Cayman doesn’t get the paradox

 Cayman  2 Responses »
Oct 132011
 

Cayman News Service has reported:

Industry professionals have claimed that Cayman’s recent placing as the world’s top Specialised Financial Centre in The Banker’s 2011 Ranking of Financial Centres for the third year in a row shows Cayman’s true stance in the global financial arena. This top ranking falls against a different high ranking on the Tax Justice Network’s financial secrecy index where Cayman came in as the second most secret jurisdiction in the world. “The Tax Justice Network thinks we are a loser and the international banking community thinks we are a winner – I think we all know whose opinion matters the most,” Don Seymour, managing director with dms Management Ltd said.

In the industry magazine’s list, the Cayman Islands beat its second place competitor Guernsey by a clear 8 points, while Cyprus was in third place, Jersey fourth and the Bahamas fifth.

Cayman Finance Chairman Richard Coles congratulated Cayman’s financial services industry for the achievement.

I really find this reporting quite amazing. Don’t they realise that the reports are in their own quite different ways assessing the same things? And that TJN is simple saying that what the bankers think is so fantastic is the secrecy that is so precisely placing a cost on the rest of the world in terms of tax lost, corruption facilitated, harm to real business done and gross financial instability threatening the well being of developed and developing countries alike?

Sure they can celebrate one of these awards. But of they do they have to celebrate the other too. Bbecasue both say Cayman is fantatstic at selling the abuse offshore banking has transforemd into a product.

 Posted by Richard Murphy at 9:51 am

Cayman feels the heat of Tax Justice

 Cayman, Financial Secrecy Index, Tax Justice Network, Uncategorized  3 Responses »
Oct 112011
 

Cayman News Service has reported:

Former Cayman Islands Monetary Authority chairman, Tim Ridley, believes that Cayman’s public and private sectors ought to be doing much more to defend Cayman’s stance globally, with nothing less than the islands’ financial services industry at stake. Ridley says that the recent report by the Tax Justice Network reveals a continuous need for Cayman to keep presenting what he says is the accurate position about the local financial services industry.  The former CIMA boss said that although efforts are made, they have been “sporadic” and reactive, not proactive as it needs to be.

“The recent highly subjective and somewhat ‘short on substance’ secrecy report by the Tax Justice Network underscores how essential it is that Cayman presents the accurate position whenever and wherever possible and to those that matter,” he said.

Although Ridley concedes that the Cayman Islands Government and the private sector do, for the most part, appreciate the importance of defending Cayman’s position abroad, he called the actual development and implementation of coherent strategic plans “sporadic” and “reactive rather than proactive.” Both the government and the private sector need to up their respective games, he said, by devoting significantly more time and resources to meet these challenges.

“Those who would bury places like Cayman are in deadly earnest,” Ridley said. “So the very future of the financial services industry in Cayman is at stake.”

Tim is right: we’re in deadly earnest.

It’s nice of him to acknowledge we’re also winning.

The TJN report on Cayman is here.

 Posted by Richard Murphy at 8:01 am

I think I’ve upset Cayman. My crime today? Living in a modest house

 Cayman, Financial Secrecy Index, Secrecy jurisdictions, Tax Havens, Tax Justice Network, Uncategorized  12 Responses »
Oct 062011
 

The Cayman Islands official news service hasn’t taken kindly to Cayman being ranked at number 2 in the new Tax Justice Network Financial Secrecy Index. They said so almost as soon as the report came out but now they’ve pretty much lost it, so deep is their anger at being given credit for what they do so well, which is to sell secrecy.

Rather weirdly, they’ve made me the villain of the whole piece. I say weirdly for good reason: as I’ve made clear, whilst I was heavily engaged in producing the first Index this time I only acted as an adviser, but heaven forbid things like facts should get in Cayman’s way when the true nature of what they do has been rumbled. The whole Cayman report is worth a read for its amusement value, but let me just highlight some of it here:

The chair of Cayman Finance and the organisation’s representative in London have both dismissed the findings of the Financial Secrecy Index published in the UK capital on Tuesday by the Tax Justice Network and Christian Aid. Richard Coles and Jack Irvine both claim that the authors of the report are advocates of global taxation, once referred to by the former Cayman Finance Chair as the ‘Tax Taliban’ who are not taken seriously. Within some 36 hours of its publication the report and its finding that Cayman was the second most secret financial jurisdiction in the world and played a key part in the global financial crises was posted on websites of more than 70 different international news houses and media organisaitons.

That last part is true. But as they say:

“It beggars belief that the Tax Justice Network still produces these canards about The Cayman Islands,” Richard Coles said in the wake of the report’s publication. “We have never been more transparent and we have never had so many tax treaties with other jurisdictions. What is deeply worrying is that some sections of the UK media take Messrs Murphy and Christensen seriously. These men are high taxation zealots and like the OECD they see nothing immoral in governments taking half or more of a man’s salary,” Coles said, adding that they would not be happy until there was a universal global tax rate.

Which is an intriguing association on Coles’ part: much of the criticism in the report is aimed at the OECD. Maybe he hasn’t read it?

But the fun then really starts:

Jack Irvine, the London based advisor to Cayman Finance’s who liaises on their behalf with HM Government, the media and Cayman’s London office … described the secrecy index report as the “same tired old song” that he said the Tax Justice Network have been turning out for years. “

There are a few facts that your readers should appreciate about this rather grand sounding organization,” Irvine told CNS. “In fact it is a tiny little outfit run out of Richard’s Murphy’s modest house in the English countryside.

Well, it’s true Jack I live in what some would call a modest house in the English countryside – and I’m very happy to do so. It suits me and my family just fine. Modest it may be in Jack’s view, but I have no desire to move. But two questions arise. First, why has he got his facts so wrong, and secondly, so what?

For his information, I haven’t been an officer of the Tax Justice Network for several years, nor even paid by it for some time. I certainly advise it and work closely with John Christensen, its director, but the international network, spread over many countries now is run by John, not me. So it looks like Jack Irvine has failed to get his due diligence right.

But even if true – the question is, so what? Does it matter that I mainly work from home? Does that make a  difference to the result? I mean, surely better I say I work from home where I actually am than claim I’m based in a slot in a filing cabinet in a lawyer’s office on Cayman just to avoid or evade tax and to hide what I do from view, wouldn’t you say Jack, just to bring things down to earth somewhere new Georgetown?

Well apparently it does matter, for  as Irvine continues, this means:

Nobody in the financial world takes Mr Murphy seriously. He is an advocate of punitive taxation and he would like all countries to have a common tax system. This is not a man who appreciates individuality when it comes to governments.”

That’s pretty odd. The financial secrecy index isn’t about tax rates. They just don’t feature Jack. The clue is in the title. Nor have I advocated punitive tax. And what a common tax system is baffles me: by definition even within the EU such things don’t exist. I wonder what he means?

Irvine hasn’t finished yet though:

The TJN is actually an alliance of a number of individuals and non-aligned coalition of researchers and activists with a common interest in what they believe are the harmful impacts of tax avoidance, tax competition and tax havens. Murphy is just one of the individuals who blogs regularly on the subject.

He’s got something right. I blog regularly. I accept that!

By this point even Cayman News Service was getting a little weary of Irvine’s rant. Even they noted:

The secrecy index which was published on Tuesday which ranked Cayman as the world’s second most secret jurisdiction was written and researched by seven people including John Christensen who is the director of the Tax Justice Network International Secretariat.

But Irvine had not finished:

Irvine said that Murphy has the support of what he described as “politically motivated charities” such as Christian Aid and Oxfam, which others would describe as one of the largest and most respected charitable organizations in the world. But he said it was Murphy that was forever “claiming that tax neutral administrations such as Cayman, BVI or Jersey are responsible for the deaths of children in the developing world, in particular Africa.”

He said there will always be sections of the British media who would “dance to Mr Murphy’s tune” and went on to say that it was “no surprise that the left wing Guardian is always willing to repeat Mr Murphy’s tirades without question or attempting any balance.”

My guess is that this is said to support Irvine’s case that I’m not taken seriously? It’s  a compelling case you make Jack based on this evidence. The trouble for him is that Cayman News added:

However, Irvine didn’t comment on the stories run by the Daily Telegraph, known as a more politically right wing daily newspaper, or those in other more neutral news houses such as Reuters and Bloomberg.

Why not Jack? Being a little selective in your take, maybe? No, not at all, he claimed:

Irvine said: “The Cayman Islands should be comforted by the fact that the UK government takes no notice whatsoever of either the Tax Justice Network nor The Guardian’s regurgitation of their fantasies and indeed the current UK regime and the House of Commons All Party Parliamentary Group have repeatedly signalled their support of Cayman and its robust financial and legal systems.”

Ah, that’s all right then. The current ‘regime’ in the UK is on Cayman’s side. So life’s all right then.

Why the tirade then Jack? Could it be you’ve got something to hide? And maybe, just maybe you don’t like a few honest people pointing it out?

Either way, thanks for taking it seriously. I appreciate that. Oh, and send a signed picture. I’ll put it on the wall of the room where I work. I can’t call it an office by the way – I share it with my sons’ model railway.

Which I guess proves Jack’s right though. I really am a lightweight cheapskate who can’t even get a slot in a filing cabinet all of my own.

 Posted by Richard Murphy at 5:54 am

London is the consolidated #1 secrecy jurisdiction in the world

 Cayman, City of London, Financial Secrecy Index, Guernsey, HMRC, Isle of Man, Jersey, Secrecy jurisdictions, Tax Havens, Tax Justice Network, Uncategorized  11 Responses »
Oct 042011
 

London features heavily in the Tax Justice Network’s new Financial Secrecy Index. Whilst the UK comes in at number 13 places for which the UK is wholly responsible also feature prominently on the Index. The overall scores for London and its satellite offices are:

RANK Secrecy Jurisdiction FSI – Value Secrecy Score Global Scale Weight
2 Cayman Islands 1646.7 77 0.046
7 Jersey 750.1 78 0.004
11 British Virgin Islands 617.9 81 0.002
12 Bermuda 539.9 85 0.001
13 United Kingdom 516.5 45 0.200
21 Guernsey 402.3 65 0.003
36 Isle of Man 230.4 65 0.001
38 Turks & Caicos Islands 218.9 90 0.000
43 Gibraltar 174.6 78 0.000
65 Anguilla 36.0 79 0.000

Pu that lot together – and that’s the fair treatment of them since ministers in the UK and these places always say their value is as conduits to the City – and London is number 1 secrecy jurisdiction in the world.

But the Treasury denies it of course. As the Guardian notes:

The UK, with the City of London and a network of overseas tax haven territories and dependencies including Jersey, Bermuda, the British Virgin Islands and the Caymans, also features prominently in the index’s dirty dozen of top offenders.

The UK Treasury said it did not recognise the picture presented in the index, adding that the UK government had demonstrated a clear commitment to tackling all forms of tax avoidance and evasion.

And as it added:

A spokesman for the Treasury defended the UK record on tax havens, saying: “At the budget this year we published Tackling Tax Avoidance, on tackling avoidance at the root. The Global Forum on Tax Transparency set up by the G20 in 2009 now has over 100 participating jurisdictions and over 600 bilateral tax information exchange agreements have been signed. The world has changed over the past three years and continues to do so, and the government is committed to keep up momentum.”

Respectfully, that’s nonsense. The document in question is a weak re-hash of what was already being done: the one thing it actually made clear was that nothing had changed at all. And much of secrecy jurisdiction activity is evasion anyway.

As for those bilateral tax information exchange agreements: as the Guardian TJN notes saying:

The problem with many of the new tax information agreements, according to TJN, is that they have taken the weakest form possible, in effect requiring tax authorities to know what they are looking for before they ask for information, rather than requiring full disclosure.

Precisely so. And that’s a choice on the part of the UK and others: a smokescreen to hide what’s really happening – as the Treasury and tax authorities  well know.

Indeed, as Dave Hartnett once said to me, he thought he had to sign the deal he did with Liechtenstein because the a standard OECD style tax information exchange agreement would never have produced any data at all, and on this occasion he was right – which is exactly why the Treasury know that what they’re saying is wrong and deliberately wrong.

So for those looking to tackle tax havens in the UK the problem is near at hand – and focused in London EC3.

 Posted by Richard Murphy at 8:55 am

You couldn’t make it up: Cayman proposes a new law saying ‘let’s pretend our companies aren’t here’

 Cayman, Secrecy jurisdictions, Tax Havens  8 Responses »
Sep 122011
 

The Cayman Islands is proposing a new law called:

A LAW TO PROVIDE FOR THE ESTABLISHMENT AND OPERATION OF SPECIAL ECONOMIC ZONES IN RESPECT OF CERTAIN TYPES OF BUSINESSES; AND TO PROVIDE FOR INCIDENTAL AND CONNECTED PURPOSES

They know how to grab attention. don’t they?

Except, perhaps that’s the last thing they want to do. As they say:

This Bill seeks to provide for the establishment and operation of special economic zones in respect of certain types of businesses.

And as they also say:

Clause 6 empowers the Authority to facilitate the procurement, management, reclamation and disposal of land and other property for the purpose of a special economic zone; the carrying out of development works and other building operations in, on or in respect of a special economic zone; and the preservation, maintenance, regulation, management and improvement of a special economic zone and to provide additional facilities to it.

So we know that the zones are to be in Cayman.

Despite which they say:

Clause 7 provides for the duty of confidentiality on the part of members of the Authority.

So telling secrets will as usual be important in Cayman. Which may be vital because:

Clause 11 provides for a special economic zone to be deemed to be outside of the Islands for the purposes of Parts VII and VIIIA and section 201(2)(f) of the Companies Law which deals with exempted companies, sections 4(1) and 9(1)(f) of the Exempted Limited Partnership Law (which respectively deal with the constitution and registration of exempted limited partnerships) and clause 18 of the legislation (which prohibits the carrying on of trade in the Islands by a special economic zone enterprise and provides for the carrying on of business by a special economic zone enterprise mainly outside of the Islands).

Not let me just unpack that.

What this law does is provide that Cayman will create new areas in the somewhat limited land space of the island where under terms of some secrecy companies will operate but where, despite that fact, they will be deemed to be ‘somewhere else’.

This is classic tax haven stuff. I explained it all some time ago, here. But it’s astonishing to see Cayman being quite so blatant about it still.

And they tell us tax havens have changed.

Now pull the other one.

 Posted by Richard Murphy at 3:25 pm

Cameron and Osborne did the Swiss tax deal to support tax evasion – there’s no other explanation

 Cayman, Guernsey, Isle of Man, Jersey, Switzerland, Tax evasion, Uncategorized  107 Responses »
Aug 252011
 

The UK – Swiss tax deal does not meet with my approval, as some will have noticed. The deal is outlined here. My objections are littered through the blogs preceding this one.

But let’s stand back for a moment and consider why the UK have done this deal – uniquely (because it seems unlikely that the supposedly similar German one will get parliamentary approval and so will not happen).

It’s important to say this deal was not needed. The revised European Union Savings Tax Directive is on the table. Twenty five EU states support it and it has looked very likely recently that compromise with the other two was possible and that Switzerland could have been pulled on  board. So deal that would have ensured there was automatic information exchange on all interest income and gains arising throughout Europe, Switzerland, Liechtenstein and the UK’s tax havens was on its way, covering not only individuals but companies and trusts as well and with names and addresses being supplied.

That deal would have ensured we’d have got all the information we needed to demand all the tax due by those who have been criminally evading their tax bills by hiding funds in Swiss banks that have been deliberately and knowingly helping them to do so.

And I think the UK- Swiss tax deal has been deliberately engineered to scupper that EU wide deal because it would have applied to Jersey, Guernsey, the Isle of Man, Cayman and all other British tax havens that comprise the branch offices of the City of London tax haven. And it would also have extended information exchange to companies and trusts – which would have shattered the tax evasion industries in these British tax havens.

So what have Cameron and Osborne done? They’ve as far as I can see absolutely deliberately signed the deal with Switzerland in an effort to destroy that EU deal. Even the FT says this morning:

We’re not experts in this field but we also wonder whether these bilateral deals mark a setback for international efforts, led by the OECD and EU, to force the Swiss into further transparency.

“The UK’s willingness to legitimise secret accounts on a ‘no-names’ basis is controversial because it treats users of secretive havens more leniently than other taxpayers,” notes the FT.

So how should we really interpret this deal?

What’s very obvious it is deliberate move by London. And it’s also very obviously deliberately designed to help tax evaders by making sure that the Crown Dependencies and others can remain in that sordid business.

So we have to conclude that this is not a move against tax evaders – all of whom will be laughing themselves silly about how easy it is to get around this Swiss deal.

In that case let’s not put too fine a point on this: this is the Treasury and our political leaders going out of their way to support criminality by making sure that a measure – the European Union Savings Tax Directive - that would blow tax evasion in British dependencies apart cannot now be implemented. And all, no doubt, at the behest of the City of London.

There’s no other reasonable interpretation for what they have done.

 Posted by Richard Murphy at 9:28 am

With the Tories at the helm the corporate ship will remain docked off Cayman

 Cayman, Corporation Tax, Economics, Tax avoidance  3 Responses »
Aug 082011
 

There was a stunningly good article in the Guardian on Saturday that I missed (well, it was my mother-in-law’s 80th, and these things take some organising). It was by Patrick Collinson and concluded:

When governments around the world are teetering into bankruptcy, and households are more indebted than ever, you don’t have to be a Marxist to acknowledge that the share of the national pie taken by profits is unsustainably high.

The City knows it. I was at a Mayfair asset management group this week, where fund managers were chewing over the risks of a steep rise in corporate tax rates. But they also expect corporates to indulge in as much profit-hiding as they possibly can. Expect more fake domiciling in Ireland and elsewhere.

We don’t need personal tax rises, we need to raise corporate tax and tackle the dodgers. But with the likes of the Tea Party and the Tories at the helm, the corporate ship will remain docked permanently off the Cayman Islands.

No wonder people are angry. The corporate looting of the UK goes on, unabated with official sanction.

Hat tip: False Economy

 Posted by Richard Murphy at 5:59 pm

The Office for Tax Simplification decided to keep the UK as a tax haven

 Cayman, City of London, Corporation Tax, Economics, PWC, Secrecy jurisdictions, Tax avoidance, Tax Havens  6 Responses »
Mar 072011
 

I am posting this here with the permission of the Progressive Tax Blog, which I strongly recommend.

The matte referred to is vital. As I an my co-autors explain in our book Tax Havens: How Globalization Really Works, this relief was at the heart of maiming the City of London a tax haven. And it still is. That’s why this issue is so important. And the OTS decided to ignore it. That, I suggest,. Was a political act. Also one in breach of money laundering obligations as the UK has no idea to whom these funds are paid. Why is that. In that context, please read this:

Anybody who has attempted to read the 191 report by the Office of Tax Simplification on simplifying tax reliefsshould be congratulated; it’s not exactly the most interesting document, and mainly deals with obscure tax reliefs that most people will not have heard of.

There is more interesting discussion over whether the income tax and national insurance regimes should be combined into a single tax (although no real conclusion), and the report recommends abolishing the £8,500 threshold for more generous treatment of employee benefits for low paid workers. However, to give you a taste for some of the other content, of the 191 pages, two deal with the duty treatment of angostura bitters and a specific black beer drunk only in Yorkshire. This is hardly the sort of complexity in the tax system that people complain of.

Nevertheless, there is one relief mentioned deep on page 179 related to relief from withholding tax for interest paid on so-called ‚ÄòEurobonds’ over which there is remarkably little discussion in arriving at the report’s conclusion:

Eurobond interest

P.79 This relief exempts interest paid on Eurobonds from deduction of tax so that the holder of the Eurobond receives interest gross rather than net of tax.

P.80 A quoted Eurobond is a security, including shares (in particular any permanent interest bearing share), listed on a recognised stock exchange, and carries a right to interest. Some of the major issuers are supranational organisations (such as the World Bank or the European Bank for Reconstruction and Development).

Is the policy rationale still valid, does the relief achieve it and what might be the impact of repeal?

P.81 The original policy rationale is to encourage the growth of the UK Eurobond market, as London is one of the centres of the worldwide Eurobond market.

P.82 If it were repealed, it could reduce investment in this area, and also reduce investment in the UK.

Taxpayer take up and awareness

P.83 This relief is targeted at any holder of Eurobonds.

P.84 In the year to November 2010, funds raised through Eurobonds issued on the main UK market totalled £393billion in over 3,300 issues.

Complexity, compliance costs and administrative burden

P.85 The relief is a simplification to the taxpayer as it removes the need to account for withholding tax.

Summary

P.86 The policy rationale remains valid and it is a simplification for the holders.

P.87 We recommend that this relief be retained.

The description of the relief from the OTS is brief and it is useful to put it in broader context.

In general, if a UK resident company borrows money from a non-resident company, it will obtain a tax deduction for the interest payable but under UK tax law is required to withhold UK income tax at 20% on interest paid to the non-UK company. The UK has entered into a number of tax treaties and is also obliged to follow the EU Interest and Royalties Directive which means that in many cases interest payable to an EU member state or another country which has a tax treaty with the UK (e.g. US) will in practice not be subject to UK withholding tax. However, interest paid to companies or individuals resident in tax havens will generally be subject to 20% withholding tax as no treaty will apply.

The relief referred to by the OTS is a specific exemption from withholding tax on interest if the debt on which the interest arises is a ‚Äòquoted Eurobond’. This may sound like a complex financial instrument but in practice this can include any loan agreement which is listed on a ‚Äòrecognised stock exchange’, even if the lender is a related party. The term ‚Äòrecognised stock exchange’ can appear to give the exemption legitimacy but in fact this includes the Channel Islands and Cayman Islands, among other exchanges.

Take the following example:

Eurobond illustrationIn this case, the UK subsidiary of a multinational group borrows significant debt from a group company resident in the Cayman Islands. The UK company decides to list the debt on the Cayman Islands stock exchange despite the fact that the lender is a group company and always will be (there is no prospect of a third party buying the debt). As a result of the listing, the UK company is still able to obtain a tax deduction for interest (reducing its UK taxable profits) but is not required to withhold any tax on interest paid. Meanwhile the Cayman Islands lender pays no tax whatsoever. The result is a significant UK tax saving all for the relatively insignificant listing fees and related legal costs associated with listing on the Cayman Islands stock exchange.

The OTS claims that the policy rationale is to promote investment in the UK, and that the relief is a “simplification to the taxpayer as it removes the need to account for withholding tax”. This is either naive or disingenuous. The relief is not a “simplification” but a complete exemption from UK tax for interest paid on these instruments, including to tax havens. The OTS only refers to the Eurobonds issued on the main UK market but neglects to mention that the exemption also applies for listings in tax havens and secrecy jurisdictions.

However, even in these secrecy jurisdictions the listing is public (just ‚Äòpublic’ enough); anybody can visit the websites of the Channel Islands or Cayman Islands stock exchanges and view the listings for themselves. While we cannot definitively say that all of the listings of debt issued by UK companies on these exchanges are purely for UK tax avoidance purposes, it is difficult to avoid this presumption in many cases.

We thought it would be interesting to highlight some of the companies that have debt listed on these exchanges. Unfortunately the sham of these sorts of instruments being publicly traded securities means that information on holders is not made public – although some borrowers do disclose in their own statutory accounts.

Issuer Exchange Holder Debt amount Interest rate UK WHT saved p.a. (estimate)
British Telecommunications plc* Channel Islands Group company – unknown £3,611m LIBOR plus 10 bps (e.g. 2%) £14m
Everything Everywhere Ltd
(formerly T Mobile (UK) Ltd)		 Channel Islands Unknown £1,250m Floating (assume 5%) £12m
Ineos Holdings Ltd* Channel Islands Ineos US Finance LLC (group company)
(Note: LLCs are typically non-taxable entities under US tax law)		 $1,785m Floating (assume 5%) $18m
Taveta Investments (No. 2) Ltd*
(parent of Arcadia / BHS)		 Channel Islands Group company – unknown £180m 8% £3m
BlackRock Finco UK Ltd Cayman Islands Group company – unknown $3,450m 7.43% to 8.90% $55m
Hewlett-Packard Holdings Ltd Cayman Islands Hewlett-Packard Marigalante Ltd
(Cayman Islands)		 £3,721m 6.5% to 8.3% £50m
Transocean Drilling U.K. Limited Cayman Islands GlobalSanteFe Services (BVI) Inc
(British Virgin Islands)		 $1,075m 5.54% $12m
Transocean Drilling U.K. Limited Cayman Islands Transocean Inc
(Cayman Islands)		 $750m LIBOR plus 500 bps (e.g. 6%) $9m

These are just a few examples from only two offshore exchanges but is enough to illustrate the point. We would be interested to hear from the above companies to understand what the commercial reason for listing on these exchanges is if it is not to avoid UK withholding tax.

Unfortunately the fact that the OTS has glossed over the Eurobond exemption in its report means it is unlikely to be subject to any further scrutiny (at least until this blog post). One has to question whether the fact that the committee is comprised at least partially by ‚ÄòBig 4‚Ä? accounting professionals, and led by a former PwC tax partner (John Whiting) has anything to do with this. For good measure we have highlighted the PwC audit clients with a “*” in the table above.

Why has the Office of Tax Simplification given its approval to a tax relief which encourages multinationals to locate finance companies in tax havens and pay no UK withholding tax?

I would be willing of course to pass on comments from the companies in question.

I stress: these actions are legal, of course. The question is about avoidance. But that is of itself important. And given the interest in tax haven issues and tax avoidance in the UK, justified, I think.

 Posted by Richard Murphy at 4:47 pm

When will Cayman learn?

 Cayman, Secrecy jurisdictions, Tax Havens  1 Response »
Feb 212011
 

I note the new Chair of Cayman Finance seems determined to continue in the tradition of his predecessor.

Interim Chairman Roy McTaggart , who recently succeeded Anthony Travers OBE, has sent a letter to Ronnie Campbell, MP because he referred to the Cayman Islands as a tax haven during a debate in the House of Commons last week. McTaggart said, according to Cayman News Service, that:

Cayman is a fully transparent jurisdiction and not a place where individuals or corporations are able to “hide money”.

And of course the ritual denial that Cayman is a tax haven was delivered.

I’d have hoped that after the excesses of the Travers years that a new Chair of Cayman Finance might have toned down the rhetoric, and might even have realised the folly of tilting against windmills. But apparently not. If McTaggart does not realise that there’s as much chance of his argument that Cayman is not a tax haven being accepted in the House of Commons or in the UK generally as there is of a claim from the Libyan government this morning that it is an open, liberal democracy being accepted at face value then he very clearly does not understand first of all what a tax haven is, second what the generally accepted use of the term is and thirdly what Cayman is.

Keep issuing such absurd letters of you want Cayman, but all you prove is how far removed from reality you are, and while you do that people will rightly realise that all you have to sell is a myth – the myth that tax havens firstly do something other than let people and companies avoid their obligations to society and secondly that doing so is useful, both of which are very obviously untrue.

When will you learn?

 Posted by Richard Murphy at 9:42 am
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