Suitable items should be sent to taxrelief@euromoneyplc.com
Take that, and that
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Baucus and Levin could be heading for the ring |
Tax Relief hears from Washington, DC that all is not sweetness and light on Capitol Hill between the two Democrat senators leading the charge against tax havens. Carl Levin produced the first version of his Stop Tax Haven Abuse Act in February 2007, which was supported by, among others, the then-Illinois Senator Barack Obama (whatever happened to him?). It got nowhere. Levin, chairman of the Permanent Subcommittee on Investig-ations, brought forward updated legislation at the beginning of March 2 this year.
Meanwhile, 10 days after Senator Levin's new Bill, Max Baucus, chairman of the Finance Committee, the tax-writers in the Senate, also published draft legislation on offshore tax evasion. "It's like watching two schoolboys trying to trip one another up in the playground, " said the Tax Relief source in Washington.
Stop right there
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Castroneves may never has this sort of adulation again Source: www.freedigitalphotos.net |
Tax Relief admires America. For all its talk about the being the land of the free, the home of buccaneers, the place where you can make your fortune, the US tax authorities do not like it when you decline to pay your dues for being there. And no matter how famous you are, they are not afraid to parade you in public.
Helio Castroneves, who has won the Indianapolis 500 car race twice, is the latest celebrity to be hauled into court for allegedly evading paying taxes on his $5 million contract with the Penske team.
Wesley Snipes, the actor, got three years in 2008 for not filing his tax returns, so Castroneves's celebrity will not protect him from a possible six-and-a-half years in prison.
What is that exactly?
Tax Relief does not want to be too hard on revenue authorities and their approach to transfer pricing. He is sure they hope all kinds of plagues befall the genius who came up with terms such as related parties, advance pricing agreements and the transactional net margin method.
At the same time, it would be helpful if at least the staff recognised the term. A colleague in the tax press contacted the Latvian tax authorities recently to talk about some developments going on there. Part of the reply from the communications team included the immortal words: ""What did you mean by the term „transfer pricing". We are not aware of such a term. Could you, please, specify?"
Chocs away
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Doctors avoid voting for chocolate tax |
Tax Relief is happy for chocoholics that a proposal to introduce a tax on chocolate in the UK was voted down at a British Medical Association conference in Clydebank, Scotland on March 12. The man with the plan for the tax was David Walker, a Scottish doctor, who is interested in reducing obesity.
Walker believes that chocolate is no longer consumed in moderation and is adamant that the government should tax it in the same way as alcohol and cigarettes. "People have been lulled into a false sense of security about chocolate," Walker is reported to have said.
Changing spots
Tax Relief can only look on in bemusement at the speed views about tax havens are changing. Since the autumn, a momentum has built up against these places that, at one stage, looked unstoppable. Deutsche Welle reported that Christine Lagarde, the French finance minister, and Peer Steinbrueck, her German counterpart, agreed at a meeting on March 3 that global blacklist of tax havens was required.
Now, as Tax Relief writes a week before the G-20 summit, Steinbrueck is quoted as saying he does not believe there will be such a list produced in London.
Whether the move by Switzerland, Luxembourg and Liechtenstein and all those other places to sign up to OECD principles on tax information exchange was sincere or a cynical ploy, it looks like it may have worked.
Quotes of the month
"The British government claims to care about global poverty. Yet the UK plays a major role in helping companies dodge the tax they owe which could help the poor. If Brown is to put people's needs before global greed, he must shut down fat cats' tax havens."
Simon McRae from the War on Want group could not make it plainer to the UK prime minister about what his campaign is looking for
"Banking secrecy does not protect any form of tax offence. With the globalisation of financial markets and in particular the current financial crisis, international cooperation in tax matters has become increasingly important. The Federal Council will actively continue to support efforts in this regard."
Switzerland's Federal Council announcing that it will sign up to OECD standards on the exchange of information. But how many think it is sincere?
"A lot of people in the business community supported Obama. I don't know what people expected, he said he was going to make these changes all along and people went ahead and supported him and now he is doing it. And it's not going to be good for the economy and it's not going to be good for these people and it's not going to achieve his distribution of income aim, but he's going to do it anyway."
A US tax director is nonplussed at the indignation of some of his peers about President Obama's budget request. And they thought the new president would roll over and let his tummy be tickled when he got into office, did they?
