At the April 2009 G20 summit in london the big news was the supposed end of tax havens. I know: I was there.
And it hasn't happened. The OECD used the mandate it had been given and in the mot extraordinary act of accommodation and even promotion of tax haven abuse deemed that any tax haven that had signed 12 so called tax information exchange agreements was 'internationally compliant and need take no further steps to sign further deals. The fact that the San Marino - Andorra style deals that have proliferated since then count, and were clearly intended to count, show just how biased in favour of promoiting tax haven secrecy the OECD is )(and if not, how utterly incompetent it it).
The flaws in these deals are explained here.
The fact that offshore lawyers know they don't work and exploit that was recently highlighted here.
And now there's clear evidence that first of all the number of requests countries can make as a result of those flaws are minuscule (because basically, if you do not know they answer to the question you're raising it's almost impossible to ask the question). As has been reported of the Netherlands:
THE HAGUE, 27/10/11 - The Netherland seldom seeks fiscal information from countries known as tax havens, it emerges from research by Het Financieele Dagblad newspaper.
In recent years, the Netherlands has taken a lot of trouble to conclude treaties for the exchange of information with tax havens such as Jersey, Guernsey, the Isle of Man, the Cayman islands and Liechtenstein. The aim is to track down both individuals and companies that use constructions ot evade tax. A total of 28 treaties have been made, of which 18 have come into effect. The others await signature.
In total, the Netherlands only made 22 requests for fiscal information between 1 June 2008 and 1 June 2011. Over half (13) were made to Jersey. Requests were also made now and then to Guernsey. But the tax service has only once requested information from the Isle of Man, with which there has been a tax information agreement (TIEA) since as long ago as 1 January 2007.
The treaty with Liechtenstein, a country which experts say still shelters quite some Dutch 'black savers', came into effect on 1 December 2010. The Dutch tax service has made three requests to it in six months' time.
Of the requests made, the finance ministry can only say that seven replies have been received from Jersey and three from Guernsey. No information is being released about the content and quality of the replies.
So first of all it's nigh on impossible to use these deals which is why so few request are made.
And when you do make a request you don't always get a reply.
And this is what the tax havens use to claim they're transparent.
They and the OECD who partner them in this abuse should hang their heads in shame at the tax abuse they continue to unleash on the world as a result.
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Richard, I just wonder why you or anyone else actually thinks regulation and over regulation will stop tax evasion or even tax avoidance? It is beyond me that people still think today that there are any ways to stop tax avoidance and I then have to question the actual understanding of tax systems and collection. Since before the days of Jesus tax collectors have failed to plug the holes. The only successful tax collection jurisdictions are the very low to zero tax jurisdiction ones that to not over burden their citizens.
I agree with you that the tax agreements are toothless not for the reasons you state but because by the time they are implemented the money is moved to the same bank in another jurisdiction and so it will continue. There is no way to stop it rather a new approach should be implemented. You want growth in the UK? EASY make it a very low tax jurisdiction free of red tape and stupid bureaucracy and the people, companies and jobs will come. I just wonder if politicians have the brains to work it out.
Ah yes
That glorious world pre-democracy where children worked down mines, most had no healthcare, education was largely unknown, exploitation was rampant, infant mortality as high as one in tow
That world of low tax
That’s the one you want, is it?
Very politely -anyone who holds your opinion reveals something really rather unsavoury about themselves and their contempt for humanity
Is that why Switzerland and Hong Kong are such nice places to live? Using 150-200 year old examples is also a little out of date, and anyway the use of child labour had nothing to do with tax rates. It had everything to do with giant corporatist firms using their buddies in parliament to award contracts.
Which will doubtless happen again in the world so described since no doubt only those able to maintain themselves will be in parliament
Then how do you support big government? Parliament has always been since its inception run by the upper class. The mess of corporatism was created by the interaction of govt. and business. It promotes the strength of certain firms that are supported and forces the average man to have to give up his salary to bail out banks, bankrupt countries and pay for MP expenses while they jet about the world pretending to put things right.
Read the Courageous State when it is out
332 pages to keep you engaged on this issue
I’m not rewriting it here
Hold on Richard, you say rwad Read the Courageous State and that I’m not rewriting it here. Have you ever re written your views on tax avoidance? Ever changed sides? remember I have read about you since 2000 when you were showing people how to use tax loop holes. So ever re written your position on tax just so it fits with your pay masters?
I readily agree my views have changed over the years
But I never promoted tax avoidance
And I’ve explained the one article all people like to refer to – on nanny schemes in the Guardian – and why I did it to hopefully kill the scheme by publicity before there were such things as blogs and the TJN – and it worked
So of course I’ve changed, learned and developed
But the principles have not – I ran a firm that simply did not do tax abuse and I’m proud of that fact
And I don’t have paymasters…I have always been a free spirit
“Since before the days of Jesus tax collectors have failed to plug the holes.”
But that was in the time of illiteracy, no computers and a nomadic population.
Now it is easy to trace untaxed wealth — PROVIDED THE DETERMINATION IS THERE.
That hot money is electronically transferred around the world’s tax havens at the first sniff of scrutiny should not be a deterrent to “investigation” — there are some very clever software designers, usually aged five, who could soon put a trace on such activities.
“A child of five would understand this. Send someone to fetch a child of five.”
Groucho Marx
Well said
Of course we will never stop all tax abuse
I know that
But we could with transparency end a very great deal of it
Which is why lawyers, accountants and bankers oppose it
WHAT? You seem to miss what I am saying by quite a long way as well. I have not suggested “children worked down mines, most had no healthcare, education was largely unknown, exploitation was rampant, infant mortality as high as one in tow”
Low tax jurisdictions do not have children working down mines unless I have missed that maybe you could enlighten me.
Low tax jurisdictions seem to have excellent healthcare, what do you mean there is no healthcare in low to nil tax jurisdictions. Where which country, I really need to know.
Exploitation, infant mortality, sounds like high tax, print more money Africa not Panama, Monaco, Hong Kong, Singapore et al. Your argument for low tax jurisdictions is baseless and your comment are worrying to think you actually believe what you wrote. I think on my next visit to Monaco, Singapore and Panama I am going to look for the children down mines, poor healthcare or high infant mortality. Out of interest have you ever visited any of these countries?
Low tax jurisdictions only have good health care etc because they steal from other countries now
If all countries had low tax then the outcome I predict would arise all too soon
So you condone theft to which you turn a blind eye too….I’ll add it to the charge sheet
Hold one one moment Richard. You say low tax jurisdictions steal from other countries. What evidence do you have to back this up? If a county implements a tax strategy for its citizens how can you say they are stealing money from other countries? The strategy would be for the country to implement and when done so if others wish to take advantage of that strategy is it not up to the individual rather than saying a country is stealing from another?
You seem to neglect to reply to your statement that “children worked down mines, most had no healthcare, education was largely unknown, exploitation was rampant, infant mortality as high as one in tow” and you do not confirm you have ever visited one of these low tax jurisdictions. I therefore take it that your opinion is based on 3rd hand information rather than truth and experience.
Wanting to add charges” to my rap sheet would seem somewhat infantile as all we are doing is discussing different views. Like you I believe tax evasion is wrong in the UK and a criminal offence. I am suggesting a new way should be explored high tax will cause more people to move money, hide money and leave the country with less not more. I also agree with you that the agreements with Switzerland, which by the way is NOT a low tax jurisdiction for its citizens, are useless. Increased tax and getting agreements with countries that will not hold any money by the time the agreement comes into force are useless.
Yes of course I have been to those places
And have written about them extensively
See http://www.amazon.co.uk/Tax-Havens-Globalization-Cornell-Studies/dp/0801476127
If you do not think the purpose of tax havens is to steal other nations money then you’re naive as well as either stupid or nasty
Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
Editor:
These comments are time wasting and have been deleted
Tony
A low tax jurisdiction with excellent public services is a contradiction in terms.
Where they exist somebody in another part of the world is paying for it.
Probably with their lives.
Your arguments are at times convulted – but never convincing.
Read more.
Editor: Comment deleted
You may have a go at me but not other contributors
Richard
Of course they are effectively stealing from other countries. Look at all UK raised funds buried in low tax areas and not paying ANY tax here in the UK, not even a small amount.
I agree that there will always be tax avoidance, but that is no reason to accept what is happening. it is not a valid response to say that because it cannot be sorted out 100% then we should do nothing at all.
I agree
Those who argue like that might also say we should not tackle crime as we cannot stop it
If the PSG has any bias of opinion it is simply and innocently in defending the welfare of hundreds of often low income pensioners.
With at least ten years experience of exchanging ideas and augments with a number of bodies associated with the governments of Jersey, Guernsey and the Isle of Man the PSG can simply report that it would not trust any of them further than an eighty year old person could throw them!
Be warned these islands are controlled by greed, avarice and indifference to the provenance of capital. Never, ever bank or invest a single cent on any of them.
But when the little persons get into the act:
But an HMRC spokesman said: “The schemes rely on an interpretation of law that produces an outcome different from that envisaged when the law was enacted, and that HMRC does not accept.”
http://www.bbc.co.uk/news/business-15479321
John m
That is interesting. Using the advert “this is a tax avoidance scheme”, it seems any old shyster can wring money out of any old idiot.
My first reaction was “well, serve them right”, but if someone says “I can’t afford this house but we’ll just stretch if XYZ Ltd help us escape all the Stamp Duty” & buy it through one of these schemes, then, when HMRC come for their money & they lose the house, that will be harsh for their children, pets etc.
Not a decent business, even by the low standards of financial services.
My personal slant is that “any-old-person” has read so much about tax avoidance being legal that they easily fall for such a thing.
My other personal consideration is if HMRC can adopt the “The schemes rely on an interpretation of law that produces an outcome different from that envisaged when the law was enacted” reason for acting, then it is about time they started getting their heads out of the sand for the schemes that rely on an interpretation of law that produces an outcome different from that envisaged, when it is in the multi-billions and not just a few million.
But, of course, since the bread and butter money comes from those who can [now] only afford out-of-sell-by-date bread and marg, they immediately jump on the little people trying to board the gravy train.
At the end of the day, given the favoured terms that multi-nationals are by HMRC, one is driven to the conclusion that there is a considerable amount of, if not corruption, then incompetence, in their action/s.
Anyone for Ermine ?