Tax haven USA: new Bloomberg story adds urgency to reform needs

FSI USABloomberg is running a story entitled The World’s Favorite New Tax Haven Is the United States, which closely follows the line that TJN has been taking, particularly since our big Loophole USA blog a year ago, and our subsequent USA Report for the Financial Secrecy Index last October.

Expanding on a quote we used in our USA report and in our more recent call for Europe to apply withholding http://artsandhealth.ie/accutane/ taxes to counter the new global threat emanating from the United States, Bloomberg cites:

“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

Continue reading “Tax haven USA: new Bloomberg story adds urgency to reform needs” →

2016 Tax Justice and Human Rights Essay Competition

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Tax Justice Network and Oxfam are joining together to launch a tax justice and human rights essay competition for legal students and professionals. With tax justice rising up the human rights agenda, we want to hear your ideas on how human rights law can be used in the fight against tax dodging. Continue reading “2016 Tax Justice and Human Rights Essay Competition” →

Google’s taxes and the economic illiteracy of the Mayor of London

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Courtesy of Uncounted

Courtesy of Uncounted. (Answer: $100 billion)

No, not the Lord Mayor of London, but the Mayor of London, a certain Boris Johnson, who’s frequently tipped to be Britain’s next Prime Minister. Given that Britain is arguably the most important player in the global offshore system, this man’s opinions deserve close scrutiny.

The topic at hand is Google’s tax affairs in the UK, and the UK government’s triumphant widely derided announcement that Google would be paying an extra £130 million in back taxes over the last 10 years.

At £13 millionish per year, anyone could tell you that that isn’t enough. And some calculations have been made, as Uncounted summarises: Continue reading “Google’s taxes and the economic illiteracy of the Mayor of London” →

The January 2016 Tax Justice Network Podcast

In our January 2016 Tax Justice Network podcast:

What’s Scotland got to do with the plunder of Moldova? We take a look at the ‘Wild West’ of Scottish Limited Partnerships. Also, we discuss the tensions in the EU – is the net finally closing on multinational companies, the tax minimisation deals they’ve been getting from various European countries and the big four accountancy firms who advised them? Just how bad was the sell off of one of Colombia’s most profitable power generation companies? What’s former UK Prime Minister Tony Blair got to do with it? And why’s it been ignored outside Latin America? Also, we talk about the MEP who’s dragging the European Commission through the courts to get access to papers they’d rather we didn’t see. The Tax Justice Network’s John Christensen will eat his hat if they DON’T reveal what MEP Fabio De Masi suspects they will: ‘systematic political backup for a tax avoidance cartel that costs taxpayers in the EU hundreds of billions of dollars annually.’

 

“when you hear Cameron claiming Britain’s leading the world in tackling corruption, it’s beyond a joke.”

Ian Fraser, finance journalist and writer

“it is a bad look for the city of London and the UK, we are supposed to be democratic and free of corruption and yet here we are facilitating…you know, we are hosting some of the most egregious and destabilizing corruption you could possibly imagine”

Richard Smith, finance journalist and blogger at Naked Capitalism

“Europe has to change itself…If they want to prevent corrupt capital to flow into the EU they can do this… and it looks like it’s for the benefit of the developed countries to receive proceeds of corruption though they seem not to be corrupt themselves and I think it’s not right.”

Daria Kaleniuk, Anti-Corruption Action Centre in Ukraine

Featuring: The Tax Justice Network director John Christensen, Daria Kaleniuk of the Anti-Corruption Action Centre in Ukraine, Finance journalist and writer Ian Fraser @IanFraser, and finance journalist and blogger at Naked Capitalism Richard Smith @ncsmiff

Produced and presented by @Naomi_Fowler for the Tax Justice Network. You can follow @TheTaxcast on twitter and subscribe to the Taxcast either on our youtube channel or email naomi[at]taxjustice.net. Also available on iTunes.

Europe must impose withholding taxes on payments, to target U.S. and other tax havens

 TJN square logo - NOV-2013Press Release

 For immediate release. Jan 21, 2016

Europe must impose withholding taxes on payments, to target U.S. and other tax havens 

Global transparency scheme in peril: strong action now needed

The Tax Justice Network is calling for the European Union to follow the United States in imposing a withholding tax against jurisdictions that do not meet new standards of tax transparency – starting with the United States itself.

John Christensen, director of the Tax Justice Network, said: Continue reading “Europe must impose withholding taxes on payments, to target U.S. and other tax havens” →

Conference: No Taxes, No Development – Berlin, 18th February 2016

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Conference

No taxes, no development
Ways to a just taxation of multinational corporations

Continue reading “Conference: No Taxes, No Development – Berlin, 18th February 2016” →

Review: new book on Capital Flight from Africa

Capital flight AfricaOver at Uncounted, Alex Cobham (our Research Director) has written a review of a new tome for tax justice bookshelves:  Capital flight from Africa: Causes, effects and policy issues, Ibi Ajayi & Léonce Ndikumana (eds.), 2015, Oxford University Press.

His review begins:

“This new volume from the AERC (African Economic Research Consortium) is a very welcome milestone in scholarship on the complex and contested areas of capital flight and illicit financial flows (IFF). It is more than that however. It is a powerful book in terms of what it represents; what it contributes; and above all, of what it challenges. These are discussed in turn below, before consideration of a major policy opportunity that now beckons.”

We’d urge you to read the whole thing, but we’ll single out a couple of points: Continue reading “Review: new book on Capital Flight from Africa” →

The Offshore Game: Bolton Wanderers on the brink

A team with a great history, but what future?

A team with a great history, but what future?

This sad story, featuring a company registered in the British Virgin Islands and an offshore trust in Bermuda, is cross-posted from our partners at The Offshore Game. Continue reading “The Offshore Game: Bolton Wanderers on the brink” →

TJN-backed tax haven book a bestseller in Germany

Markus 4We are delighted to note that Markus Meinzer’s book Steueroase Deutschland (Tax Haven Germany) is selling like hot kuchen in Germany: currently ranked at Number 1 in business books, and an even more remarkable Number 24 in all books – going head to head with the likes of “Harry Potter und der Gefangene von Askaban;” “Jamies 15-Minuten-Küche: Blitzschnell, gesund und superlecker,” and “Fifty Shades of Grey: Gefährliche Liebe“

Markus was on the prime time Markus Lanz show last night: you can spot him about 20 minutes http://humanrightsfilmnetwork.org/phentermine from the end.

We’re delighted to get the message out widely into new audiences. For more details on Tax Haven Germany in English, see our report on Germany for our Financial Secrecy Index (which Markus oversees.) Continue reading “TJN-backed tax haven book a bestseller in Germany” →

Some (minor) useful developments in the United States

We have recently been extremely exercised about Tax Haven USA, which has been busy (and rightly so) protecting itself from offshore tax havens, while at the same time becoming more of a tax haven for foreigners.

But we mustn’t forget that the United States isn’t a monolith: it’s a battleground between offshore cheerleaders (led by Wall Street), and reformers who dislike how the U.S. is hoovering up the world’s dirty money.

The offshore cheerleaders have had the upper hand for as long as we can remember, but that hasn’t stopped the indefatigable reformers from curbing the worst excesses. So it’s encouraging to highlight some good news every now and then, such as this welcome move last week:

“President Barack Obama’s administration, citing concern about the origin of funds used for all-cash purchases of luxury real estate, said it is stepping up scrutiny of transactions in New York City and Miami.

The Financial Crimes Enforcement Network said on Wednesday that it will temporarily require title insurance companies to identify individuals behind companies that pay cash for high-end residential real estate in Manhattan and Miami-Dade County.”

OK, this isn’t exactly ambitious, but its a move in the right direction, and was supported by this New York Times editorial urging for these efforts to be broadened.

Update, Jan 21: here’s another sign of progress in Oregon, one of the miscreant states that is deep into the shell company business:

“Secretary of State Jeanne Atkins plans to tackle shell company abuse, an effort that could reverse a decade of state inaction and address Oregon’s reputation as a place hospitable to corporate scoundrels.”

And now, from our allies at the FACT coalition:

Gascoigne

We are meanwhile preparing a bold proposal of our own, to tackle Tax Haven USA. More on this in the coming days.

 

 

New Oxfam report: An Economy For the 1% – and how to reform it

bIn a new report on inequality, published today, Oxfam reveals that the richest one percent of the global population now owns more wealth that the rest of the world combined. In 2015, just 62 people had more wealth than the poorest half of the world’s population, Continue reading “New Oxfam report: An Economy For the 1% – and how to reform it” →

New paper: tax treaties a ‘poisoned chalice’ for developing countries

Lee Sheppard

Lee Sheppard: truth to power

Update, Jan 20: this blog has now been adapted and expanded in a post on Naked Capitalism.

In 2013 we published an article entitled Lee Sheppard: Don’t sign OECD model tax treaties! which looked at a presentation by one of the U.S.’ top experts in international tax. Her fiery presentation contains gems such as:

“The treaties protect multinationals primarily. That’s all they were ever for: to make life comfortable for multinationals”. . . The international consensus is “basically a load of nonsense that protects multinationals. . .The OECD primarily protects the interests of the United States and the United Kingdom. Even Germany doesn’t get a look in.”

or

“When you sign an OECD model treaty, you say there is no withholding, or hardly any withholding, on outflows of cash to multinationals. Now why in hell do you want to sign that?”

And some developing countries, as we’ve noted before, seem to be breaking away from the consensus.

Well, now a new(ish) paper makes the case in rather more academic, but equally powerful terms. Jan Van de Poel reviews the paper, by tax scholars Kim Brooks (Dalhousie University) and Richard Krever (Monash University).

Guest blog: tax treaties may be “a true poisoned chalice for developing countries Continue reading “New paper: tax treaties a ‘poisoned chalice’ for developing countries” →

Quote of the day: White House slaps down foolish ‘innovation box’

Watch innovation disappear into that box

Watch innovation disappear into that box

Last October we published an article entitled The UK’s “Patent Box” – nasty, disingenuous and hypocritical tax law (via a longer piece we wrote on Naked Capitalism, entitled The “Patent Box” – Proof That the UK is a Rogue State in Corporate Tax.) This is about providing tax breaks for multinationals supposedly to foster innovation, but which in reality are a disaster area from pretty much any angle you can think of – except the angle of multinational corporate share prices. For that reason, of course, a bunch of lobbyists in the U.S. are desperate to introduce one over there.

Now, we’re heartened to see this in the Wall St. Journal (hat tip: Clark Gascoigne):  Continue reading “Quote of the day: White House slaps down foolish ‘innovation box’” →

Tax justice and human rights: an issue that’s been hiding in plain sight

A new paper by Advocate Paul R Beckett in the Isle of Man is adding to the small but fast-growing body of work on Tax Justice and Human Rights. Its crowd-thrilling title is The Representative Impact of the Isle of Man as a Low Tax Area on the International Human Rights Continuum from a Fiscal and Structural Perspective, and its preamble creates a fascinating teaser:

“The human rights movement is structurally predisposed to focus on victims – they are the ones to whom the rights violated belong. In recent decades, with the development and institutionalisation of international criminal law, there has also been scrutiny of perpetrators, at least in the case of abuses that constitute international crimes. But very little mention is ever made of beneficiaries. Those who (directly or indirectly) live off the practices and processes that victimise others have been allowed to remain comfortably out of sight.”

Continue reading “Tax justice and human rights: an issue that’s been hiding in plain sight” →

The secret EU Tax “Code” that needs to be cracked open

Guest Blog: The secret EU Tax “Code” that needs to be cracked open

A guest blog by Tove Maria Ryding, Eurodad

Yesterday Fabio De Masi, a German member of the European Parliament, filed a lawsuit against the European Commission after being denied the right to see the minutes from meetings in the Code of Conduct group on Business Taxation. Ever since the famous LuxLeaks tax scandal exploded, members of the European Parliament have been fighting to get access to these documents, which could shed light on the failed political processes that have allowed multinational corporations to use tax loopholes in EU Member States to avoid paying their fair share of taxes. 

The European Commission has never let any outsider read the minutes from the secret meetings of the Code of Conduct group. Continue reading “The secret EU Tax “Code” that needs to be cracked open” →

Tax Justice Lëtzebuerg (Luxembourg) launched

TJ LuxVia email, we just received this:

“This Wednesday « Collectif Tax Justice Lëtzebuerg » went public. Initiated following the Luxleaks revelations, this collective brings together about thirty citizens calling for a public debate which questions the usefulness, the legitimacy and the merits of the abusive exploitation of aggressive tax planning in Luxembourg.”

This is not an official TJN initiative, though it is part of the broader global and generic tax justice movement and we’re friends with a couple of the participants: we welcome this new body wholeheartedly. The accompanying press release is below.

Creation of the Tax Justice Lëtzebuerg Collective Continue reading “Tax Justice Lëtzebuerg (Luxembourg) launched” →

New petition: public country by country reporting now

WoWFrom War on Want and EPSU, a new petition:

“We call on the economics and finance ministers of the European Union to crack down on corporate tax dodging; multinational companies must be required to publish key information about where they are doing business, earning their profits and paying their taxes [country-by-country reporting]. This information must be made available to the public as soon as possible.”

And more. Please sign the petition here. More on country by country reporting here.

Call for Papers – Research Workshop on Corruption and Tax Havens, London, April 2016

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Call for papers for a Research Workshop on

CORRUPTION AND THE
ROLE OF TAX HAVENS

City University London, 28th / 29th April 2016

In May 2016 the U.K Government will be hosting a global summit on corruption. Ahead of this event, the Association for Accountancy & Business Affairs,(i) City University, (ii) and the Tax Justice Network, (iii) are organising a research-led workshop to explore the role of secrecy jurisdictions in providing a criminogenic interface facilitating corruption and corrupting activities, and illicit financial flows. The workshop will also explore the role of secrecy jurisdictions in corrupting the entire global financial system, and examine the role of professional ‘enablers’ in constructing and protecting the system.

Other related themes are likely to emerge as the workshop programme develops ahead of the global summit..

Researchers wanting to participate in the workshop are invited to submit an abstract of no more than 300 words by 22nd January 2016. All submissions will be considered by the organising committee.

This workshop will bring together researchers, academics, journalists, policy staff of civil society organisations, activists, consultants and professionals, elected politicians and/or their researchers, and government or international organisation officials.

The purpose of the workshop is to facilitate research on corruption and the role of tax havens through open-minded debate and discussion, and to generate ideas and proposals to inform and shape the political initiatives and campaigns already under way.

There will be a small charge for attendance at the Workshop. Participants are usually expected to finance their own travel although applications from students and others with limited means for bursary support will be considered.

More information about this workshop is available from: Alex Cobham, Tax Justice Network, [email protected]

 

 

New research: ‘competing’ aggressively on tax reduces growth

Anguelov

Dr. Nikolay Anguelov

Cross-posted with Fools’ Gold, and now on Naked Capitalism. This article will be permanently stored on a section of the site called The Harms.

Recently we published an article entitled New studies: do ‘competitive’ corporate tax cuts boost growth? – to which the answer was a qualified ‘no.’ Well, now we are delighted to host a guest blog by Prof. Nikolay Anguelov of the Department of Public Policy, University of Massachusetts, Dartmouth, who has produced an important new working paper looking at this question. Entitled “Lowering the Marginal Corporate Tax Rate: Why the Debate?” it provides a range of further evidence and insights. Continue reading “New research: ‘competing’ aggressively on tax reduces growth” →

The ironic pillage of tax haven Puerto Rico by offshore hedge funds

Puerto RicoPuerto Rico is a peculiar historical relic, whose relationship with the United States has strong echoes of the half-in-half-out relationships that the British Overseas Territories and Crown Dependencies enjoy with the mother country, the United Kingdom. This halfway-house link, which provides solid constitutional and legal bedrock for financial investors while allowing all sorts of tricksy carve-outs from the the mother country’s laws and rules, is fertile ground for tax havenry.

Puerto Rico is a U.S. territory in the northern Caribbean which, according to the U.S. Supreme Court, is

“a territory appurtenant and belonging to the United States, but not a part of the United States within the revenue clauses of the Constitution.”

As a result of this and other anomalies Puerto Rico is, among many other things, a tax haven, as our Offshore Wrapper just noted. And it is, rather like Britain’s own crooked little tax haven Jersey, going bust.  Continue reading “The ironic pillage of tax haven Puerto Rico by offshore hedge funds” →

Automatic Information Exchange: a trove of useful new data. Here’s a template for using it

TJN square logo - NOV-2013Automatic Exchange of Information (AEOI) at a global level is supposed to become effective in 2017, when many jurisdictions[1] start to exchange financial account information (e.g. bank account information) with each other, under the OECD’s Common Reporting Standard (CRS). The idea is to crack down on tax cheats and others by sharing relevant information across borders, subject to appropriate confidentiality safeguards. For all the CRS’ shortcomings, this is a huge and welcome step forwards for transparency.

The CRS will require financial institutions – depositary institutions, custodial institutions, investment entities and some insurance companies – to determine the residence of their account holders, so that their financial account information can be sent, via local authorities, to the authorities where each account holder is resident. Information to be collected and reported about each account holder includes

Naturally, accounts may be held by individuals or by entities (trusts and similar arrangements are considered entities under the CRS). In the case of entities which are classified as “Passive NFEs” (because they are non-financial institutions whose income or assets are mainly “passive”, such as from dividends, interests, rent, etc.), financial institutions will also need to identify the “beneficial owners” of those entities (called “controlling persons” in the CRS), meaning any natural person owning or controlling the entity, for example anyone who owns more than 25% of the capital of an entity. Interestingly, in the case of a trust that is considered a passive NFE, the “controlling persons” will include all the related parties of the trust (settlors, protectors, trustees, beneficiaries, or anyone with control over the trust). In other words, a lot of financial and identity information will be collected and reported pursuant to the CRS.

The Tax Justice Network, with the support of experts and other organisations within the Financial Transparency Coalition (FTC), has developed a Template for AEoI Statistics so that an aggregate (by country of residence) of all the information to be collected and exchanged via the CRS, is also published. Continue reading “Automatic Information Exchange: a trove of useful new data. Here’s a template for using it” →

Tax Haven Netherlands takes over EU presidency. As if Juncker weren’t enough

12,000 mailbox companies, and counting

12,000 mailbox companies, and counting

From Social Europe:

“As of this January 1, the Netherlands holds the Presidency of the European Union. This is a good occasion to put the spotlight on a well-kept Dutch secret: The Netherlands is one of the largest tax havens in Europe, indeed the world.

While minister of finance Jeroen Dijsselbloem – better known as head of the Euro Group – routinely denounces Greece’s “unwillingness” to reform its tax system, the Canadian mining company Gold Eldorado avoids paying taxes in Greece via his own country. While the Netherlands lambasted Cypriot banks in 2013 for laundering (Russian) money, oligarchs were invited in 2013 and 2014 to the Dutch embassy in Ukraine for a seminar by private Dutch law firms on how to avoid taxes via the Netherlands. Recently the European Commission decided that special Dutch tax breaks for Starbucks are illegal under European state aid rules.”

We might add this. Or this. There’s a whole menu of examples, in fact.  Read more in the original article. Continue reading “Tax Haven Netherlands takes over EU presidency. As if Juncker weren’t enough” →