Tuesday, September 16, 2008

International News - Sept 16

** Also see our permanent list of past story summaries; see http://taxjustice.blogspot.com/ for the latest offerings, and Offshore Watch for more stories.

Europe and the anti-states
Sep 13 (TJN) – Observations about the European Savings Tax Directive.

We are not a tax haven
Sep 10 (TJN) – All the world’s tax havens, it seems, like to say “We are not a tax haven.”

Tax: the Cinderella issue
Sep 11 (TJN) – An outline of some of the recommendations made by TJN’s director John Christensen, speaking in Brussels at a meeting organised by the French government on behalf of France's presidency of the European Council, in the context of preparing for the Doha finance for Development conference later this year.

Tax justice and the superclass
Sep 11 (TJN) – That big business was a major contributor to George W. Bush’s 2004 re-election campaign was no surprise. But seen from a TJN point of view, an interesting pattern begins to take shape.

Tax "whorehouse" slings Nazi allegation
Sep 11 (TJN) – Crown Prince Hans-Adam II levels some rather strong allegations against the German government, and sparks begin to fly…

Troika of Bolsheviks
Sep 12 (TJN) - Nouriel Roubini, a former Cassandra now widely regarded as a presient sage -- the "Dr. Doom" we recently blogged - has just published an article about the US government rescue of the mortgage giants Fannie Mae and Freddie Mac, effectively the biggest nationalisation in history.

UBS aims for speedy US deal
September 14 (FT) - UBS, the Swiss bank, is trying to strike a settlement with the US over alleged breaches by its offshore private-banking unit for rich Americans within the next fortnight, in time for its shareholders’ meeting on October 2.

Swiss finmin urges UBS not to breach bank secrecy
Sept 13 (Reuters) - Swiss Finance Minister Hans-Rudolf Merz has warned UBS not to breach Swiss banking secrecy rules by handing over client details to US authorities investigating tax evasion.

Jersey’s tax morality
The Jersey Evening Post has reported that: “Forcing [tax exile] residents to pay more tax would be immoral.” So said Treasury Minister Terry le Sueur. The man has a strange perception of morality.

Cable brands tax avoidance 'corrosive'
Sep 15 (Accountancy Age) - Tax avoidance is 'deeply corrosive of the ethical basis of taxation,' the according to the shadow chancellor (shadow Finance Minister) of the Liberal Democrats, Britain’s third party, as he unveiled a package of anti-avoidance measures at the party's conference.

5 Days of Pressure, Fear and Ultimately, Failure
Sep 15 (NYT) - A crisis of confidence in financial markets on Wall Street culminated in a weekend of brinksmanship and failed appeals that caused the demise of some of the nation’s most storied financial institutions.

Bank of America buys Merrill Lynch for $50bn
Sep 15 (Telegraph) - Bank of America (BoA) has bought Merrill Lynch for about $50bn after pulling out of talks to save Lehman Brothers, capping an astonishing 24 hours on Wall Street.

Foreign shipping registers here to help tax-hit cos aid
Sep 9 (Economic Times) - A host of international shipping registers has opened shops in the city to provide Indian companies, badly hit by the huge tax burden, opportunities to register them in tax havens. The list of foreign registers include St Kitts, Union of Comoros and International Register of Marshall Island.

Evading tax since 2005, Indian oil trading firm to pay Rs 6 cr
Sep 12 (Express India) - In one of the biggest tax evasions in the state ever, a Mullanpur-based oil trading company has been asked to pay a whopping amount of Rs 6.67 crore for the period 2005-07. The State Excise and Taxation department has slapped the notice on the company for not paying any tax since 2005.

Taking liberties (and tax dollars)
Sep 15 (Guardian) - Financial institutions have long devised ways of avoiding tax. Now they're relying on taxpayers to bail them out.

Multi-million pound fraud ring is smashed
Sep 14 (Financial Mail) - Insolvency practitioners and lawyers have for the first time reclaimed millions of pounds stolen in a giant VAT fraud and hidden in an offshore tax haven.

Company paying tax in Germany can claim tax concessions in India
Sep 15 (ET) - In what could open a floodgate to tax concession claims, a tax tribunal has ruled that if a company, irrespective of its location, pays trade tax in Germany, it can claim concessions provided by the tax treaty with Germany.

Brazil Declares Delaware a Tax Haven. Nevada and Wyoming Might Be Next
Sept 11 (Brazzil.com) - On June 23, 2008, Brazil's Congress published Law 11,727/2008, which, effective as of January 1, 2009, will amend Brazil's transfer pricing regulations and expand the legal definition of tax havens. It is widely believed that these changes were made specifically so that the exotic state of Delaware could be designated as a tax haven.

Fifth of wealth funds ‘unaccountable’
Sept 14 (FT) - One fifth of sovereign wealth funds are not accountable to their domestic legislatures, according to a new survey supported by the International Monetary Fund.

Lord Ashcroft funds UK Tories from Belize tax haven
and also see here
Sept 14 (Times) – Lord Ashcroft, deputy chairman of the Conservative party, has channelled money into party funds from the Central American tax haven of Belize, despite a ban on overseas donations.

Now is the time to seize power from the markets
Sept 14 (Observer) – Following intellectual, economic and political pressure from the US to keep the state out of finance, Britain has a massively unbalanced economy. Financial services are overblown; industry undernourished. Every chief executive I have spoken to has mounting concern that the financial markets do not value what business values: research, innovation, motivated people, brand, loyalty, trust, independence.

Sierra Leone's ghetto taxpayers
Sept 12 (BBC) - People have been flocking to pay their local council tax of 5,000 leones (about $1.5, 90 UK pence) in the Sierra Leonean capital, Freetown. "To see unemployed people paying taxes has surprised a lot of people," said Herbert George-Williams, the new mayor. "We were able to talk with the unemployed and convince them they should pay their taxes to show their patriotism."

EU To Delay Common Corporate Tax Base Proposals, by Ulrika Lomas, Tax-News.com, Brussels 
Sept 12 (Tax-news.com) - Proposals for a common method of calculating corporate taxes across the European Union have been put on hold while the European Commission continues to iron out the plan's finer details, Tax Commissioner Laszlo Kovacs has revealed.

Wall Street tax avoidance ‘gimmicks’ rebuked
Sep 11 (FT) - Leading Wall Street banks have been using complex derivatives “gimmicks” to help hedge funds and other offshore clients avoid billions of dollars in taxes owed to the government, US congressional investigators say.

US tax liability figures under scrutiny
Sept 11 (FT) - A majority of large businesses operating in the US reported no tax liability for at least one year between 1998 and 2005, according to a study released by the Government Accountability Office on Tuesday.

Report: Banks helped foreigners escape US taxes
Sept 12 (AP) — Big Wall Street investment banks have designed and marketed schemes enabling non-U.S. taxpayers, including offshore hedge funds, to evade millions of dollars in taxes each year on U.S. stock dividends, Senate investigators have found.

Les autorités abkhazes souhaitent créer un paradis fiscal (Novye izvestia)
Sept 8 (RIA Novosti) – The Abkhaz president Sergueï Bagapch has said that the republic wants to become an offshore state: he said all the conditions are in place for Abkhazia to become a free zone. In French.

Fannie Mae and Freddie Mac's accounting branded a 'house of cards'
Sept 10 (Accountancy Age) - US mortgage giants Fannie Mae and Freddie Mac's accounting rules have been branded as a 'house of cards' by a senior US Senator. About half of the troubled mortgage lenders regulatory capital was made up of deferred tax credits, which could be deducted from taxes on profits.

Are banks relying on deferred tax as part of their capital here?
Sep 1 (Tax Research UK) - Adam Lent of the TUC has asked an obvious question following on from Richard Murphy’s blog about Fannie Mae and Freddie Mac relying on deferred taxation as part of their capital structure.

The IASB doesn’t buy Incidence
Sept 10 (Tax Research) - From an IASB draft report. They, correctly say that companies stand independent of those who own them. Then they are very definitely taxable in their own right and the withdrawal of funds from them should be subject to tax consequence. That somewhat blows the incidence argument apart. Also see here http://taxjustice.blogspot.com/2008/06/incidence-brigade.html

Mexico's top court says Cemex owes tax haven money
Sept 9 (Reuters) - Mexico's Supreme Court ruled against the world's No. 3 cement maker Cemex on Tuesday when it overturned a ruling that protected the company from paying taxes linked to investments in offshore tax havens.

Tax system overhaul calls grow: Thaksin put loopholes in spotlight
Sep. 8 (Bangkok Post) --Thailand's tax code needs sweeping reforms that emphasise substance over form to curb tax evasion, according to the dean of the law faculty at Chulalongkorn University. Cases such as the high-profile tax liability owed by former premier Thaksin Shinawatra's family over its sale of Shin Corp to Singapore's Temasek Holdings highlighted the need for legal reform.


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