Links Mar 30
Mar 29 - Foreign companies with London listings may be exempt from new anti-corruption laws, UK Justice Secretary Ken Clarke said: it "only extends to companies carrying on a business in the UK". This is a classic example of the UK degrading its regulations for foreign investors in order to attract dirty money, reinforcing London's role as a secrecy jurisdiction. Also see this, from Global Witness and this from Christian Aid.
General Electric exposed as world class tax dodger Citizens for Tax Justice
Mar 25 - Our friends at CTJ comment on General Electric obtaining a negative corporate income tax rate on its U.S. profits. Its public filings show that it had $26 billion in U.S. profits over the last five years. Instead of paying federal corporate income taxes, G.E. actually received a net benefit of $4.1 billion from the IRS over that period. See also: GE, KPMG, spin and tax avoidance Tax Research UK Mar 30.
Vulture funds law set in stone Jubilee Debt Campaign UK
Mar 28 - Good news. A landmark law to protect poor countries from so-called vulture funds is to be made permanent by the UK government. But the threat is not over - A US fund, FG Hemisphere, is suing the Democratic Republic of Congo for $100 million through the Jersey courts. Jersey - a UK Overseas Territory - gets to pick and choose which UK laws it passes, and it hasn’t passed this one as yet. See earlier blogs here and here.
Why did fiscal stimulus work in Sierra Leone during the crisis The Centre for Development Policy and Research
March 2011 - Why Sierra Leone’s proactive fiscal stimulus during the global crisis proved to be successful—despite deeply ingrained scepticism of the Bretton Woods institutions about its usefulness. Hat tip: Attiya Waris.
Budget reaction: death of UK corporation tax for multinationals confirmed Progressive Tax Blog
Mar 23 - Further to the UK finance bill: "The Budget announcement today goes even further than previous proposals to encourage multinationals to avoid UK corporation tax through moving financing profits to low-tax subsidiaries. Multinationals typically use intra-group financing transactions to manipulate taxable profits as financial capital is highly mobile and ‘hybrid’ transactions can be used to eliminate profits altogether."
Why cutting corporation tax in Northern Ireland means public spending cuts and job losses Progressive Tax Blog
Mar 28 - Comment on the UK's consultation Rebalancing the Northern Ireland Economy. Seems clear that the only way to cut corporation tax in Northern Ireland to the tax rate of the Republic of Ireland's 12.5% would be to slash spending by the Northern Ireland Executive on public services (and public sector jobs), and hope that this increases growth in the long term. A serious gamble to take with the Northern Ireland economy.
Iceland bank probe widens Wall Street Journal
Mar 29 - Probes by the U.K. and Icelandic authorities into the failure Iceland's Kaupthing Bank have widened to include Luxembourg. Arrests in connection with investigations have included high-profile U.K. property moguls Vincent and Robert Tchenguiz. See also earlier link to a Mar 18 article in the Daily Mail : "Keeping track of exactly what the [Tchenquiz] brothers did or did not lose during the crash is virtually impossible. They operate through a web of interconnected companies domiciled — mainly for tax reasons — in a number of jurisdictions, and no one outside their close-knit network knows the true extent of their worth". Hat tip: anonymous.
No federal tax expense for Bank of America Charlotte Observer
Mar 25 - Bank of America had no federal income tax expense for a second straight year and actually reported a tax "benefit" of nearly $1 billion. A 2008 U.S. Government Accountability Office report that found 83 of the largest 100 publicly traded companies have subsidiaries in offshore tax havens - Bank of America had 311 foreign subsidiaries, including 115 in tax havens. Check out Video: US Uncut's Day of Action The Nation Mar 27.
Doing God's work: How Goldman Sachs rigs the game Spinwatch
March 2011 - Goldman Sachs has cultivated political contacts around the world, not just in the US capital. Matt Taibbi famously called Goldman " a great vampire squid wrapped around the face of humanity.” Overtly the bank does not have much of a lobbying presence, but by these covert channels it gets its tentacles around our democratic process. Hat tip The Cynical Tendency.
Third party ownership rears its head again BBC
Mar 23 - In the money-driven realm of football (US translation: soccer), more financial shenanigans. A new investment fund set up by the former Chelsea chief executive Peter Kenyon and Ronaldo's and Jose Mourinho's agent Jorge Mendes will invest in the economic rights of players. It's fund is registered in Jersey to reduce tax paid by potential investors.
Banks can keep embassy accounts: US regulators Reuters
Mar 25 - Financial regulators have clarified that banks can provide services to foreign diplomatic missions and still comply with anti-money laundering laws after several major banks moved to close embassy accounts. Again, we ask the question: if there is now a suspicion of money laundering, then why were the funds accepted and accounts opened in the first place?
AstraZeneca tax deal to boost 2011 earnings BBC
Mar 28 - AstraZeneca has announced that US and UK tax authorities have agreed a deal over the pharmaceutical giant's tax bill. Similarities with the widely publicised Vodafone case which spurred UK Uncut.