Tuesday, May 20, 2008

International News - May 20

Magnitudes: dirty money, lost taxes and offshore May 20 (TJN) - The magnitudes section of the TJN website is slowly but steadily being expanded. More information is now available. Comments welcome.

EU Savings Tax Directive - Part 2
May 15 (TJN) - We have just blogged on the meeting of European finance ministers on the Savings Tax Directive - a vitally important, if flawed, tool against international tax evasion. We can report significant progress.

Proposed Surtax on Millionaires to Help Veterans Would Be a Tiny Sacrifice for the Richest 0.3 Percent
The U.S. House of Representatives took votes on amendments to an emergency supplemental spending bill to fund military operations in Iraq and Afghanistan. The legislation includes a small surtax of 0.47 percent on gross income over $1m for married couples and over half a million dollars for other taxpayers. New CTJ figures
show that in 2007 only 0.3 percent of taxpayers were rich enough to be affected by such a tax.

Belize Bank: A $10m mystery
The Economist investigates Belize Bank, a story involving Michael Ashcroft, the offshore financier of the UK’S Conservative party. Also involving Venezuela, Taiwan.

May 19 (Tax Research) – UBS has predicted a gradual erosion of governments’ ability to tax. The comment was made in response to the supposed exodus of companies from the UK. Why is the CBI happy about this? Why are the British Chamber of Commerce happy about this? Why are the IoD happy about this? Which party is going to turn round and say that this is wrong: we are taxing the wrong enterprises? TJN has been saying this for a long time. Tax justice favours small business.

Call for papers for a special Issue of Critical Perspectives on Accounting: Critical Perspectives on Taxation
Guest Editor: Dr. Sheila Killian, Kemmy Business School, University of Limerick, Ireland. Manuscripts for this special edition should be submitted directly by email to the Guest Editor at sheila.killian@ul.ie The deadline is 31st January, 2009.
No link available.

Transparency International Press Release on Tax Haven
May 15 (Transparency International) - Transparency International, India is concerned over the attitude of the Indian Government in seeking information from the German Government about millions of dollars of un-accounted-for money, belonging to the people of India, lying in Liechtenstein, a small country near Germany.

Swiss banker blows whistle on industry
May 15 (FT) - A Swiss banker has lodged a case with the European Court of Human Rights against Switzerland's rules on bank secrecy. Also see TJN blog on this.

Comment: Funds hedge their Swiss bets
May 19 – Financial News - The creation of a Geneva-based hedge fund business by private bank Lombard Odier Darier Hentsch has rekindled the idea of hedge funds moving to Switzerland from London en masse.

Cindy McCain's Tax Returns Called For By Three Op-Eds
May 14 (Huffington Post) - Cindy McCain's declaration that she would never produce her tax returns has struck a chord with a few editorial pages around the country. In the past two days, the Washington Post, Washington Times and the New York Observer have all penned demands that Cindy come clean on her fortune.

Sen Panel OKs Blocking Funds From Cos With Offshore Tax Shelters
May 15 (Dow Jones) - The U.S. Senate Appropriations Committee on Thursday approved an amendment to a supplemental war-funding bill that would block funds from going to companies with offshore tax shelters. Also see NYT editorial.

The Great Tax Cut Delusion and the Decline of Good Government in America
May 17 (TaxProf) - According to political scientist Bryan D. Jones and policy analyst Walter Williams, tax cuts are bad for the American people. In their new book, ... they draw on in-depth research and insightful analysis to argue that tax cuts without spending limits have harmed the government’s long-term fiscal stability, and explain why, despite evidence to the contrary, people keep believing that reducing taxes will create economic growth.

Companies leaving the UK: what will we lose?
May 15 (Accountancy Age0 - Let’s not worry about companies leaving the UK for tax reasons. For a start, the tax loss looks likely to be minimal. And how many execs will want to trek out to some far flung tax haven to work? Not many. If it really is the case that companies without the best will wither and die, then those companies fleeing our shores will not be long for this world.

Willbros to pay hefty US fine in Nigeria, Ecuador bribery probe
May (AFP) — Willbros, an oil and gas industry services firm, has agreed to pay over 32 million dollars in fines and forfeitures to settle accusations of bribing Nigerian and Ecuadoran government officials, the US Justice Department said Wednesday.

Editorial: The tax avoidance mafia
May 14 (Cayman Net News) - Sooner or later more people are going to draw the parallel between the high standard of living enjoyed by Cayman residents with the grinding poverty found in other less well off countries that may be exacerbated by tax avoidance and/or evasion facilitated by the Cayman Islands.

Transfer pricing forms key part of IBSA alliance
May 15 (TP Week) - A trilateral alliance of the governments of Brazil, India and South Africa has decided to focus on transfer pricing as a key economic theme. IBSA, which was formed following a G8 meeting in Evian in 2003, examines economic and social issues which are relevant to the three countries. Also see: Somerset West Ministerial Communiqué, India – Brazil – South Africa (IBSA) Dialogue Forum, 11 May 2008

How big UK groups paid no corporation tax in 2007
May 20 (UK Times) - Research by The Times shows that FTSE-100 companies – Cadbury, Standard Chartered and British American Tobacco, which have a combined market capitalisation of £75 billion, employed almost 11,000 UK staff and generated more than £6 billion in global profits, – paid zero corporation tax in Britain last year. Quoting TJN’s Richard Murphy.

Richard Murphy examines Tesco’s accounts and argues that the Guardian’s enquiry was quite legitimate.

EU commissioner sees support for tax haven clamp-down
May 15 (AFP) — EU Tax Commissioner Laszlo Kovacs said Wednesday he saw support among finance ministers in the bloc to broaden out rules against tax dodgers who stash cash in offshore accounts. (For more on the European Savings Tax Directive, see http://taxjustice.blogspot.com/2008/05/european-savings-tax-directive.html )

On the offensive: How Gunvor rose to the top of Russian oil trading
May 14 (FT) - Investigation into one of the world’s fastest-growing – and most secretive – oil traders. It is owned by a holding company in the Netherlands, Gunvor International BV, which is in turn owned by one in Cyprus, Gunvor Cyprus Holding Ltd. The ownership of the Cyprus entity ends at another postbox holding structure in the British Virgin Islands. “It’s an absolutely closed box,”

HMRC Publishes Draft Changes To Offshore Funds Regulations
May 20 (Tax-News.com) – UK Revenue and Customs (HMRC) on Friday published a set of partial draft regulations regarding changes to offshore funds regulations for comment, and
to show the intended use of the powers in clauses 38 and 39 of the Finance Bill 2008.

FBI serves subpoenas on BAE chief and US colleagues
May 19 (Guardian) - Attempts by BAE to escape allegations of corruption in Saudi arms deals seemed to have failed last night as the arms company admitted that FBI agents had picked up its chief executive, Mike Turner, and served subpoenas on him and US colleagues.

UK’s Cameron harks back to Thatcher on taxation
May 19 (Guardian) – UK Conservative Party leader David Cameron will today issue his clearest signal that a Conservative government would aim to cut taxes when he declares that Britain has reached the "limits of acceptable taxation" and revives landmark declarations by Margaret Thatcher.

May 19 (Tax Research) – Before David Cameron say too loudly that Britain has reached the limits of acceptable taxation he should reflect on an FT poll showing that Strong majorities in five European countries - ranging from 76 per cent in Spain to 87 per cent in Germany - consider that income inequality is too great. And 78 per cent of respondents in the US, traditionally seen as more tolerant of income inequality, also think the gap is too wide.

Köhler attacks markets ‘monster’
May 14 (FT) - Global financial markets have become “a monster” that “must be put back in its place”, the German president (and former head of the IMF) has said, comparing bankers with alchemists who were responsible for “massive destruction of assets”.

Dutch move to limit big payouts for chief executives
May 13 (IHT) - Jan Bennink became famous in the Netherlands not for his boardroom success, but for cashing in stock options, performance shares and bonuses worth around €80 million, or $124 million, when Danone snapped up Numico for €12.3 billion last year. The compensation created such a public furor among the egalitarian Dutch that the government is backing an unusual law that takes a first crack at curbing such windfalls.

Global wealth survey: the data in full
April 20 (FT) - The ranks of the world’s rich swelled to 8m during 2007 as the wealthy proved immune to the strains across global economies in the latter half of the year. Below we publish the data. Detailed survey data from Knight Frank and Citi Private Bank. Also, for A global survey of the best-paid hedge fund managers, see here

Alistair Darling counts cost as party over for UK plc
May 14 (UK Times) - Lawrence Summers, a former US Treasury Secretary, has suggested that governments should co-operate in matters of income tax to avoid the race to the bottom that is troubling Mr Darling. It cannot have escaped the latter's attention that he has a common interest with other Europeans in protecting his tax revenue base. A look at the failure of the UK’s model.

Try out ‘toff tax’ for inclusive honours
May 17 (FT) - An amusing letter suggesting that British peerages and other titles should be based on taxpaying. This annual “toff tax” would be a lucrative way for the state (not the party) to collect revenue to fund the political infrastructure we demand but will not fund ourselves. It will also allow those honoured to proclaim publicly their loyalty to the nation that honours them.

For sale: one Channel island. Tax haven, has own jail
May (AFP) — For sale: tiny Channel island. Includes own jail. One of the eight inhabited Channel islands off the northern coast of France has gone on the market, the estate agency handling the sale said. There are 50 permanent residents on the island. It is also a tax haven.

Merkel faces rebellion on tax cut stance
May 16 (FT) - Angela Merkel could be forced to renounce her pledge to eradicate Germany’s budget deficit by 2011 in the face of a challenge by rebellious MPs calling for immediate tax cuts.


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