueLondon

Film maker Michael Oswald and TJN’s John Christensen have co-produced a new film about Britain’s tax haven empire. Titled The Spider’s Web: Britain’s Second Empire, the film is ready for release. It draws heavily on Nick Shaxson’s ground-breaking book Treasure Islands and uses historical footage to show how successive British governments have put tax havenry at the heart of Britain’s development strategy for over half a century.

You can get the opportunity to see this by attending the Tax Justice annual conference GLOBAL TAX JUSTICE AT A CROSSROADS: SOUTHERN LEADERSHIP AND THE CHALLENGES OF TRUMP AND BREXIT in London on 5th and 6th July where we will screen the film. You can register for the conference here. We’ll be publishing the finalised programme of speakers very soon.

Continue reading “Coming Soon: The Spider’s Web – a film about Britain’s tax haven empire” →

Estimates on illicit flows to and from developing countries

Our friends at Global Financial Integrity have released their latest report on what they estimate to be the latest figures from 150 countries on illicit financial flows to and from developing countries for the period 2005-2014. Most of these flows arise from fraudulent trade mis-invoicing which, as they point out, adversely affects the lives of real people:

“The massive flows of illicit capital shown in this study represent diversions of resources from their most efficient social uses in developing economies and are likely to adversely impact domestic resource mobilization and hamper sustainable economic growth.”

Interestingly, in addition to the estimated outflows GFI has looked at, this report also estimates illicit inflows to developing countries:

“Illicit inflows frequently occur when imports are under-invoiced for the purpose of evading customs duties and VAT taxes. The magnitude of estimated illicit inflows in the latest year (2014) ranges from $1.4 to $2.5 trillion. This large range reflects the fact that more precise calculations are difficult to make using available data.”

Continue reading “Estimates on illicit flows to and from developing countries” →

The Independent Commission for the Reform of International Corporate Taxation is hiring

The Independent Commission for the Reform of International Corporate Taxation is hiring. As part of the coalition that initiated ICRICT, we’re sharing the details with you below. Please see the job description below for full details and if you want to apply, please send your CV and a covering letter to: [email protected] by the closing date of 21 May 2017. Please put “ICRICT media” as the subject of the e-mail when applying. Continue reading “The Independent Commission for the Reform of International Corporate Taxation is hiring” →

Do you want to know how much tax multinational companies pay?

Yes, so would we… And now there’s an action today on twitter which we can all take to help this become reality.

All EU banks have been obliged to report their profits and tax paid on a country by country basis since 2015. And not just to tax authorities behind closed doors, but publicly. Because of that we now know for example that “Europe’s 20 biggest banks are registering over a quarter of their profits in tax havens – well out of proportion to the level of real economic activity that occurs there.” We also now know that Barclays (the 5th biggest European bank) registered €557m of its profits in Luxembourg and paid only €1m in taxes in 2015 – an effective rate of 0.2%. You can read more on all this in Oxfam’s report Opening the Vaults: The use of tax havens by Europe’s biggest banks.

Bringing these facts into the daylight creates considerable pressure on governments to take action. But now we need to extend *public* country-by-country reporting urgently to all multinationals. It is unacceptable in the 21st century that multinational companies can continue to obscure the real contributions they make to the societies from where they make their profits.

Continue reading “Do you want to know how much tax multinational companies pay?” →

Research shows UK’s Finance Curse grip tightening in next five years

Graphic: Guardian newspaper. Date sources: Office of National Statistics and Trade Unions Congress

Britain’s Trade Unions Congress has published projections showing the increasingly unbalanced growth of the UK economy. As you can see from this map, economic activity is skewed in the direction of England’s south-east region, which includes London. It’s forecast to produce 40.1 percent of the UK’s gross domestic product by 2022. Given the importance of the City of London’s offshore financial centre to the region, this is a vivid demonstration of the Finance Curse in action.

Continue reading “Research shows UK’s Finance Curse grip tightening in next five years” →

Why taxation STILL isn’t theft…

It came to our attention recently that a blog written for us by Associate Professor of Philosophy at Central European University Philip Goff prompted extensive discussion. The blog was called No, it’s not your money: why taxation isn’t theft. This concept that taxes paid by individuals and companies, used by government for the provision of public services are somehow ‘theft’ seems to excite a lot of people. Continue reading “Why taxation STILL isn’t theft…” →

President Trump visits La-La-Laffer Land

Inspired by Mad magazine

Taken as a whole, the tax plans just announced by US President Donald Trump, which include abolition of the inheritance tax, could represent the largest tax cut for billionaires and millionaires in US history. According to the President, this will stimulate growth and job creation. There’s no evidence to support this; in fact the evidence suggests the exact opposite. Continue reading “President Trump visits La-La-Laffer Land” →

UK Parliament fails to tackle financial secrecy in its overseas territories

So near and yet so far…

Hopes were riding high yesterday that UK parliamentarians might seize the opportunity to take historic action to end decades of financial secrecy in the UK’s Overseas Territories. We blogged about this yesterday highlighting the fact that a lot of ongoing Parliamentary business was at risk of being shelved because of the sudden general election called by British Prime Minister Theresa May. There’s a phenomenon known as the wash-up period which “refers to the last few days of a Parliament before dissolution. Any unfinished business is lost at dissolution and the Government may need the co-operation of the Opposition in passing legislation that is still in progress.” Continue reading “UK Parliament fails to tackle financial secrecy in its overseas territories” →

Two days left to end financial secrecy in the UK’s Overseas Territories?

UK parliamentarians have the opportunity to take historic action over the next two days, ending decades of financial secrecy in the UK’s Overseas Territories.

As Parliament closes down before the General Election which will take place on the 8th June, a lot of ongoing business is now at risk. A range of Bills that have been through multiple committee stages could be lost completely, required to start from scratch in the new Parliament. But some will make it through in the intense activity of the ‘wash-up‘:

The wash-up period refers to the last few days of a Parliament before dissolution. Any unfinished business is lost at dissolution and the Government may need the co-operation of the Opposition in passing legislation that is still in progress.

Continue reading “Two days left to end financial secrecy in the UK’s Overseas Territories?” →

Business leaders for a public registry of beneficial ownership in Germany

TJN proudly unveils today its first public call among business leaders in Germany in support of a fully public and effective register of beneficial ownership (BO, or the real owners of companies). So far 12 German businesses with a combined turnover of more than €500 million have signed the petition for amending the current draft law on beneficial ownership. The call proposes amendments by making a BO registry fully public, and by ensuring that the real ultimate beneficial owner is always published, no matter in how many “shells” the German legal entity might be wrapped.

The call emphasises that the publication of the information on beneficial ownership would create a level playing field between currently transparent GmbHs (with domestic, non-legal person shareholders), and currently opaque AGs and GmbHs (with foreign legal person shareholders). At the moment, the users of offshore legal entities can enjoy the (rather sinful) fruits of anonymity while the names of domestic business owners with nothing to hide are often already made public.

Here is the call for signature, and here is the signed call with the current list of signatories (and here is a blog in German introducing the call). The timeline for signatures is tight. The parliamentary schedule foresees that on Wednesday, 26^th April, the finance committee will discuss the law and the final discussions in the finance committee are scheduled to happen on 17 May. The final votes in the plenary Bundestag are planned on 18 and 19 May.

Please share this call among any business leader you know who might be interested and who might do business (including) through a German legal entity.

Continue reading “Business leaders for a public registry of beneficial ownership in Germany” →

Vietnam legislates on country by country reporting

There’s a good development in Vietnam we’d like to share with you via Policy Advisor Economic Inequality and Tax Justice Francis Weyzig of Oxfam Novib. He says,

“Vietnam has introduced a legal requirement for domestic subsidiaries to provide a copy of the global Country By Country report directly to the Vietnamese tax authority. This way, Vietnam does not have to rely on tax treaties or information exchange agreements to the get information on foreign parent companies. It provides a great example for other countries to follow, so congratulations to my colleagues in Vietnam for this great milestone!”

The decision by Vietnam to require local filing by multinationals that wish to operate there is exactly what we have argued countries should do – instead of getting bogged down in the complexities of an OECD process that may never yield any data.

Continue reading “Vietnam legislates on country by country reporting” →

The Panama Papers, 1 year on: our April 2017 Tax Justice Network Podcast

In our April 2017 Taxcast: the Panama Papers, one year on – we talk to the journalists who got the scoop. Plus: we discuss the raid on Credit Suisse, and new data exposing the profit shifting shennanigans of the EU’s biggest banks.

Featuring: The Panama Papers scoop journalists and Pulitzer Prize winners Bastian Obermayer and Frederik Obermaier of the Süddeutsche Zeitung newspaper, and John Christensen of the Tax Justice Network. Produced and presented by Naomi Fowler for the Tax Justice Network. The book ‘The Panama Papers: Breaking the Story of How the Rich and Powerful Hide Their Money’ is here.

Continue reading “The Panama Papers, 1 year on: our April 2017 Tax Justice Network Podcast” →

Our April 2017 Spanish Podcast: Justicia ImPositiva, nuestro podcast de abril 2017

Welcome to our monthly podcast and radio programme in Spanish, Justicia ImPositiva with Marcelo Justo and Marta Nuñez, downloaded and broadcast on radio networks across Latin America and Spain. ¡Bienvenidos y bienvenidas a nuestro podcast y programa radiofónica! (abajo en castellano). Our monthly podcast in English, the Taxcast will be out soon, talking to the journalists who got the Panama Papers scoop. Catch up on last month’s here and watch this space… Continue reading “Our April 2017 Spanish Podcast: Justicia ImPositiva, nuestro podcast de abril 2017” →

Beneficial Ownership: a Tax Justice Network checklist

We’re pleased to say that the world is moving towards the registration of beneficial owners (BOs) who are the natural persons who ultimately own, control or benefit from legal persons (e.g. companies) and legal arrangements (e.g. trusts). If made public, these registries would increase financial transparency. Public registers of BOs are the only way to prevent criminals from hiding behind opaque structures and nominees from facilitating tax evasion, money laundering, fraud, and other forms of corruption, including the financing of terrorism. They are also a prerequisite for the smooth functioning of markets by providing basic information for market participants and regulators so they know who is doing business where, as well as for the wider understanding of patterns of national and international economic activity. Continue reading “Beneficial Ownership: a Tax Justice Network checklist” →

Open Cayman: Reputation, rhetoric and reality

By Alex Cobham

Last week I took up the kind invitation of the government of Cayman to speak at their conference on ‘Tax Transparency in the Global Financial Services Ecosystem’, and to meet with staff from the monetary authority, statistics office and corporate registry; and with a range of industry representatives including those from the compliance association and Cayman Finance. Above is a video of my presentation; and here a few reflections on the divergences between reputation, rhetoric and reality; and on where things now stand. Continue reading “Open Cayman: Reputation, rhetoric and reality” →

Australian beer drinker tax vs the world’s biggest gas companies

Is it fair that Australians pay more tax on one beer than the oil and gas industry pays in petroleum tax on offshore gas in a year? Might a 10% royalty guaranteeing annual revenue of between $1.3 billion and $2.8 billion be a better way to go? These are the issues rightly raised by a report just out by the McKell Institute called ‘Harnessing the Boom.’ It was written by Richard Holden, a Professor of Economics at UNSW Business School. There are some great resources on a campaign site over this issue here. One of our colleagues at Tax Justice Network Australia Jason Ward takes up the story for us here:

The Tax Justice Network Australia (TJN-Aus) has had major wins in getting the Australian government to tackle corporate tax dodging. Currently TJN-Aus is running a campaign to push the government to reform the primary tax on oil and gas production, the Petroleum Rent Resource Tax (PRRT).
The current boom in exports of liquified natural gas (LNG) will catapult Australia over Qatar as the world’s largest exporter. However, on the same volume in 2019/20 Qatar will generate over $26 billion in royalties will Australia will earn nothing in PRRT from LNG. Qatar will also earn significantly more revenue from dividends from state-owned companies and corporate income tax payments. Continue reading “Australian beer drinker tax vs the world’s biggest gas companies” →

Tax haven blacklisting in Latin America

As governments (slowly) get to grips with the fact that tax havens are inflicting great harm on economies and democracies across the globe, facilitating mega amounts of tax dodging, and vast movements of criminal money by way of the secrecy services some of them offer, the question of our times is how we deal with them. Attempts to create tax haven blacklists (in order to potentially implement sanctions for non-cooperative jurisdictions) have so far been farcical as we’ve noted many times, most recently commenting on the European Union’s current work compiling its own blacklist system, here and here. So far the criteria for inclusion in tax haven blacklists has been weak, such lists have been ineffective and it’s been far too easy for some of the world’s worst offenders to wriggle their way out of them, or simply be big and bad enough not to worry about being included in the first place – for example – Tax Haven USA. If the EU, or anyone else really wanted to do this properly, the work’s already been done for them – with the best objective ranking available – the Tax Justice Network’s Financial Secrecy Index.

Continue reading “Tax haven blacklisting in Latin America” →

Thank you!