Our new events page

We have started populating a new page with events related to Tax Justice. You can find it here. It will be permanently located in the website structure: click on Topics – More – Tax Justice Events.

The page does not contain all past events. Please message us if you think we’re missing something important.

Tax Justice Events.

GFI: Illicit Financial Flows Drained $991bn from Developing Economies in 2012

From Global Financial Integrity:

Crime, Corruption, Tax Evasion Drained a Record US$991.2 Billion in Illicit Financial Flows from Developing Economies in 2012

Continue reading “GFI: Illicit Financial Flows Drained $991bn from Developing Economies in 2012”

Juncker fails to endorse demands for public registries of ownership

Blahblah as usual

Blahblah as usual

From the blog of the Bureau of Investigative Journalism:

Jean-Claude Juncker appears to have distanced himself from making registers setting out the true owners of companies and other legal entities accessible to journalists and NGOs.

The EU Commission president’s carefully worded position is contained in a letter he sent to the Bureau of Investigative Journalism at City University in London this morning.

Juncker’s stance will spark deep unease from anti-corruption campaigners.

The president of the commission was responding to an appeal earlier this week by 45 investigative journalists from 23 countries urging him to force through the introduction of  this key anti-corruption measure. Public registers of beneficial ownership will mean the disclosure  of company and trust owners across all 28 member states.

In the letter to the Bureau, the EU Commission president wrote: “In the ongoing talks on the Commission proposals our negotiators support provisions of enhanced transparency and call for systems of access to beneficial ownership information including clarification on the possibility of access by third parties who demonstrate a justified legitimate interest.”

The statement will be seen as falling short of an outright endorsement that registers will be open to all.

The beneficial ownership policy forms part of a new Anti-Money Laundering Directive which is in the final stages of negotiations between the Commission, the Council of Ministers and MEPs. The Bureau understands drafts of compromise positions are already circulating.

Final agreement is expected on Tuesday. The beneficial ownership section of the directive was overwhelmingly passed by MEPs in March.

Earlier this week, senior investigative journalists from around the world called on Juncker, who is currently under intense pressure for his involvement in the “Lux Leaks” scandal, “to ensure the EU takes this critical step in the fight against corruption, which undermines the rights of people in Europe and around the world and threatens the credibility and integrity of the European market.”

But with signals suggesting the Council of Ministers are blocking the possibility that the public can access beneficial ownership registers, Tamira Gunzburg, Brussels director of the ONE Campaign said: “It is unbelievable that amidst the outbreaks of scandals resulting from financial secrecy, the Council is trying to dilute the parliament’s call for public disclosure of who is hiding behind anonymous companies and trusts. We cannot let this historic opportunity slip by settling for anything less than full public access for anyone without exception.”

Criminals and tax abusers use complex corporate structures to cover their tracks. Often shell companies are created to allow cash to move across borders so evading detection from the police and other investigators.

To combat this, it is understood that under the new Anti-Money Laundering Directive will feature a provision that will force member states to ensure that corporate and other legal entities, that include trusts, will be required to obtain and hold “adequate, accurate and current information on their beneficial ownership”.

David Cameron has already committed to making this information publicly accessible. Denmark and the Ukraine have also committed to introduce public registers. But anti-corruption experts say for registers to be successful in combatting financial crime, as many countries as possible need to embrace the measure.

Letter From President Juncker to Mr Nick Mathiason

Continue reading “Juncker fails to endorse demands for public registries of ownership”

Quote of the day – on tax and technological innovation

Lazonick

Bill Lazonick

From Prof. William Lazonick, a widely renowned U.S. analyst of what makes successful companies:

“All of the technologies in the iPhone ­– things like touch-screen technology, GPS, and so on — originated with government spending, funded by taxpayer money.

That’s why a company like Apple should be using a substantial portion of its super-profits to support government investment in the next generation of innovation. Instead, the company runs an entire division devoted to finding ways to avoid taxation.”

Continue reading “Quote of the day – on tax and technological innovation”

Country by country reporting: are the knives already out?

TJN has been pushing for country by country since our launch in 2003, via the concept’s designer Richard Murphy. We have made astonishing progress since then: the concept has overcome pretty much all objections and seems on track to be rolled out worldwide.

But Joe Stead of Christian Aid has drawn our attention to something new and worrying that could be in the works: efforts to ensure that even as it is rolled out, access to it will be restricted or forbidden for civil society and even for many governments. This is because what is apparently being proposed is that the multinationals would only provide their country-by-country accounts to the home country, and the authorities of other countries, e.g. developing countries, would have to apply via existing double tax agreements to get access to that information. But other interested parties, such as business and investigating journalists, anti-corruption bodies, investors, and many others could be left out in the cold.

We reproduce Richard Murphy’s blog on the issue:  Continue reading “Country by country reporting: are the knives already out?”

Event in London on the Domination of “The City”

The Domination of the City: Holding the City To Account.

Tuesday, Dec 16th, 6.30-8.30 pm, Committee Room 16, House of Commons 

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TJN has long argued that the scale and power of the City of London has induced a Finance Curse which afflicts the rest of the UK.

In the coming session of the People’s Parliament at Westminster next Tuesday, a variety of speakers including Professor Prem Sikka, Richard Murphy, TJN’s John Christensen, Richard Brooks and Robert Palmer will discuss the overbearing presence of the City in Britain’s political sphere and suggest measures that can be taken to make the City more democratically accountable.

John McDonnell MP will be chairing.

**Entrance is FREE, but please allow at least 15 minutes to come through Parliament security. The nearest entrance is via St.Stephens Gate.**

 

On so-called “tax competition”

financerace

Tax wars, in pictures

Someone has just posted an article about the need for multinational companies to protect their reputations from investigation of their tax affairs.  The gist of the article is that MNCs need to step up their public relations effort to communicate their tax affairs more effectively. So we can all look forward to more corporate spin as they try to explain away their dodgy deals in Luxembourg.

But one line in particular caught this blogger’s eye and perfectly exemplifies why so many tax accountants, tax lawyers, corporate spin doctors, uncle Tom Cobley and all, are so wrong about tax avoidance. Continue reading “On so-called “tax competition””

Tax haven whistleblowers: where are the human rights organisations?

Elmer

Rudolf Elmer

Update: here’s another whistleblower victim of tax haven practices for human rights organisations to help defend. Antoine Deltour, of Luxleaks fame. 

We are big fans of human rights organisations, generally speaking, but we’re going to say some uncomfortable things about some of them here.

Yesterday we noted that Rudolf Elmer, the Swiss whistleblower who has been persecuted for years by the Swiss tax haven industry, via the Swiss courts and other arms of Swiss state, collapsed in court during a trial where he is accused of breaking Swiss banking secrecy laws. He has already spent five months in prison and he faces more: read the background here.

Continue reading “Tax haven whistleblowers: where are the human rights organisations?”

Tim Worstall: UK will never introduce a “Google Tax”

Worstall

Mr. Googletax

We’re a few days late with this, but it’s still fun.

There’s a commentator out there, a former press officer for the racially challenged and anti-European UK Independence Party, who likes to attack TJN from time to time. His speciality is the sneering, ad hominem attack: he has a record of having called women things like “bitch” and “little bitch” and using the c-word and others to describe trade unionists and people he generally doesn’t like. The commentator, Tim Worstall, is discussed in this longish article, which is well worth reading if you’ve come across him and want to get a flavour.

We normally ignore people like this but Forbes magazine, in their great wisdom, have decided to give him a platform to peddle his views — even though the violence of his opinions about tax is not matched by a commensurate level of knowledge or understanding of the issues involved. Continue reading “Tim Worstall: UK will never introduce a “Google Tax””

Luxembourg Leaks 2: Koch Industries, Disney, Skype edition

Koch Industries: Luxleaks  finds a huge internal bank buried in the labyrinthine financial plumbing of the $115bn trading giant.

Koch Industries: Luxleaks finds a huge internal bank buried in the labyrinthine financial plumbing of the 5bn trading giant.

So the next round of Luxleaks is with us. Corporate tax avoidance, as the chair of the UK’s Public Accounts Committee put it, “on an industrial scale.”

We post an array of stories below, and will write more about this in due course.

As it happens, Luxembourg is likely getting it in the neck from another quarter too: it has been exposed as a central player in a massive Mafia scandal now just starting to unfold in Italy. A scandal that also starring old friends of ours Switzerland (still persecuting and currently trying to jail tax haven whistleblower Rudolf Elmer, who just collapsed in court), San Marino, Liechtenstein and the Cayman Islands. The English-speaking press doesn’t seem to have picked up on this one yet, but they will: see this story in Italian, for instance, and its rough web translation.)

What a rogue’s gallery. Continue reading “Luxembourg Leaks 2: Koch Industries, Disney, Skype edition”

Corporate tax cuts don’t work

Tax warsThat’s the headline of a short article in the current edition of The World Today, the flagship publication of London-based think tank Chatham House. An excerpt: Continue reading “Corporate tax cuts don’t work”

OECD: tax does not harm economic growth, but inequality does

OECD growthThe OECD has produced a welcome new report whose core statement is probably this one:

“New OECD research shows that when income inequality rises, economic growth falls.”

Now that’s not a new finding, but there’s been a lot of controversy in this area for years and this is the latest study adding to the fast-growing weight of evidence that one side of the argument has got it right. Continue reading “OECD: tax does not harm economic growth, but inequality does”

Financing development: NGO input for the UN meeting in 2015

Via Eurodad, a position paper  on Financing for Development, co-signed by TJN and over 130 other civil society organisations. The paper is entitled  UN Financing for Development negotiations: What outcomes should be agreed in Addis Ababa in 2015? and it seeks to provide input from civil society groups ahead of the Third UN Conference on Financing for Development (FfD) due in Addis Ababa in July 2015.  We reproduce the Executive Summary here and the main point that is most relevant to TJN: Continue reading “Financing development: NGO input for the UN meeting in 2015”

Some quotes of the week: don’t sign OECD tax treaties

HearsonVia Martin Hearson, who has done a useful new blog on Uganda’s tax treaties entitled Uganda’s tax treaties: a legal and historical analysis. The article is by Mr. Hearson (of the London School of Economics) and Jalia Kangave of the East African School of Taxation.

For aficionados of tax and developing countries his post is well worth looking at in its entirety; we’ll just paste a few choice quotes here.

The present system of tax agreements creates the anomaly of aid in reverse – from poor to rich countries
Charles Irish, 1974

Continue reading “Some quotes of the week: don’t sign OECD tax treaties”

Jean-Claude Juncker must push through EU directive on money-laundering

EC President Jean-Claude Juncker Holds Press ConferenceVia The Guardian, a letter co-signed by some TJNers.

Update: a slightly longer list of signatories in the EU Observer, here. An investigation by the Bureau of Investigative Journalism is here, containing an underwhelming response from Juncker.

Jean-Claude Juncker must push through EU directive on money-laundering

As investigative journalists, we believe in the critical role of the media in holding institutions to account, exposing corruption, and challenging threats to the social contract between states and citizens which are so critical to democracy.

Continue reading “Jean-Claude Juncker must push through EU directive on money-laundering”

Its OK to avoid tax – we give to charity, and other b****cks!

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Now here’s a tricky public relations issue for our times: how does a band like Take That rebuild its image after being exposed as serial tax avoiders?  The Guardian’s Lost in Showbiz grapples with the problem, in light of the weak apology tweeted by Take That’s Gary Barlow:

“I want to apologise to anyone who was offended by the tax stories.” Not by the tax-avoiding, you understand, but by the stories about it. Thus, in those few brief words, Gary suggested that the real offender here is the Times journalist who exposed him.”

We at TJN are quite sure that Take That’s tax avoidance advisers will have reassured them that their dodgy schemes were totally secret, so we can well understand how bitter and twisted they must have felt towards the journalist who blew the gaff.

Which raises the inevitable question about how celebrity tax avoiders like Take That, Bob Geldoff, Bono, Katie Melua, and others, justify their actions to themselves and others.  Lost in Showbiz offers the following:

“As for what sort of tax-avoider Gary is, that’s an interesting one. Lost in Showbiz reckons there are two kinds of tax avoiders: people who lie to themselves about what they are doing, and people who believe the rest of us taxpaying idiots are being lied to. My guess is that Gary fits into the former category – the sort who, for instance, reassure themselves that it’s OK because they do a lot for charity. (Do they do 30 million quid’s worth of work for charity? No. No, they don’t. And even if they somehow did, it doesn’t absolve them from their basic social responsibilities.)”

Something for Mr “B****cks” Geldoff to mull over while he contemplates the reactions to his latest foray into saving Africa.

 

 

Dear Bundesfinanzminister Schäuble – please don’t block public registries

SCN_0001European transparency and anti-corruption campaigning organisations have sent the following letter to German finance minister Wolfgang Schäuble requesting that his government should support demands by the European Parliament that information about the ultimate beneficial owners (the true, warm-blooded humans hiding behind shell companies with nominee directors and nominee shareholders) should be made available on public registry.  The German government is apparently resisting this move. Continue reading “Dear Bundesfinanzminister Schäuble – please don’t block public registries”

UK’s proposed “Google Tax”: jumping the gun?

George_Osborne_0437Blog from Professor Sol Picciotto, Senior Adviser to TJN

The UK Chancellor of the Exchequer / Finance Minister George Osborne (pictured) on Wednesday announced that he will introduce a `diverted profits’ tax next spring. His `autumn statement’ included this short announcement:

“The government will go further to ensure that multinational companies pay the right amount of UK tax. Where multinationals use artificial arrangements to divert profits overseas in order to avoid UK tax, the government will now act. Autumn Statement announces the introduction of a new Diverted Profits Tax to counter the use of aggressive tax planning to avoid paying tax in the UK. The Diverted Profits Tax will be applied at a rate of 25% from 1 April 2015.”

No further details are available yet. What does it mean?

The intention seems to be to introduce a special new tax, not to modify international tax rules to counteract avoidance so that normal corporate income tax can apply. Yet until now, the UK has placed its faith on the multilateral approach undertaken through the OECD to deal with `base erosion and profit shifting’ (BEPS). The OECD was mandated by the G20 world leaders to reform international tax rules to ensure that multinationals can be taxed `where economic activities take place and value is created’.

A major plank of the 30-month BEPS project launched in August 2013 is to update the rules to make them suitable for the 21st century digital economy. Yet the OECD’s report on the Digital Economy released in September 2014 postponed further consideration of this problem until after other action points have been resolved. Soon afterwards, in November, the OECD released further proposals for discussion, including one which aims at the ability of companies to deliver goods and services in a country without having, under the present rules, a taxable presence.

There are two reasons why current international tax rules fail to tax firms such as Google and Amazon where they have activities. One is that they define taxable presence as requiring a Permanent Establishment (PE), which entails a physical presence. The other is that the rules, at least as currently interpreted by countries such as the UK, require the affiliates or subsidiaries of a corporate group to be treated as if they were independent of each other.

The combination of these rules allows a company such as Google to escape tax on its activities in a country such as the UK. Although Google does have an affiliate in the UK whose employees deal with customers, they are considered to provide only `marketing’ services. The actual sales of advertising are booked to Google’s Irish branch, but end up in Bermuda, having paid little tax.

Would the OECD’s proposals deal with this? It’s unclear so far. The BEPS report on abuse of a Permanent Establishment released last month proposes relatively minor tweaks. An entity could be found to constitute a PE only if it `habitually deals with customers in a way which leads to the conclusion of contracts’. It may be possible to consider that Google’s UK employees do have such dealings, but Google could redefine their functions, or move some of them, to continue to avoid this.

In any case, the proposals would not affect many other internet-based companies. For example, Amazon’s UK affiliates deal with customer support and order delivery, since sales are made directly through its website. So far the OECD has rejected the possibility that a website could or should be considered to be a PE or constitute a taxable presence.

Osborne’s proposed `diverted profits’ tax would be an exceptional measure, not based for example on a revised definition of a PE. Perhaps he intends it as a shot across the bows of other states (such as the US) which would resist a move in this direction by the OECD. Or perhaps it is a fall-back, an admission that the OECD will not be able to agree rules which could effectively deal with this problem.

It is also interesting that although the proposed rate of tax on `diverted profits’ is 25% (higher than the standard UK corporate tax rate currently 20%), the projected revenues are relatively low: £270m in 2016-7, rising to £355m in 2019-20. This suggests that the intention is either to single out only a few companies, or to apply the tax to a small part of their profits.

Indeed, the key question in international tax reform is how to apportion the tax base of multinational companies. We at TJN think that this should be addressed directly, by treating multinationals as single entities and apportioning their tax base by a suitable formula, based on factors reflecting both production (employees) and consumption (sales). The OECD proposals are likely to result in conflicting claims by states interpreting the complex rules in various ways, or special taxes such as this `diverted profits tax’ scheme.

So how will Mr Osborne quantify the `diverted profits’ which he proposes to tax?

We look forward to his answer.

 

 

 

British comedian Russell Brand on tax havens and hypocrisy

The UK tax havens and broken promises

Here be pirates

Here be thieves and fraudsters

By Rosie Sharpe, Money Laundering Campaigner at Global Witness.

There’s been much progress recently in requiring companies to put the names of the people who own and control them – their so-called beneficial owners – into the public domain.  This is really important to tackle the devastation caused by anonymous company ownership – for more information on the problem read the GW briefing. Continue reading “The UK tax havens and broken promises”

Why We Can’t Afford the Rich

SCN_0035“Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait.”  Le Père Goriot (1835) Honoré de Balzac  [“The secret of the great fortunes without apparent cause is a forgotten crime, because it has been properly done.]

Columbia University sociologist Shamus Khan has observed that rich people think of themselves as “a collection of talented individuals who have unique capacity to navigate our world.”  It is time that we, the rest of the world, took a close look at these claims.  Continue reading “Why We Can’t Afford the Rich”

Vladimir Putin, the KGB and the British and Swiss tax havens

PutinFrom the New York Review of Books, a look at a book called Putin’s Kleptocracy: Who Owns Russiaby Karen Dawisha. The review itself is fascinating, and for TJN this paragraph is particularly interesting:

“Dawisha nevertheless argues that the KGB’s return to power begins not in 2000, when Putin became president, but in the late 1980s. At that time, the then leaders of the KGB, who distrusted Gorbachev, began transferring money that belonged to the Soviet Communist Party out of the Soviet Union and into offshore accounts tended by Swiss or British bankers. At least initially, these transfers took place with the Party’s knowledge.

In August 1990, the Central Committee called for measures to protect the Party’s “economic interests,” including the construction of an “invisible” structure, accessible only to “a very narrow circle of people.” KGB operatives who already had experience with managing foreign bank accounts—they’d been funding foreign Communist parties for decades—were put in charge.”

Continue reading “Vladimir Putin, the KGB and the British and Swiss tax havens”