From this morning’s Independent:
Murphy believes that the number of tax havens could dwindle from 40 to about 10 over the next decade if Automatic Information Exchange were to be implemented.
“This should be pretty popular,” he says. “We are talking about 1 per cent of the population who are involved in tax havens. But the tax loss as a result is extraordinary.”
On the other side of the fence, the big accountancy firms, which often advise big business, and the mainstream accountancy profession, are not in favour of AIE.
While both the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales (ICAEW) say they back moves to greater openness and transparency, neither wants AIE. “There is a serious issue about privacy and confidentiality,” says Ian Young, technical manager of the ICAEW.
Why oh why is my own professional body always on the wrong side when it comes to tax compliance?
Is it that hard to do the right thing and say ‘yes please – let’s collect the tax that is due and cut the tax evaders out of the system?’ Apparently so – because the ICEAW’s excuses do, as ever, actually say the exact opposite.
Remember the European Union Savings Tax Directive, which is based on automatic information exchange, was promoted for one reason and one reason only: to stop tax evasion. And still the ICAEW cannot support the process.
Shame on them!
Richard Murphy Accounting, Tax evasion
Reuters reports:
The U.S. Justice Department said on Tuesday it was pressing ahead with its five-month-old lawsuit against UBS AG to force the Swiss bank to identify thousands of U.S. clients with secret UBS accounts.
Despite recent media speculation about a possible settlement of the case, the Justice Department said in a brief filed with a Florida court that it was seeking to enforce tax compliance with the full weight of U.S. law.
Good news.
Justice may be done.
Richard Murphy Switzerland, Tax evasion
UBS to pay 3-5 bln Sfr to close US tax probe-paper | Deals | Regulatory News | Reuters .
Switzerland’s UBS is to pay 3 to 5 billion Swiss francs ($2.77 billion to $4.62 billion) in the next two weeks to settle a U.S. tax probe into the bank, Swiss newspaper Sonntag reported on Sunday.
The U.S. government is suing UBS to get the names of 52,000 Americans who allegedly hid nearly $15 billion in assets from the taxman.
Sonntag, which said the figure of 3 to 5 billion francs had been confirmed by three independent sources, reported a deal could be signed between July 1 and July 13.
Earlier this week, the U.S. Justice Department said it was still willing to consider a settlement, but denied it was planning to drop the case and said it would file a brief seeking an enforcement of the summons on June 30.
Which is good for revenue raising and putting a price on systemic risk for those engaging in this market but bad for letting individuals off the hook.
Richard Murphy Switzerland, Tax evasion, USA
UBS Client Rubinstein Pleads Guilty Over Tax Return (Update2) - Bloomberg.com.
A Florida millionaire pleaded guilty to filing a false tax return that failed to disclose secret accounts he held at UBS AG, the largest Swiss bank by assets.
Steven Michael Rubinstein, 55, of Boca Raton, was the first U.S. taxpayer charged after UBS gave more than 250 customer names to the Internal Revenue Service .
UBS handed over account data on Rubinstein, a chartered accountant who has worked since 1994 at an international yacht company. He is cooperating with a U.S. probe of scores of U.S. taxpayers. He pleaded guilty to filing a false return in 2004 and admitted failing to disclose UBS accounts from 2001 to 2007.
I added the emphasis without surprise that it is a member of my profession who has been found guilty of this.
Now, will he expelled from his professionla institute pronto? Don’t count on it.
Richard Murphy Tax evasion
Earlier this week a team from Oxford University challenged the work I and others have done in seeking to estimate the tax loss to developing countries as a result of transfer mis-pricing and related issues. One issue in particular stood out:
A key shortcoming of many existing studies based on mispricing is that they only take into account overpriced imports into developing countries and underpriced exports of these countries. But the mispricing approach also identifies underpriced imports into developing countries and overpriced exports. Both shift income into developing countries. Estimates of tax revenue calculations have to take into account income shifting in both directions. If only one direction is taken into account, the results are highly misleading. In this case, tax revenue losses due to mispricing are overestimated drastically.
I have said they have got their analysis wrong, but had the chance to explore this yesterday when i was at a conference with a major figure in finance from a poor developing country (Chatham House rules prevent me from saying which). I asked if he had witnessed under pricing into his country and over pricing out and he confirmed he had. But then said that the over pricing out was to claim export subsidies in excess of any additional tax paid and the import under-pricing was to avoid import duties in excess of any additional tax paid. In other words, in both cases there was tax cost and not benefit to the developing country – quite contrary to the assumption made by the Oxford team.
I am afraid their wholly unsupported assumptions used to criticise our work are not just unsupported, they are wrong. All mis-pricing into and out of developing countries is designed to harm their tax receipts.
Richard Murphy Development, Economics, Tax Havens, Tax avoidance, Tax evasion
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