Tuesday, June 17, 2008

International news - June 17

** Also see this permanent list of past story summaries; and Offshore Watch for more stories. **

UK calls for international co-operation on tax
June 12 (TJN) - The UK has had a long record in obstructing international co-operation on tax. Britain is, in fact, responsible for setting up some of the world's most abusive tax systems. So we are exceedingly pleased to see Her Majesty's Treasury speaking out about the need for international co-operation on tax.

Liechtenstein, witness protection, and the Mafia
June 11 (TJN) - A mysterious website has issued a US$7-million bounty for a now-famous whistleblower, Henirich Kieber, who recently broke open the supposedly impregnable bank secrecy of the tax haven of Liechtenstein, which for years has helped itself to other nations' tax dollars and taxable incomes and now seems to feel affronted when other nations find out about the crimes that it has facilitated.

The Incidence Brigade
June 11 (TJN) - Greg Mankiw of Harvard University has wheeled out an old argument about tax incidence: that “a corporation is not really a taxpayer at all. It is more like a tax collector.” Richard Murphy calls these people "the Incidence Brigade".

A carbon audit of the tax code
June 11 (TJN) - U.S. Senator Max Baucus has introduced legislation . . . as described earliler "The Carbon Audit of the United States Tax Code by the National Academy of Sciences would involve a review of the tax code to identify those tax provisions and policies that have the greatest influence on the generation of carbon emissions and other greenhouse gases and to estimate the magnitude of those effects.

Regulation model has failed, says Merkel
June 10 (FT) - Continental Europe should take the lead in devising new rules for financial markets because the Anglo-Saxon model of regulation has failed, German Chancellor Angela Merkel told the Financial Times. “We need to think about the relationship between capital and risk,” Ms Merkel said. “But these rules can only be discussed at an international level."
Also see here on proposals for a new International Centre for Financial Regulation (ICFR).

Demands on regulation of financial markets (statement)
June 16 (UNI) - UNI-Europa Finance calls for effective regulation of financial market and sets out 13 key issues to be addressed by regulators and companies. Including calls on transparency, tax havens, tax breaks for private equity, and more.

Throwing in the towel at the sixteenth round (Jet de l’éponge au seizième round)
June 10 (Denis Robert) - Denis Robert, who was inundated by lawsuits after the publication of his book Révélation$ (about the Luxembourg-based financial clearing house Clearstream, “which operates in more than 100 countries, including 40 tax havens”) on why he is throwing in the towel. “It is a victory for Clearstream, its lawyers, its leaders, its bankers, and its board. A victory for censorship.” In French.

Ireland insists it is not poaching British business
June 10 (FT) - The Irish government has reassured the UK, its key ally in the European debate on corporate tax policy, that it played no role in wooing UK multinationals. But some tax lawyers say Ireland has been targeting international holding companies.

Judge Rejects Charges for 13 on Tax Shelter
July 17 (NYTImes) - A federal judge dismissed charges yesterday against 13 former employees of the accounting firm KPMG, delivering a blow to prosecutors who once heralded the case as a showpiece in the government’s crusade against questionable tax shelters.

Guy Hands in tax battle over 7ft shrimp
June 15 (Times) - EMI chairman Guy Hands is one of more than 60 wealthy investors taking legal action against Baker Tilly over advice the accountant gave about tax relief available on film production companies.

High price to pay for private equity
June 16 (The Age) - Australians had a lucky escape when private equity consortium Airline Partners Australia (APA) failed to get hold of Qantas last year. The deal was to be financed by loading Qantas with debt, financed by asset stripping and using the corporate tax liability wiped out by the failure to generate profit to pay interest on the debt.

Kenya: Tax wars looming with MPs and judges
June 16 (East Africa Standard) - Finance minister Amos Kimunya has opened tax wars on two fronts — and he is unlikely to win, The Standard can report. Two roadblocks lie in the path of his ambition to tax MPs — tasked with making or amending laws — and High Court judges, who are constitutional office holders. The Finance minister's move appeared to set the Government and the Judiciary in a collision path and open conflict.

RP tax effort seen weakening
June 15 (Philippines Inquirer) - Department of Finance estimates showed that tax effort could hit only 15.1 percent next year, lower than the 15.4-percent target, if no revenue-raising measure are implemented to offset the effects of the cut in corporate tax.

US banks fear being forced to take $5,000bn back on balance sheets
June 4 (FT) - Accounting changes could force US banks to take thousands of billions of dollars back on to their balance sheets in the coming months. A key component of these global talks will be the accounting regime for off-balance sheet vehicles, with some senior regulators pressing for a global initiative to bring these vehicles back on to the balance sheet, not just in the US but in Europe as well.

Hedgeweek Comment: Hedge funds get breather in Washington tax ordeal
June 12 (Hedgeweek) - Proposed legislation that sought to alter US tax policy so that hedge fund managers using offshore tax havens would no longer be able to defer taxes on their compensation, obliging them to pay taxes immediately on this income, was blocked in the end - just.

UK most popular in Europe for foreign investment, says study
June 17 (FT) - Britain is the most popular destination in Europe for investment by foreign companies , according to a survey published today - and is likely to remain so for years to come. The tax regime came sixth as a factor, after infrastructure and the regulatory climate - and closely followed by the quality of labour.

An ‘exodus’ is not the only problem on tax
It would always be better for a company to operate in a low-tax country if all other things were equal. They never are. According to the World Bank and PwC, the US – seen by many Britons as a superior commercial environment – has higher total business taxes than the UK, which has the lowest in the Group of Eight leading industrialised nations and the fifth lowest in the European Union.

Citizens for Tax Justice
OBSTRUCTIONISM IN THE SENATE: Action on Climate Change Blocked; Like President Bush, Republican Leaders Insist on Increasing the Deficit with Tax Cuts; McCain Again Says Investment Tax Cuts Help Everyone, Reality Is That Most Goes to the Richest 1 Percent; California: New Taxes on the Horizon? Connecticut: Playing Politics with a Legitimate Crisis;
Massachusetts: How's that Mandate Working?; Bittersweet: North Carolina Looks to Increase Its EITC

A template for tax
June 10 (FT) - France intends to use its presidency of the European Union later this year to pursue plans for a single, voluntary, corporation tax base for multinational companies. FT editorial weighs it up.0

Government outlaws tax avoidance schemes
June 14 (Guardian) - The UK government is outlawing a number of offshore corporation tax avoidance schemes, one of which has been operated by Tesco, the supermarket giant has confirmed.

The U.S. cracks down on rich tax evaders
June 15 (LA Times) - A tax bill expected to be signed into law this week contains a provision designed to crack down on the roughly 500 rich people who expatriate themselves each year to avoid U.S. income and estate taxes.

This year Congress again felt the need to tighten the vise
June 15 (Nation News) - As Obama moves to become the next president of the United States, regional leaders are imploring him not to forget the economic development interests of Caribbean nations. They also want him to re-think proposed legislation before the Senate that would, if enacted, cripple the offshore financial services sector of the region's economies.

U.S. seeks Swiss help in UBS tax evasion probe
Jun 15 (Reuters) - U.S. authorities have sought legal assistance from Switzerland's Federal Office of Justice in an investigation into tax evasion through offshore bank accounts at UBS (UBSN.VX: Quote, Profile, Research), Swiss media reported on Sunday.

Tax havens: The Financial Pirates of Treasure Island
June (MO) – The Lesotho Highlands Water project, tax havens, and TJN.

Germany flags inflation concerns ahead of G8 meet
June 10 (Guardian) - Ministers were also united in their desire to see greater transparency on oil markets, Germany and France would also go into the G8 discussions seeking to address what further steps could be taken to curb tax dodging in tax havens, Mirow said.

FT series: Shedding secrecy
An FT multi-part series on shipping tycoons. John Fredriksen; Greek shipowners embracing the half-public, half-private model; Two container lines from Mediterranean foundations: Nobu Su – an unassuming-looking Taiwanese: Hong Kong’s Helmut Sohmen; Maersk McKinney-Møller,; two of the world’s biggest container lines, Orient Overseas Container Line and Evergreen Marine

Bono: helping make poverty reality
June 12 (Tax Research) - I know the messages of tax justice have reached the man. I know how they got there. And in the last couple of days I’ve had my attention drawn to an article about a talk he gave in Ireland made after those messages should have reached him. So I know he’s ignoring the issue. So I’ve bided my time. I’ve been patient. And now I’m fed up with the hypocrisy of the man.

We are no tax haven Cox repeats in the wake of Bank of Bermuda revelations
June (Royal Gazette) - Minister Cox assured the public, its partners and stakeholders in the industry that Bermuda will continue to protect the Island's reputation and defend criticisms that Bermuda is considered a tax haven.

Tesco: tax avoiding, again (this time it’s Luxembourg)

June 11 (Tax Research) - Private Eye’s dig into Tesco’s tax affairs continues. In the edition published today it has revelation of another tax avoidance scheme, this time based in Luxembourg. I guess that adds variety to the one revealed a fortnight ago in Zug, or the one about which Tesco is suing the Guardian, based in Cayman.

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