International News - June 24
** Also see this permanent list of past story summaries; see and Offshore Watch for more stories. **
The UN is failing on international tax - so the OECD calls the shots
June 20 (TJN) - Dries Lesage of Ghent University, who was part of TJN's delegation to the UN Tax Committee in Geneva in late 2007, has recently published a new report about the role of the UN in international tax and the financing for development (FfD) process around Doha.
Tax and the IMF's policy advice
June 19 (TJN) - IMF advice to developing countries on aspects of tax policies appears to have contributed strongly to inequality, according to a new briefing paper prepared for the Bretton Woods Project by three researchers at the London School of Economics.
International Accounting Standards, again
June 20 (TJN) - We have already reported several times on the International Accounting Standards Board (IASB) TJN's Richard Murphy has now been in discussions with the IASB. He describes what happens, in his latest blog.
A One-Time Tax Break Saved 843 U.S. Corporations $265 Billion
Some 9,700 United States corporations had foreign subsidiaries in 2004. While only 843 corporations took advantage of the tax break, those companies are the biggest and wealthiest in America. A 2007 academic study found that the tax break did not stimulate investment in the United States economy and that repatriated money was often used for disallowed purposes, like stock repurchases. “It basically worked out to be one big giveaway,” said Robert Willens, a tax and accounting authority in New York. “The law never took into account the fact that money is fungible.”
UBS shares hit by talk of further losses, tax evasion case
June 22 (AFP) - "In a worst case scenario, UBS could lose its banking license which could have adverse effects on the global private banking franchise."
Ex-UBS Banker Pleads Guilty in Tax Evasion
June 20 (NYT) - Prosecutors and lawyers for Mr. Birkenfeld contend that he was not a rogue employee but rather part of an broad effort by the bank to flout American tax laws with offshore banking services sold to wealthy Americans. Justice department press release here: http://www.usdoj.gov/usao/fls/PressReleases/080619-01.html
Salinas funds finally head back to Mexico
June 18 (Swissinfo) - Switzerland will hand over $74 million (SFr77.3 million) to Mexico from bank accounts linked to the brother of a former Mexican president. The funds - more than $110 million in bank accounts linked to Raul Salinas -were originally frozen after the Swiss authorities initiated criminal proceedings against Salinas in 1995 for money laundering.
Analysis: India to check money laundering
India's lone banking regulator, Reserve Bank of India, recently blocked the application of Swiss bank UBS for a banking license in India on the ground that it was involved in $8 billion money-laundering racket.
Espagne : la justice affirme avoir démantelé la "plus importante mafia russe"
June 14 (Paradisfj) - The organisation Tambovskaya-Malyshevskaya, “the world’s most important Russian criminal structure” has been “totally dismantled” in an operation involving 400 police officers in southern Spain, the Spanish prosecutor’s offices said. In French
India Under Threat
June 23 (Tax Research) – On a report that UK business leaders are concerned that the Indian government could clamp down on the tax havens of Mauritius and Cyprus as it struggles to come to terms with soaring inflation and budget problems.
David Cay Johnston Launches Tax Notes Column
June 23 (Taxprof) - David Cay Johnston: “Our tax system is working against us. It is slowly making us poorer. And it is also making some of the already rich much richer, a perversion of historic proportions that few Americans grasp.”
House may slap taxes on BI to boost budget transparency
June 20 (Jakarta Post) - The Indonesian central bank may have to pay income tax starting next year if it records a budget surplus, a further deliberation on the income tax bill reveals. "Perhaps BI will be more transparent about its budget if it is subjected to tax."
Why the London loophole should be closed
June 23 (FT) - The proposed legislation is more commonly referred to as the “London Loophole” Act, and is somewhat akin to the “Enron Loophole” legislation recently passed by the US Congress. The legislation and the CFTC’s action are intended to close a significant regulatory lacuna - traders can arbitrage between the two markets, and the CFTC in effect regulates only half of the trading.
Obama Vows To Close "Enron Loophole" For Oil Speculators
June 23 (US News) - Obama would ensure that U.S. energy futures cannot be traded in offshore, unregulated markets; and work toward international regulation of oil futures markets, in cooperation with like-minded countries.
Tax Lawyers for Obama
June 21 (TaxProf) - Tax Lawyers for Obama: Lawyers and other professionals with a special interest in tax policy who support Barack Obama for president. Tax Policy Discussion Group: Discussion of tax policy issues from the perspective of Obama supporters, with a particular emphasis on reform and development of tax ideas that can bridge both the right and the left.
New searches in Liechtenstein tax scandal: media report
June 21 (AFP) — New searches have been carried out in Germany in a major Liechtenstein tax evasion scandal, the weekly Der Spiegel said in a report released Saturday.
Singapore: Asia's Switzerland for millionaires
An industry report by consultancy Capgemini and US investment bank Merrill Lynch said the financial wealth held by Asian HNWIs could reach a staggering 12.7 trillion dollars by 2011, growing at an annual rate of 8.5 percent, above the global rate of 6.8 percent.
Vodafone fights massive Indian tax claim
June 23 (Accountancy Age) - Vodafone is facing another tax battle, this time with the Indian taxman over a claim for $2bn (£1bn) from its purchase of controlling stake in Indian business Hutchison Essar last year. The claim is for $2bn in capital gains tax on the $11bn deal as Essar's assets are based in India
India Under Threat
June 23 (Tax Research) - On a report that “UK business leaders are concerned that the Indian government could clamp down on the tax havens of Mauritius and Cyprus as it struggles to come to terms with soaring inflation and budget problems.”
Globalisation, Tax Competition and the Harmonisation of Corporate Tax Rates in Europe: A Case of Killing the Patient to Cure the Disease?
This paper surveys the literature on tax competition, and uses it to analyse current European proposals to harmonise corporate tax rates.
Ireland is wrong to put its miracle at risk
June 22 (FT) – Wolfgang Munchau - Readers steadfastly maintain that the country’s economic success had nothing to do with the EU and everything to do with domestic policy – in particular with low corporate taxes and skilled labour. The view expressed by those correspondents is as wrong as it is revealing.
UAE updates money laundering regulations
June 22 (FT) - The United Arab Emirates has implemented new anti-money laundering regulations as it seeks to meet international standards of financial compliance. The central bank last week notified banks and exchange houses of the 13 new regulations.
Full Paris tax agenda on ice after Irish poll
June 18 (FT) - France has dropped plans to push forward with tax harmonisation under its European Union presidency, following Ireland’s rejection of the Lisbon treaty.
Investors mull exiting Netherlands over tax
June 18 (Reuters) - Private equity investors are threatening to leave the Netherlands due to a proposed law that could raise the tax they pay on investments to as much as 52 percent from 1.2 percent currently, investors said on Wednesday.
Rangel Taps Private Equity To Pay For AMT
Jun 17 (The Politico) - Folks in the private equity industry felt a jolt Tuesday when House Ways and Means Chairman Charles B. Rangel (D-N.Y.) announced his plans to raise taxes on investment income those money managers take home each year.
Clouds disturb sunny outlook
June 18 (FT) - Two storms are looming for 2008 in Switzerland's private banking sector. While the first - extremely challenging markets - may be transitory, the second - the threat to bank secrecy - looks more permanent.
Kieber Sale of Liechtenstein Data Triggers Backlash (Update1)
June 18 (Bloomberg) - Kieber is in a witness protection program because bankers, LGT clients and even drug dealers who had money in Liechtenstein are trying to find him, says Blum, who declined to identify the country that is protecting his client.
Ghana: Government Urged to Reconsider Tax Exemptions to Mining Companies
June 13 (Allafrica) - The General Secretary of the General Mine Workers Union (GMWU) Ghana, Mr. Prince William Ankrah has called on government to re-consider the tax concessions given to mining companies that operating in the country. In his view, instead of the nation benefiting from the tax exemptions the companies rather use the funds to employ expatriate workers to the detriment of Ghanaian workers with equal educational qualifications.
Tanzania: Slight Relief from Mining
June 13 (AllAfrica) - The government yesterday introduced a 0.3 per cent Alternative Minimum Tax (AMT) of the turnover on corporate entities making losses for three consecutive years, a move aimed at the lucrative mining industry. Companies that post losses annually can't pay the 30 per cent corporate tax, a provision mainly benefiting large mining sector firms which for the past decade have been declaring losses, with $1billion annual turnover.
New Report from CTJ:
House Proposal to Pay for AMT Relief by Closing Loopholes Would Make the Tax Code Fairer and Avoid Increasing the Deficit; Media Matters for America Catches Numerous Attempts to Distort Obama's Tax Plan; FY 2009 State Budget Carnage: Rhode Island; New Jersey; Florida; Delaware Budget Negotiations: Better Than Most States, But Still a Disappointment; State Transportation Woes Have Common Thread; People Will Not Automatically Love You if You Slash Taxes at Any Cost; Alabama Case Contests Discriminatory Property Tax Restrictions
Britain's new class structure
June 20 (Guardian) - Britain now has five distinct classes. The poor . . . then a wholly distinct class has now developed at the very top. What is striking is that these Babylonian excesses are now locked in more closely than ever to the exercise of power.
Offshore Jamaica - The Path Ahead
June 18 (Jamaica Observer) - International tax consultant Dr Trevor Thomas launched his book "Offshore Jamaica - The Path Ahead" . It comes just one month before the expected completion date of a study on the development of a Jamaican international financial centre by KPMG.
The UK: no place to quit.
June 17 (Tax Research) - The FT says: :Britain is the most popular destination in Europe for investment by foreign companies. Funny that: I thought everyone was leaving?
The UN is failing on international tax - so the OECD calls the shots
June 20 (TJN) - Dries Lesage of Ghent University, who was part of TJN's delegation to the UN Tax Committee in Geneva in late 2007, has recently published a new report about the role of the UN in international tax and the financing for development (FfD) process around Doha.
Tax and the IMF's policy advice
June 19 (TJN) - IMF advice to developing countries on aspects of tax policies appears to have contributed strongly to inequality, according to a new briefing paper prepared for the Bretton Woods Project by three researchers at the London School of Economics.
International Accounting Standards, again
June 20 (TJN) - We have already reported several times on the International Accounting Standards Board (IASB) TJN's Richard Murphy has now been in discussions with the IASB. He describes what happens, in his latest blog.
A One-Time Tax Break Saved 843 U.S. Corporations $265 Billion
Some 9,700 United States corporations had foreign subsidiaries in 2004. While only 843 corporations took advantage of the tax break, those companies are the biggest and wealthiest in America. A 2007 academic study found that the tax break did not stimulate investment in the United States economy and that repatriated money was often used for disallowed purposes, like stock repurchases. “It basically worked out to be one big giveaway,” said Robert Willens, a tax and accounting authority in New York. “The law never took into account the fact that money is fungible.”
UBS shares hit by talk of further losses, tax evasion case
June 22 (AFP) - "In a worst case scenario, UBS could lose its banking license which could have adverse effects on the global private banking franchise."
Ex-UBS Banker Pleads Guilty in Tax Evasion
June 20 (NYT) - Prosecutors and lawyers for Mr. Birkenfeld contend that he was not a rogue employee but rather part of an broad effort by the bank to flout American tax laws with offshore banking services sold to wealthy Americans. Justice department press release here: http://www.usdoj.gov/usao/fls/PressReleases/080619-01.html
Salinas funds finally head back to Mexico
June 18 (Swissinfo) - Switzerland will hand over $74 million (SFr77.3 million) to Mexico from bank accounts linked to the brother of a former Mexican president. The funds - more than $110 million in bank accounts linked to Raul Salinas -were originally frozen after the Swiss authorities initiated criminal proceedings against Salinas in 1995 for money laundering.
Analysis: India to check money laundering
India's lone banking regulator, Reserve Bank of India, recently blocked the application of Swiss bank UBS for a banking license in India on the ground that it was involved in $8 billion money-laundering racket.
Espagne : la justice affirme avoir démantelé la "plus importante mafia russe"
June 14 (Paradisfj) - The organisation Tambovskaya-Malyshevskaya, “the world’s most important Russian criminal structure” has been “totally dismantled” in an operation involving 400 police officers in southern Spain, the Spanish prosecutor’s offices said. In French
India Under Threat
June 23 (Tax Research) – On a report that UK business leaders are concerned that the Indian government could clamp down on the tax havens of Mauritius and Cyprus as it struggles to come to terms with soaring inflation and budget problems.
David Cay Johnston Launches Tax Notes Column
June 23 (Taxprof) - David Cay Johnston: “Our tax system is working against us. It is slowly making us poorer. And it is also making some of the already rich much richer, a perversion of historic proportions that few Americans grasp.”
House may slap taxes on BI to boost budget transparency
June 20 (Jakarta Post) - The Indonesian central bank may have to pay income tax starting next year if it records a budget surplus, a further deliberation on the income tax bill reveals. "Perhaps BI will be more transparent about its budget if it is subjected to tax."
Why the London loophole should be closed
June 23 (FT) - The proposed legislation is more commonly referred to as the “London Loophole” Act, and is somewhat akin to the “Enron Loophole” legislation recently passed by the US Congress. The legislation and the CFTC’s action are intended to close a significant regulatory lacuna - traders can arbitrage between the two markets, and the CFTC in effect regulates only half of the trading.
Obama Vows To Close "Enron Loophole" For Oil Speculators
June 23 (US News) - Obama would ensure that U.S. energy futures cannot be traded in offshore, unregulated markets; and work toward international regulation of oil futures markets, in cooperation with like-minded countries.
Tax Lawyers for Obama
June 21 (TaxProf) - Tax Lawyers for Obama: Lawyers and other professionals with a special interest in tax policy who support Barack Obama for president. Tax Policy Discussion Group: Discussion of tax policy issues from the perspective of Obama supporters, with a particular emphasis on reform and development of tax ideas that can bridge both the right and the left.
New searches in Liechtenstein tax scandal: media report
June 21 (AFP) — New searches have been carried out in Germany in a major Liechtenstein tax evasion scandal, the weekly Der Spiegel said in a report released Saturday.
Singapore: Asia's Switzerland for millionaires
An industry report by consultancy Capgemini and US investment bank Merrill Lynch said the financial wealth held by Asian HNWIs could reach a staggering 12.7 trillion dollars by 2011, growing at an annual rate of 8.5 percent, above the global rate of 6.8 percent.
Vodafone fights massive Indian tax claim
June 23 (Accountancy Age) - Vodafone is facing another tax battle, this time with the Indian taxman over a claim for $2bn (£1bn) from its purchase of controlling stake in Indian business Hutchison Essar last year. The claim is for $2bn in capital gains tax on the $11bn deal as Essar's assets are based in India
India Under Threat
June 23 (Tax Research) - On a report that “UK business leaders are concerned that the Indian government could clamp down on the tax havens of Mauritius and Cyprus as it struggles to come to terms with soaring inflation and budget problems.”
Globalisation, Tax Competition and the Harmonisation of Corporate Tax Rates in Europe: A Case of Killing the Patient to Cure the Disease?
This paper surveys the literature on tax competition, and uses it to analyse current European proposals to harmonise corporate tax rates.
Ireland is wrong to put its miracle at risk
June 22 (FT) – Wolfgang Munchau - Readers steadfastly maintain that the country’s economic success had nothing to do with the EU and everything to do with domestic policy – in particular with low corporate taxes and skilled labour. The view expressed by those correspondents is as wrong as it is revealing.
UAE updates money laundering regulations
June 22 (FT) - The United Arab Emirates has implemented new anti-money laundering regulations as it seeks to meet international standards of financial compliance. The central bank last week notified banks and exchange houses of the 13 new regulations.
Full Paris tax agenda on ice after Irish poll
June 18 (FT) - France has dropped plans to push forward with tax harmonisation under its European Union presidency, following Ireland’s rejection of the Lisbon treaty.
Investors mull exiting Netherlands over tax
June 18 (Reuters) - Private equity investors are threatening to leave the Netherlands due to a proposed law that could raise the tax they pay on investments to as much as 52 percent from 1.2 percent currently, investors said on Wednesday.
Rangel Taps Private Equity To Pay For AMT
Jun 17 (The Politico) - Folks in the private equity industry felt a jolt Tuesday when House Ways and Means Chairman Charles B. Rangel (D-N.Y.) announced his plans to raise taxes on investment income those money managers take home each year.
Clouds disturb sunny outlook
June 18 (FT) - Two storms are looming for 2008 in Switzerland's private banking sector. While the first - extremely challenging markets - may be transitory, the second - the threat to bank secrecy - looks more permanent.
Kieber Sale of Liechtenstein Data Triggers Backlash (Update1)
June 18 (Bloomberg) - Kieber is in a witness protection program because bankers, LGT clients and even drug dealers who had money in Liechtenstein are trying to find him, says Blum, who declined to identify the country that is protecting his client.
Ghana: Government Urged to Reconsider Tax Exemptions to Mining Companies
June 13 (Allafrica) - The General Secretary of the General Mine Workers Union (GMWU) Ghana, Mr. Prince William Ankrah has called on government to re-consider the tax concessions given to mining companies that operating in the country. In his view, instead of the nation benefiting from the tax exemptions the companies rather use the funds to employ expatriate workers to the detriment of Ghanaian workers with equal educational qualifications.
Tanzania: Slight Relief from Mining
June 13 (AllAfrica) - The government yesterday introduced a 0.3 per cent Alternative Minimum Tax (AMT) of the turnover on corporate entities making losses for three consecutive years, a move aimed at the lucrative mining industry. Companies that post losses annually can't pay the 30 per cent corporate tax, a provision mainly benefiting large mining sector firms which for the past decade have been declaring losses, with $1billion annual turnover.
New Report from CTJ:
House Proposal to Pay for AMT Relief by Closing Loopholes Would Make the Tax Code Fairer and Avoid Increasing the Deficit; Media Matters for America Catches Numerous Attempts to Distort Obama's Tax Plan; FY 2009 State Budget Carnage: Rhode Island; New Jersey; Florida; Delaware Budget Negotiations: Better Than Most States, But Still a Disappointment; State Transportation Woes Have Common Thread; People Will Not Automatically Love You if You Slash Taxes at Any Cost; Alabama Case Contests Discriminatory Property Tax Restrictions
Britain's new class structure
June 20 (Guardian) - Britain now has five distinct classes. The poor . . . then a wholly distinct class has now developed at the very top. What is striking is that these Babylonian excesses are now locked in more closely than ever to the exercise of power.
Offshore Jamaica - The Path Ahead
June 18 (Jamaica Observer) - International tax consultant Dr Trevor Thomas launched his book "Offshore Jamaica - The Path Ahead" . It comes just one month before the expected completion date of a study on the development of a Jamaican international financial centre by KPMG.
The UK: no place to quit.
June 17 (Tax Research) - The FT says: :Britain is the most popular destination in Europe for investment by foreign companies. Funny that: I thought everyone was leaving?
posted by TJN at 1:52 am
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