From the right wing UK finance publication City A.M., a ranking of the top 100 economists in the U.K.
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Our esteemed Director of Research
This guest blog by Tommaso Faccio of Nottingham business school complements a guest blog we ran on Friday by Sol Picciotto, also about Google’s all-important tax affairs.
Why Google (and other multinationals) are still not paying their fair share of corporation tax
Google says that it pays the tax required by every company in every country it operates. This is true apart from where the odd tax audit has resulted in tax settlements which have marginally increased the corporation tax it paid in some countries.
We learned in last week’s Public Accounts Committee meeting in the UK, with representatives from Google and HMRC [the UK tax authorities] how current international tax rules set by the Organisation for Economic Cooperation and Development (OECD), allow Google to earn revenue from UK (and pretty much all non-US) customers and have them booked in Ireland, where the associated profits are taxed at a lower corporation tax rate (12.5%) than would be applied in most countries. Continue reading “Why Google (and other multinationals) are still not paying their fair share of corporation tax”
In light of a new report showing how corporations are using secretive corporate courts to undermine national tax sovereignty, TJN has signed a letter to British Prime Minister David Cameron calling on him to call a halt to negotiations on so-called Investor-State Dispute Settlement provisions included in the framework of the Transatlantic Trade and Investment Partnership (TTIP) and a separate framework deal with Canada, known as the Comprehensive Economic and Trade Agreement (CETA).
A copy of the letter is attached at the foot of this blog.
London, 15 February 2016 – Corporations are regularly using secretive corporate courts to undermine the ability of countries to pass effective tax legislation, according to a new report, Taxes on trial: How trade deals threaten tax justice. The report warns that if the free trade deal being proposed between the EU and the USA were to come into force, it would massively increase the ability of corporations to sue member states of the EU over measures such as windfall taxes on exceptional profits, or use of taxation as a policy instrument such as a possible ‘sugar tax’. Continue reading “TTIP threatens ability to enforce fair taxes on corporations – report”
From the Financial Transparency Coalition:
Dutch government plans to grant public access to beneficial ownership register
Earlier this week, the Dutch Finance Minister, Mr Dijsselbloem, announced that the government would make the upcoming register of beneficial ownership, the so-called UBO-register, open to the public. This is in line with what the majority of parliament voted for in March 2014, and means the Netherlands will join a growing list of countries that have decided that the public should have access to this information.
Read the full details here.
On a second matter the UK Chancellor (Finance Minister), George Osborne, has continued to move towards our position, as earlier indicated, with this statement (about 29:25 minutes in):
“On the issue of Country by country reporting, it’s a big step forward, but i think we should be moving towards more public Country by Country R, in other words making this information publicly available: and this is something that he UK will seek to promote internationally.”
Recently, amid the furore over Google’s surprisingly low tax payments in the UK and in other countries, it has been suggested, as one observer put it to us:
“The claim is that international tax law accrues profits to where products are created, and not where sales are made. For example, a UK company that makes lots of sales in the US still pays most of its corporation tax in UK.”
Continue reading “Which countries have the right to tax Google’s income?”
Call for Papers: Third Annual Amartya Sen Prize Competition
Submission Deadline: August 29, 2016
The third Amartya Sen Prize is soliciting papers on the non-revenue impact of curbing illicit financial flows.
Poor populations are hurt when rich individuals and multinational corporations surreptitiously shift trillions of dollars in wealth and profits out of less developed countries. One harm arises from the loss of tax revenues incurred by their governments. By concealing their profits or wealth, MNCs and individuals evade taxes on profits, dividends, interest and/or capital gains—taxes that could fund social spending or tax reductions for ordinary citizens.
This year’s submissions are to focus on the other harm from illicit financial outflows: the loss of capital to a poor country’s economy, which may well substantially exceed the revenue loss.
Read more here.
Cayman: From the tax haven book The Heavens
Cayman politicians love to pretend that they aren’t living in a tax haven. No, they’re part of a responsible international financial centre. And, as we’ve remarked ad nauseam, they all say that. It’s almost a defining feature of tax havens (or, if you prefer to emphasise one important aspect, secrecy jurisdictions.)
Now Cayman has a particularly pernicious piece of secrecy legislation, known as the Confidential Relationships (preservation) Law, under which you can go to jail for up to four years, not only for divulging confidential information, but merely for asking for it. (See Sections 5(1) and 5(2) here if you don’t believe us, then ponder what it would be like to sit in a Cayman jail for four years. Nasty.) We should also add that this is just one aspect of Cayman’s secrecy offerings: scroll down to the bottom here for more details.
Well, now some interesting developments. From Cayman News Service:
“Opposition Leader McKeeva Bush has accused the financial services minister of failing to protect Cayman’s financial services sector because of what he claims are agreements made with the UK and plans to dismantle Cayman’s secrecy law.”
Continue reading “New signs that Cayman might dismantle its secrecy law”
From Fools’ Gold:
Recently we wrote an article entitled The Ideologists of the Competitiveness Agenda, in which we fingered the Big Four firm of accountants as among the most important vectors for the general idea that countries simply have to ‘compete’ in certain ways: namely, to shower goodies at wealthy people and multinationals, for fear that they’ll relocate elsewhere. As we’ve often argued: that attitude is not just misplaced, but generically harmful.
Now, here’s a recent example of a Big Four firm, PwC, playing the “competitiveness” game, in a lobbying document report purporting to assess the fiscal regimes for gold mining in four African countries. (Thanks to Mark Zirnsak of Tax Justice Network Australia for pointing this one out.)
Continue reading “PwC: using ‘competitiveness’ as crowbar to lobby for mining cos”
A new guest blog by Atul K. Shah, Senior Lecturer, Suffolk Business School, University Campus Suffolk, UK. This is based on a paper Shah first presented at a Tax Justice Network Research Workshop at City University in June 2015, and it follows a more focused piece last month calling for a probe into KPMG: a call that was cited in the Financial Times. Cross-posted with Tax Research UK, slightly adapted.
Dr. Atul Shah
A Case Study of KPMG and its Regulatory Arbitrage Services
By Atul Shah
Recent news regarding tax avoidance and unethical banking cultures are putting an increasing spotlight on the Big 4 Accounting Firms and their independence, professionalism and conflicts of interest. Scholars are beginning to question their huge power and influence in global accounting, auditing and tax, yet little is known about exactly how they practice regulatory arbitrage and the extent to which it is structural and systemic, and how they continue to get away scot free from major financial crises and corporate failures. In the case of the audit failure at HBOS, KPMG have still not been independently investigated eight years after the loss of billions of pounds, thousands of jobs and huge losses for investors, pensioners and retirees. Continue reading “KPMG: Professional Chameleons Or Independent Public Auditors And Regulators?”
This is a speculative blog based initially on a couple of conversations with people in the industry, with some supporting evidence.
A (slightly tidied-up) conversation we’ve just had went along these lines:
“You’ll never guess what is the new Switzerland for Asia. And I mean big time. The Asian money is heading there. Banks set up there as its a financial centre that doesn’t tax foreigners. And its perceived as safe, and not a signatory to the CRS [The OECD’s Common Reporting Standard.] TAIWAN.”
Now, what to make of this?
We’ve pointed to a draft of this before, but here is the final published version, in the British Journal of Politics and International Relations, a paper by two TJNers and Duncan Wigan of the Copenhagen Business School. (It’s also available here.)
The abstract goes like this:
The Global Financial Crisis placed the utility of financial services in question. The crash, great recession, wealth transfers from public to private, austerity and growing inequality cast doubt on the idea that finance is a boon to the host economy. This article systematizes these doubts to highlight the perils of an oversized financial sector. States failing to harness natural resources for development led to the concept of the Resource Curse. In many countries, resource dependence generated slower growth, crowding out, reduced economic diversity, lost entrepreneurialism, unemployment, economic instability, inequality, conflict, rent-seeking and corruption. The Finance Curse produces similar effects, often for similar reasons. Beyond a point, a growing financial sector can do more harm than good. Unlike the Resource Curse, these harms transcend borders. The concept of a Finance Curse starkly illuminates the condition of Britain’s political economy and the character of its relations with the rest of the world.
This builds on the original Finance Curse document from May 2013, based on Shaxson’s and Christensen’s extensive work in mineral-dependent countries and in financial centres.
We will store this permanently in our Finance Curse page.
Actor Greg Wise was so disgusted by the evidence of how HSBC bank helped its clients evade taxes through its Swiss subsidiary, he got angry, very angry indeed. So he turned undercover investigator to expose the disgraceful lack of ethics of the tax dodging industry. As one of the tax dodging adviser explains in the programme: “tax, as I say to all clients, is voluntary. You can choose how much you want to pay. Its pretty much down to your moral barometer.”
Greg brings some levity to a subject — and the video will boil your blood. Watch the programme on Channel 4 at 8 p.m. on Monday 8th February – view the trailer here
Read this to share Greg’s anger about HSBC and the world’s favourite drug cartel.
Congratulations to our partners at the Global Alliance for Tax Justice who have jumped straight in to number ten position in the International Tax Review’s global ranking of who’s who in the tax world. Continue reading “Global Alliance for Tax Justice jumps to top 10 of global rankings”
The Tax Justice Coalition Pakistan has just published the following video animation detailing how poor and middle income households in that country carry 75 per cent of the tax contribution, and outlining measures required to restore a degree of progressiveness to what is an increaingly unjust tax regime. Continue reading “A new whiteboard animation from the Tax Justice Coalition Pakistan”
Caught on camera
Earlier this week we blogged a groundbreaking exposé of how US law firms advise on shifting dirty money into the USA. Now we hear that bipartisan legislation is being proposed to help stamp out corruption, money laundering and tax evasion by curbing use of anonymously-owned companies in America. Continue reading “Tax Haven USA: Congress moves to end corporate secrecy”
We’ve just received a copy of the final Communiqué of the 6th Citizen’s Continental Conference which took place in late January in Addis Ababa. This year the conference, which precedes the African Union Summit, had human rights as its core focus, with a particular focus on the rights of women. Continue reading “Civil society calls on African Union to prioritise financing human rights for women”
One year ago, Tax Justice Network published a blog detailing the ways in which the USA is steadily turning itself into a vortex-shaped hole in the global financial system. Others have picked up on the theme, including The Economist which rightly labelled the USA as “the mega-haven”. Now, according to London’s Evening Standard newspaper, tax advisers at exclusive Rothschild Trust are (nearly, but not quite) joining the bandwagon. Continue reading “Tax Haven USA – part two: Rothschilds (nearly) confirms Tax Justice Network position”
Ground-Breaking exposé by Global Witness shows how the corrupt can exploit anonymously-owned companies Continue reading “Tax Haven USA – part one: 12 New York law firms advise on how to move dirty money to the USA”
Responding to the UK government’s poor handling of tax negotiations with Google, Nigel Lawson, climate change denier and architect of one of the biggest boom-bust recessions of modern history, has told the Daily Telegraph that the corporate income tax has “had its day”. Instead he proposes a “much” lower rate with a tax on corporate sales. Continue reading “Nigel Lawson, not the corporate income tax, has had his day”
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For a longer read on this kind of thing, try this. And from the same http://artsandhealth.ie/diclofenac/ source as the cartoon, in the context of current news:[/vc_column_text][vc_raw_js]
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The European Commission has announced:
“The European Commission has today opened up a new chapter in its campaign for fair, efficient and growth-friendly taxation in the EU with new proposals to tackle corporate tax avoidance. The Anti Tax Avoidance Package calls on Member States to take a stronger and more coordinated stance against companies that seek to avoid paying their fair share of tax and to implement the international standards against base erosion and profit shifting.”
TJN has found the proposals disappointing, to say the least. A TJN statement follows. Continue reading “Europe’s Anti Tax Avoidance Package: adding fuel to the fire?”
Here is the text of a letter of complaint that TJN will be handing in to the European Commission at its office in London this afternoon.
On 23rd January 2016 the UK Chancellor of the Exchequer, George Osborne, tweeted from Davos that the UK Government had struck a deal with Google over its past tax liabilities. The deal was disclosed at the specific request of Google.
TJN is concerned that deals have been secretly struck with by HM Revenue & Customs with other companies which have not been disclosed to the public.
We are therefore calling on the European Commission to investigate the Google deal, and also to investigate other so-called sweetheart deals with multinational companies that have not been publicly disclosed.
Read our letter below
Continue reading “TJN calls on EC to investigate all of the UK’s secret tax deals”