Page 88 – Tax Justice Network

How Finland’s tax treaties contradict its development policies

Update for tax treaty aficionados: we are reminded that the Vienna Institute for International Dialogue and Cooperation (VIDC) published this study of Austrian tax treaties in April: Austrian Tax Treaties signed with Developing Countries – a Legal and Economic Analysis.

From Finnwatch, a report on Finnish double taxation treaties (DTTs) which analyse how fair and beneficial they are for developing countries. The report was inspired by SOMO’s similar report on Netherlands’ DTTs, published last year, although the Finnwatch report’s scope is somewhat larger, in that it includes also treaty policies on harmful tax competition. Continue reading “How Finland’s tax treaties contradict its development policies” →

Direct corporate welfare costs UK taxpayers £85bn a year

Kevin Farnsworth

We recently remarked on the good work done by Good Jobs First in highlighting state-level corporate welfare in the United States. Greg Leroy of Good Jobs First also points is towards the work by the Pew Charitable Trusts to bring more transparency to federal-level subsidies and spending. Now, from The Guardian:

“Kevin Farnsworth, a senior lecturer in social policy at the University of York, has spent the best part of a decade studying corporate welfare – delving through Whitehall spreadsheets and others, and poring over Companies House filings. He’s just produced what is, as far as I know, the first ever comprehensive audit of the British corporate welfare state.”

Farnsworth finds that the subsidies and grants paid directly to UK businesses in the financial year 2011-add up to to over £14bn – that is, almost three times the £5bn paid out that year in income-based jobseeker’s allowance.

“Add to that the corporate tax benefits, the value of the cheap credit made available to banks and other business, the insurance schemes run by the government to protect exporters, the marketing for British business laid on by Vince Cable’s ministry, the public procurement from the private sector … Farnsworth calculates that direct corporate welfare costs British taxpayers just shy of £85bn a year. This, he admits, is a conservative estimate.”
This is work that could usefully be done for other countries in the world.

Anonymous company ownership, in a picture

This is from a new Global Witness report entitled “The shell starts to crack? Real owners of Myanmar’s oil and gas blocks come forward.”

We like this picture because it shows, simply, how issues that are at the heart of TJN’s work are so multi-faceted. Illegal logging in Asia connects with the foreclosure mess in the U.S., to blood diamonds and tax evasion. Continue reading “Anonymous company ownership, in a picture” →

Tanzanian MP Zitto Kabwe calls on Commonwealth to tackle illicit capital flight

Zitto Kabwe MP

This is the transcript of the presentation by Zitto Kabwe, MP United Republic of Tanzania delivered to the 60th Commonwealth Parliamentary Conference Yaoundé, Cameroon, 2th – 10th October, 2014 Continue reading “Tanzanian MP Zitto Kabwe calls on Commonwealth to tackle illicit capital flight” →

TJN Australia demands more corporate transparency on tax

Today’s edition of the Brisbane Times carries a Comment from TJN Australia’s redoubtable campaigner, Dr Mark Zirnsak, responding to the backlash to the recent report on corporate tax avoidance by Australian companies. Continue reading “TJN Australia demands more corporate transparency on tax” →

Switzerland wants to cherry-pick “partner” countries on transparency

“Are we Swiss all criminals?” The poster asks. No. But many Swiss bankers are.

Updated, Oct 10, with additional analysis from the Swiss “Q and A“:

Switzerland has grudgingly made some important concessions on secrecy in recent years – although we’ve always been at pains to stess that it has happened an inch at a time, and usually bilaterally. Typically, this means making concessions to one country alone – most importantly, the United States, or to the European Union. Each time, it’s been in response to intense pressure. Generally, Swiss bankers have remained at the feeding trough of dirty money from developing countries, since they don’t have the political or economic clout to hurt them back in retaliation for their help-a-plunderer role. Continue reading “Switzerland wants to cherry-pick “partner” countries on transparency” →

China taking multinational corporations to task on tax

This has been brewing for some time. An extensive audit has begun in China of transnational corporations (TNCs) shifting profits for service fees and management fees that are paid to related parties, often in tax havens offshore. Continue reading “China taking multinational corporations to task on tax” →

The words ‘tax’ and ‘human rights’ – now appearing often in the same sentence

From Mauricio Lazala, Deputy Director, Business & Human Rights Resource Centre:

“Recently, I participated in the annual sustainability forum of a global food & beverage company that is highly regarded for its social responsibility policies. The Chairman confidently spoke about their progress on land-grabbings, freedom of association, and access to water. But when somebody mentioned tax avoidance as a human rights issue, he retorted that it was the first time he had heard “tax” and “human rights” mentioned in the same phrase. Continue reading “The words ‘tax’ and ‘human rights’ – now appearing often in the same sentence” →

Publishing tax breaks and subsidies for corporations – a good idea whose time has come

From Good Jobs First

The indefatigable US-based organisation Good Jobs First has sent a fascinating email, which relates to the United States but could have general relevance for other countries. This one is located at the fascinating, busy intersection between tax and transparency.

The intro:

“For many years, we at Good Jobs First have criticized GASB-the Governmental Accounting Standards Board, or “GAZ-bee”- for failing to require state and local governments to disclose economic development subsidy spending in a uniform way.
It appears that’s finally about to change Continue reading “Publishing tax breaks and subsidies for corporations – a good idea whose time has come” →

No it’s not your money: why taxation isn’t theft

A guest blog by Philip Goff.

Many political arguments start from the assumption that taxation is the government taking ‘our money’ off us. When austerity hit the arts in 2011, Dr Steve Davies of the pseudo-think-tank the Institute of Economic Affairs argued on Channel Four news [TJN: a mainstream UK television current affairs programme] that the 20% cuts to the arts didn’t go far enough: art funding should be entirely abolished on the grounds that it’s unfair to take people’s money off them by force to pay for something they may not want. Continue reading “No it’s not your money: why taxation isn’t theft” →

Tax and corporate responsibility in Denmark – new report

The Danish organisation IBIS has just released a new report on tax and corporate responsibility, as part of its wider Tax Dialogue project on corporate responsibility. It maps the policies and practice with regards to corporate tax and CSR among some of the most influential corporates and investors in Denmark. The report found that: Continue reading “Tax and corporate responsibility in Denmark – new report” →

On taxing multinationals: latest scorecard for the OECD BEPS project

Prof. Sol Picciotto

The OECD’s Base Erosion and Profit Shifting (BEPS) process is the pre-eminent global attempt to try and stop multinational corporations running rings around the world’s tax authorities. We have argued before that the OECD, a club of rich countries, has not sufficiently taken the interests of developing countries into account. We have also been involved in the setting up of a BEPS Monitoring Group, to examine how the process has unfolded.

Now, via email from Prof. Sol Picciotto, Continue reading “On taxing multinationals: latest scorecard for the OECD BEPS project” →

Country by country reporting: news from Finland, Netherlands, France

We just noted some surprising news about PwC’s report for the European Commission endorsing Country by Country (CbC) reporting for banks. Yesterday we learned (h/t Catherine Olier) of some very public new support for CbC reporting from Jyrki Katainen, the European Parliament’s Vice President for Jobs, Growth, Investment and Competitiveness.

Now we have some further progress to report, in different countries. Continue reading “Country by country reporting: news from Finland, Netherlands, France” →

Land Value Tax: back on the table in the UK

Landlords grow rich in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.

“Landlords grow rich in their sleep without working, risking or economising. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.” John Stuart Mill, Political Economy, 1848

Land value taxation, an annual charge on the value of land, has been talked about for a very, very long time. In the UK it was proposed in the people’s budget of Lloyd George in 1909, and in the subsequent election campaign it became such a hot issue the governing liberal party made a song about it, “The Land”, their election anthem in a time before party political broadcasts. You can hear the original 1909 recording here. Continue reading “Land Value Tax: back on the table in the UK” →

Developing countries and tax treaties: learning from mistakes

From Martin Hearson, whom we quoted recently on a related topic:

“One big theme from the interviews I conducted on my recent African trip is that tax officials in developing countries are really starting to raise concerns about some of their tax treaties. This is particularly true of treaties with the Nerherlands, Mauritius and other countries that can leave them vulnerable to treaty shopping, although it doesn’t stop there. Continue reading “Developing countries and tax treaties: learning from mistakes” →

Tax Justice: A Christian (Presbyterian) Response to a New Gilded Age

Recommendations for the U.S. Presbyterian Church’s 221st General Assembly (2014):

It is a basic mark of a healthy social covenant that all share in the society’s benefits and burdens. Just taxation is a foundational part of a moral society’s answer to poverty and its close relatives, inequality, economic insecurity, and social immobility. Just taxation is also a key tool for enabling communities to thrive, for advancing science and culture, and for sustaining democratic institutions. Continue reading “Tax Justice: A Christian (Presbyterian) Response to a New Gilded Age” →

PWC report endorses country by country reporting for banks

From Euractiv, a statement that would have been unthinkable even just a couple of years ago:

“Publishing turnover, staff numbers, taxes paid and subsidies received in every country banks operate in, could boost competitiveness, increase lending and bolster financial stability, the independent study by auditors PwC will find. It will fight tax evasion and not harm investment or result in excessive compliance costs for banks, the report will say once published.” Continue reading “PWC report endorses country by country reporting for banks” →

Quote of the day: Apple

From U.S. Senator Carl Levin, on Apple’s clash with the European Commission:

“Its technological brilliance is dimmed by the financial engineering of its tax lawyers and executives who have stained Apple’s reputation through tax dodging. Successful corporations don’t only make money; they meet their civic obligations by paying their taxes. The EU report has increased pressure on multinational corporations to do just that.”

That’s our quote of the day. Continue reading “Quote of the day: Apple” →

The UK’s “Patent Box” – nasty, disingenuous and hypocritical tax law

On September 26th David Quentin, a TJN Senior Adviser, wrote a blog entitled The UK’s “Patent Box” – a really nasty, disingenuous and hypocritical piece of tax law. Now an article based on this, co-authored by TJN writer Nicholas Shaxson, has been published on Naked Capitalism, the widely read U.S. finance site.

The article is entitled The “Patent Box” – Proof That the UK is a Rogue State in Corporate Tax. Continue reading “The UK’s “Patent Box” – nasty, disingenuous and hypocritical tax law” →

Mapping big corporations: the case of BP

From Open Oil:

“With over 1000 affiliate companies, BP controls a complex network of corporate entities. OpenOil, in partnership with OpenCorporates, developed a network of BP’s subsidiaries that aims to shed light on the corporate structure of the oil multinational, active in more than 80 jurisdictions and with ownership chains going up to 12 levels deep.
Only using public disclosures that BP itself has made, OpenOil and iilab established a prototype tool and methodology that can be used to facilitate investigations into other major corporate players in the extractive industries, available under: data.openoil.net.”

We aren’t aware yet of people in the tax justice using this particular tool yet, though clearly there is great potential.

Now go and explore. And if you are interested in looking into a particular company or country dataset, you can ask them: [email protected]

Exposed: Illegal Gold, Trade Mis-Invoicing And Tax Fraud In South Africa

A guest blog by Naomi Fowler, via the Financial Transparency Coalition:

A powerful 20 minute film just out from Carte Blanche, a major South African investigative news programme lifts the lid on the country’s illegal mining sector.

The film takes us on a journey where “poor, desperate people” brave gunmen to go underground to look for gold in atrocious conditions. We witness illegal gold trades by a headteacher on his own school grounds during school hours and hear from gold traders making 10 million rand a month (about $900,000).

The film shows us the “new randlords” and organised crime syndicates who rake in billions buying black market gold. But the value of this gold is only part of the story. The real money-spinner from this activity is a massive tax fraud. Continue reading “Exposed: Illegal Gold, Trade Mis-Invoicing And Tax Fraud In South Africa” →

Tweet of the day – on the BBC and tax havens

[vc_row][vc_column width=”1/1″][vc_raw_js]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[/vc_raw_js][vc_column_text]See the full story here, and the very excellent questions Private Eye asks.

And see this older story: Is the BBC scared of tax havens?

So far, we think the evidence supports this question being asked, but we remain hopeful that real change is possible — and will come, sooner than we think.[/vc_column_text][/vc_column][/vc_row]

Thank you!