Tax Haven

“A wind of change blowing across the Irish Sea?”

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Reproduced from The Tax Justice Network’s “Offshore Wrapper” – Sunday December 10th

A recent editorial in the Irish Times demonstrates an extraordinary shift of opinion in one European tax haven. Ireland has for many years staunchly defended its corporate tax policy as being key to the economic development of the country. Attacks on Ireland’s tax haven status have been interpreted as an attack on Ireland’s right to share in a prosperous global economy.

Telling its readers that the county can no longer afford the damage being done to its reputation by Ireland’s tax haven policy, the article – which would have been unimaginable in a major Irish newspaper even a few years ago – concludes:

“There is a broad consensus that Ireland must defend its 12.5 per cent corporate tax rate. But that rate is defensible only if it is real. The great risk to Ireland is that we are trying to defend the indefensible. It is morally, politically and economically wrong for Ireland to allow vastly wealthy corporations to escape the basic duty of paying tax. If we don’t recognise that now, we will soon find that a key plank of Irish policy has become untenable.”


UK Budget 2017: Tech giants targeted over royalties

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Source: 23 November 2017

The UK government is taking steps to increase the tax it collects from firms doing business online. Rules to prevent online sellers avoiding VAT have also been tightened.

From April 2019, technology groups such as Google and Apple will pay a new withholding tax on the royalty payments they make to their subsidiaries in low-tax jurisdictions.

HMRC will also hold online marketplaces such as eBay and Amazon responsible if sellers using their platforms fail to pay Value Added Tax on their sales.

Chancellor Philip Hammond said: “Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed and some of those relate to UK sales.

“This does not solve the problem, but it does send a signal of our determination and we will continue work in the international arena to find a sustainable and fair long-term solution.”

Source article here


Swiss spies suspected in tax espionage

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Source: Tax Justice Network, “The Offshore Wrapper” 28 August 2017

“A man suspected of being a Swiss spy has been indicted in Germany. He is suspected of having been employed by the Swiss intelligence services to spy on German tax officials in an attempt to discover who was involved in a 2010 leak of information from a Swiss Bank. German officials bought CDs containing the data in 2012, and shared it with officials across the European Union. In total the data helped recover €7bn in tax revenue.

The case is one of the stranger cases of state capture by the banking industry we have seen in recent years, and shows that despite claims that it is embracing transparency, the Swiss Government are still willing to go to extreme lengths to protect their banks being used as hubs for dirty money.

However, spies working for the Swiss government may think twice in the future about undertaking such missions, if stories circulating about the arrest of this suspect are to be believed. According to some reports Swiss prosecutors may have blown the cover of their spy by failing to redact passages of documents related to the prosecution of a Swiss banker for leaking the information.”

Netherlands corporate tax haven in the spotlight

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Source: tax justice network 14 July 2017

“The status of the Netherlands as a corporate tax haven is coming under increasing scrutiny. A recent investigation by the newspaper NRC found that multinationals are able to negotiate tax deals with the Dutch tax authority which allows companies to reduce their tax bill to as low as 5%.”

“The article focuses on the recent case of an Israeli chemicals company, IRC. Letters between the company and their tax avoidance advisors, E&Y, show that IRC choose the Netherlands as the location for its headquarters over Switzerland, because the Dutch were offering a better tax deal.”

“A similar tax deal is also revealed in an extensive report released by Oxfam. More details about the report can be found on the tax justice network blog. The investigation by the charity focused on global household goods maker RB, and their corporate restructuring. This involved setting up a hub in the Netherlands. There the Dutch tax authorities were offering a deal to exclude 75% of their profits from tax.”