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Ecuador’s president calls for global tax body

President Rafael Correa

Updated with additional information about Correa’s administration and exposés in the Panama Papers scandal; scroll down.

Ecuador’s president Rafael Correa has published a significant statement about international tax governance, and specifically the prospect of creating a global tax organisation. This is particularly important, given that Ecuador has just assumed the presidency of the G77 group of developing countries.

“A rapidly growing global web of tax havens is one of the key drivers of this inequality . . .
No one country can tackle this complex, secretive global financial conspiracy alone. Coordinated and comprehensive global action is needed. Current moves towards greater transparency about the initial owners of money held in shell companies can be part of the solution, but modest efforts at achieving greater transparency are not enough. We need to scrap tax havens altogether.
Continue reading “Ecuador’s president calls for global tax body” →

EU Leaks – a new platform for whistleblowers

Antoine Deltour, Luxleaks whistleblower

From the Greens / Europe Free Alliance in the European Parliament, a new initiative called EU Leaks:

EUleaks is a European platform where you can submit information in a highly secure and anonymous way.
Transparency and accountability are essential for democratic governance. The EUleaks project provides a platform for increasing transparency by providing a new tool for information in the public interest to be made available. EUleaks offers a venue for the realisation of freedom of expression as a fundamental right.

This comes in the context of a story which is summarised in a Guardian headline: Panama Papers: European parliament opens inquiry. (That is a fascinating story in its own right.)

More on EU Leaks from the website of Sven Giegold, who is a founder of the EU Leaks project (and a founder of TJN too, as it happens): Continue reading “EU Leaks – a new platform for whistleblowers” →

DFID’s work on international tax avoidance: in whose interest?

A new report by its own watchdog provides damning criticism of the UK government’s approach to tax as a development issue. At best, the government has ignored both international expertise and the views of the lower-income countries it claims to be helping. At worst, UK policy can be seen as pushing lower-income countries into supporting international tax rules that exacerbate poverty and inequality – and from which the UK government has itself has sought to benefit.

Such is the evidence presented that the government opens itself up to the possibility of a legal challenge over its failure to use aid for development aims, as required by legislation.

ICAI report

The Independent Commission for Aid Impact has released a report on the effectiveness of the UK government’s Department for International Development’s (DFID) efforts to tackle tax avoidance and tax evasion. Continue reading “DFID’s work on international tax avoidance: in whose interest?” →

Tax Justice Network Sept 2016 Podcast: #AppleTax, #BahamasLeaks and a conman offshore story

In our September 2016 September 2016 podcast: Continue reading “Tax Justice Network Sept 2016 Podcast: #AppleTax, #BahamasLeaks and a conman offshore story” →

The Tax Justice Network in Kenya and Israel

Two important events this month: Tax Justice Network Africa organised the 3rd International Tax Justice Academy on the 12th-16th September 2016 in Nairobi, Kenya. Continue reading “The Tax Justice Network in Kenya and Israel” →

#BahamasLeaks: New Leak Rips Open Bahamian Secrecy

We just put out this press briefing in reaction to the leaks from the Bahamas. Continue reading “#BahamasLeaks: New Leak Rips Open Bahamian Secrecy” →

Report: new data disproves US corporations’ false narrative on taxes

From Americans for Tax Fairness, a major new report about corporate taxes in the United States. It’s called Corporate Tax Chartbook: How Corporations Rig the Rules to Dodge the Taxes They Owe, and it contains many useful facts, such as this:

Corporate profits are way up, and corporate taxes are way down. In 1952, corporate profits were 5.5 percent of the economy, and corporate taxes were 5.9 percent. Today, corporate profits are 8.5 percent of the economy, and corporate taxes are just 1.9 percent of GDP.

Continue reading “Report: new data disproves US corporations’ false narrative on taxes” →

Our September Spanish language Tax Justice Podcast: Justicia ImPositiva, nuestro podcast de septiembre 2016

Welcome to Justicia ImPositiva, our third monthly podcast/radio show in Spanish. Bienvenid@s a Justicia ImPositiva, nuestro tercero podcast/programa radial mensual en castellano (abajo en castellano) Continue reading “Our September Spanish language Tax Justice Podcast: Justicia ImPositiva, nuestro podcast de septiembre 2016” →

Apple’s tax affairs: a symptom of the robber-baron culture

Updated with further information about Brazil’s decision – see below.

Now also on Angry Bear, Middle Class Political Economist

From the Financial Times:

More precisely, a group of 185 American CEOs has sent letters, co-ordinated by the Business Roundtable lobby group, to the leaders of 28 EU member states to try and get the European Commission to row back from claiming €13bn in underpaid taxes from Apple. They call the attempt a “grievous self-inflicted wound”. Continue reading “Apple’s tax affairs: a symptom of the robber-baron culture” →

Now Brazil puts Ireland on its tax haven blacklist

We have for years remarked that one of our informal markers of a tax haven is loud tax haven denials. See our ‘we are not a tax haven‘ blog for more. There’s probably no place more vocal than Ireland, where there seems to be a veritable industry of tax haven deniers, which specialises in cherry-picking convenient facts and making a pudding of them. (The other big Irish tax myth is that it was the 12.5 percent corporate tax rate that created Ireland’s Celtic Tiger: no, it wasn’t.)

Let’s state it clearly: Ireland is a big tax haven for multinational corporations, even if it isn’t particularly secretive. Or, in more succinct form, for those who have difficulty reading small text:

Ireland is a tax haven.

Continue reading “Now Brazil puts Ireland on its tax haven blacklist” →

Quote of the day – tax crimes and traffic offences

Michael West

From Michael West, an Australian tax journalist:

“In Australia, Part 4a of the Tax Act deems that the principal purpose of a transaction should be commercial (rather than tax driven). In light of the proliferation of tax haven activities by Australian companies this law, Part 4a, must be the most highly disregarded and disobeyed law in the nation, perhaps only topped by traffic offences.”

It’s an interesting story, not least because it has unearthed a hard-to-get number that we haven’t, from memory, seen before:

“The IPO documents for Intertrust estimate in 2014 the “total value of the global trust and corporate services market … was estimated at approximately €5.6 billion in revenue.”

Continue reading “Quote of the day – tax crimes and traffic offences” →

Report: why we need to tax corporations now, more than ever

Update: now on Naked Capitalism, where it’s attracted a lot of interesting commentary

Last year we published a document entitled Ten Reasons to Defend the Corporate Income Tax, outlining how the tax is under constant attack, in country after country, and explaining why it is one of the most precious of all taxes. Now there’s another fascinating paper, rich in insight and detail, from US economist Kimberly Clausing, entitled “Strengthening the Indispensible U.S. Corporate Tax.

While US-focused, it contains a lot of material that provides extensive further support for our own generic document, and argues that the corporate income tax is becoming more, rather than less, important in our tax system(s). It also argues that tax rates for capital, which is currently taxed at lower rates than labour is, should be harmonised with the labour rate, and supports so-called ‘formulary apportionment‘ approaches to taxing U.S. corporations internationally.

We’ll start by highlighting a graph: Continue reading “Report: why we need to tax corporations now, more than ever” →

Report: the investor case for country by country reporting

From the FACT coalition:

New Report: Investors at Risk by Lack of Corporate Tax Disclosures

September 12, 2016

Shareholders Increasingly Stymied by Opaque Corporate Tax Practices as Authorities Crack Down, Finds New FACT Analysis

Apple Tax Ruling “Just the Tip of the Iceberg”

WASHINGTON, D.C. – Investors are at an increasing risk due to the lack of information disclosed by companies about their tax practices, according to a new report published today by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition)—a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.
Continue reading “Report: the investor case for country by country reporting” →

UK tax authority: too close to big business, too far from the public – report

The UK’s tax collection agency is more secretive than MI6 and crippled by corporate interests according to a new report launched in the House of Commons yesterday.

Corporate interests now exercise a significant amount of control over HMRC, it says – and it is hard not to agree. All of the non-executive directors of HMRC come from the world of business. There are no representatives of individual tax payers or experts from the world of academia. The current Executive Chair of HMRC, Edward Troup, once called taxation ‘legalised extortion’. Before taking over at the tax collection agency he worked at a law firm linked to companies contained in the Panama Papers. Mr Troup later said his legalised extortion quote had been taken out of context, yet according to Full Fact it came from a 1997 FT article which appeared to be arguing against a General Anti Avoidance Rule (GAAR).

Continue reading “UK tax authority: too close to big business, too far from the public – report” →

MEP support for #LuxLeaks whistleblowers, back in court. (Again)

You may have heard that Luxembourg prosecutors aren’t satisfied with the 12th chamber of the Criminal Court of Luxembourg’s verdicts for the so-called #LuxLeaks whistleblowers Antoine Deltour and Rapahel Halet and they are appealing. That means these two men will once again face a Luxembourg court, probably by the end of the year. It was bad enough that these public spirited heroes were dragged through the courts in the first place, with Deltour receiving suspended 12-month jail time and a €1,500 fine and Halet sentenced to suspended 9-month jail time and a €1,000 fine. Continue reading “MEP support for #LuxLeaks whistleblowers, back in court. (Again)” →

The Bahamas tax haven – a (re-)emerging global menace?

Update: as it happens, The Economist has just published an excellent story about the Bahamas, subtitled The Bahamas Cocks a Snook at the War on Tax Dodgers. (Our only beef with that subtitle is that this is about so much more than just tax.)

We’ve periodically remarked on the Bahamas as a secrecy jurisdiction of great concern. Like Panama, it’s generally had a greater tolerance of dirty money than most modern offshore centres: more of a willingness to turn a blind eye and to overlook noncompliance by Bahamas-based actors of its own rules and laws.

The purpose of this blog is to flag up the Bahamas in a more pointed way: as a major wrecking-ball threatening global efforts to clamp down on cross-border financial secrecy.

The Bahamas has hosted an offshore centre for crime and tax evasion for decades, and it has historically had a higher tolerance for dirty money than most tax havens. Its secrecy score of 79 in our Financial Secrecy Index is one of the world’s highest. Treasure Islands summarises an important component of the Bahamas’ history and identity, via Chicago gangster Al Capone’s moneyman, Meyer Lansky: Continue reading “The Bahamas tax haven – a (re-)emerging global menace?” →

Apple’s iPhone 7 launch: but what about the taxes?

Apple is launching its iPhone 7 today. In the context of the recent Apple tax scandal, and the imbroglio involving the company, the European Commission, and the U.S. Treasury, we thought we’d share some images that some of our partners have created, to celebrate the event.

Before seeing the images, if you want something to read, perhaps take a look at Prof. Mariana Mazzucato’s penetrating analysis of just how much government support Apple has enjoyed, in its construction of the iPhone. It’s entitled ‘The Entrepreneurial State’: Apple Didn’t Build Your iPhone; Your Taxes Did. Her book The Entrepreneurial State, looking at how heavily such companies rely on government support, has been highly influential. Click on the fun video, which we blogged recently.

Here is a first image: thanks to Eurodad for forwarding this collection. Continue reading “Apple’s iPhone 7 launch: but what about the taxes?” →

On our recent event on beneficial ownership in Buenos Aires

The Second International Conference on Beneficial Ownership Registries took place in Buenos Aires on August 31st and September 1st. The event was held again at Argentina’s Central Bank and was co-organized by the Tax Justice Network, Argentina’s General Prosecution Office (Ministerio Público Fiscal), Fundación SES, Latindadd and the Red de Justicia Fiscal LAC. It was sponsored by Argentina’s Anti-corruption Office. Continue reading “On our recent event on beneficial ownership in Buenos Aires” →

UK moves forward on Country by Country reporting

They said it would never happen – but here it comes. From the UK lower house of parliament, an amendment to legislation which looks like this:

This is very welcome news, even though the amendment is far from perfect. Continue reading “UK moves forward on Country by Country reporting” →

Why reregulation after the crisis is feeble: Shadow banking, offshore financial centers, and jurisdictional ‘competition’

Prof. Thomas Rixen

Prof. Thomas Rixen, who has written a lot about tax ‘competition’ (aka tax wars) in the past, has a new article looking at similar dynamics in the area of financial regulation. Entitled Why reregulation after the crisis is feeble: Shadow banking, offshore financial centers, and jurisdictional competition, it points out that the shadow banking sector, many of whose players were implicated in the global financial crisis that erupted almost a decade ago, is heavily entwined with offshore financial centres. Typically, this involved banks sponsoring off-balance sheet vehicles, located in places like Cayman or Luxembourg: these supposedly took risk off the banks’ books, but then returned to haunt the banks when they blew up, causing widespread economic disaster. Continue reading “Why reregulation after the crisis is feeble: Shadow banking, offshore financial centers, and jurisdictional ‘competition’” →

Press Release: Has the European Commission’s Apple decision signalled the beginning of the end of tax wars?

Press release – for immediate release

Has the European Commission’s Apple decision signalled the beginning of the end of tax wars?

Today, the European Commission has ruled that two tax rulings issued by the Irish tax administration on the tax treatment of Apple’s corporate profits represent illegal state aid under EU law. As a consequence, Apple has to pay up to €13 billion of taxes plus interest to Ireland. This sum due to the Irish exchequer can be reduced if other countries from Europe, Africa, the Middle East or India or the United States decide to claim a share of those profits. This lays bare the core of a global problem: secretive tax rulings issued by tax haven states are not an instrument for the avoidance of double taxation, but a tool for the achievement of non-taxation of profits. In practice such rulings destroy fair market competition and undermine the tax sovereignty of democratic states.

This decision is remarkable on at least three counts.

Continue reading “Press Release: Has the European Commission’s Apple decision signalled the beginning of the end of tax wars?” →