Wednesday, January 21, 2009

New German anti-tax haven law

We are getting reports of new German anti-tax haven legislation. According to the Suddeutsche Zeitung (translation here ), German Finance Minister Peer Steinbrueck

"wants a massive tightening of laws directed at states that promote tax evasion and which deny co-operation with the German authorities."

Note: we are using an imperfect web translation programme - and it's possible that we've mis-translated something here - but the broad thrust is clear. The newspaper continued:

"According to a draft bill payments to companies in uncooperative states would no longer be recognized as operating expenses, if the government issues the respective decree."

Der Spiegel newspaper said (translation here)

"The plan provides, inter alia, to make money transfers to these countries drastically more expensive. . . . On the one hand, the widespread diversion of payments through tax havens (with which many companies put their profits beyond German taxation) would be blocked. At the same time the services of banks and other helpers of tax evasion - such as Guernsey and the Cayman Islands - would become very expensive, because payments could no longer be claimed as costs for tax deduction."

Once again, we would repeat the proviso that we may have mis-translated some nuances in these articles. But it is clear that some good things are happening here.

Update: the draft legislation is here (with a strange translation here.)


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