The UK government when seeking an assessment of the problems tax havens cause asked the Oxford Centre for Business Taxation to do the work. They got a biased, inaccurate and ill-informed report for their money, with the authors failing to disclose their considerable conflicts of interest — not least that they are funded by some of the companies who are amongst the heaviest users of such places.
The US have done a similar job. It was published in July. Entitled ‘Tax Havens: International Tax Avoidance and Evasion’ by Jane G. Gravelle, Senior Specialist in Economic Policy, you can read a review of this by the Tax Justice Network here.
Amazing what a little objectivity adds to the findings in a report. Oxford dismissed the issue. Not so the US.
Now why was that I wonder? Nothing to do with those conflicts of interest, surely?
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I think you are ignoring that tax haven known as the UK!
On pages 20-21 of the STEP magazine http://content.yudu.com/Library/A1c2v0/STEPJournalJulAug200/resources/index.htm?referrerUrl=http%3A%2F%2Fwww.yudu.com%2Fitem%2Fdetails%2F72093%2FSTEP-Journal-Jul-Aug-2009-Vol17-Iss7 Mr Sharman (a respected academic who gives you special thanks in the forewards of his book “Havens in a Storm” highlights)the UK as a secrecy jurisdiction. I am sure when his paper is published next year you will read that establishing a “shell” UK company with bearer shares without any need to identify the beneficial owner in the UK is easy.
I wonder if you agree that the OECD and the IMF should crack down on this non-compliant jurisdiction situated adjacent to the Irish Sea know as the UK.
Alarmingly this country was included on the G20 whitelist!
John
Of course I know Jason. I helped him with that research. And he’s right. I’ve said it time and again here, on the BBC, and in publications.
The UK is a tax haven. A major tax haven.
Why do you think I have campaigned so hard to abolish the domicile rule – a tax haven rule?
I don’t mind being criticised for what I do wrong – but give me credit – I am one of the people saying this loudest and longest
But so what? Just because one person who murders gets away with it, it doesn’t excuse all others.
And most secrecy jurisdictions are still worse than the UK – by some way
Richard
@Richard Murphy
No criticism intended of course, but secrecy jurisdictions are also at risk of being used for crime other than tax crime.
Of course all murderers should be caught and punished, and subjected to a fair trial.
The risk of course with secrecy jurisdictions is that they can be used for crimes other than tax crimes.
I think that you have hit the nail on the head by mentioning murder. By the UK allowing anonymous companies to be established so easily the state is effectively letting people get away with murder.
Concealing identity in such an effective way using bearer shares with a UK Company puts it at the risk of having its financial system being used for serious organised [non-tax] crime.
I appreciate what you say about most secrecy jurisdictions being still worse than the UK, but that isn’t the conclusion of the article in the STEP magazine, the UK was the worst – by some way.
One might be forgiven for being under the misapprehension that this was all about politics.
John
John
I agree the UK law should be reformed
I have testified to that effect in parliament
But to say STEP have got this right is just wrong. Yes it’s politics – and they are in the politics of promoting aggressive avoidance offshore – and oddly enough most people in this country think offshore tax abuse is beyond the political pale
So of course its politics – but that of right and wrong – and I’m happy to say I’m right, STEP are wrong
Richard
I wasn’t saying that STEP had got it right, I was saying that Jason had.
It was Jason that wrote the article, STEP were just the publisher.
In order to move to transparency and automatic information exchange the information has to be collected in the first place.
Its quite clear to me that some of the OECD countries aren’t playing by the rules.
So how will automatic exchange work? If say Singapore and the UK fail to implement effective collection and reporting regimes won’t this mean that they will gain a competitive advantage.
What sanctions will the G20 apply to Singapore and the UK?
John
I agree Singapore is a problem
But the UK will be forced to comply with information exchange requiiorements by the EU in my opinion as a result of the revised European Union Savings Tax Directive – so I don’t anticipate a problem
Richard
Richard
I think the UK practitioners may disagree; the changes are very much a problem to implement.
The lax regime in the UK will be very difficult to reform, it will take years.
Beneficial ownership registers or the like for UK companies will affect the ability of the UK to compete in a number of lucrative [for the UK economy] areas such as capital raising by listing.
Then there is the case that the Insurers are going to make over EUSTD II
And what about where the investing entity is in another white listed jurisdiction with great regulation over its corporate entities (no not the UK, I am thinking of Delaware) although Delaware isn’t a jurisdiction is it, unless you ask an American lawyer.
So much for the world being fair, before you know it people will be using US LLC’s for ‘sheltering wealth.’
Its a good job Senator Levin is on the case.
People might just go back to using that other zero tax entity the UK LLP – I think they are rather good Richard, don’t you?
Anyway what is going to be done about Singapore? Sounds like unfair tax competition to me – Can’t we get them to join the EU?
john
John
So now we get to the nub of it: because we can’t create a perfect world (about which I agree with you) we should accept an entirely unreasonable one.
Is that your case?
As a matter of fact I know all rules will be broken, no system is perfect and some spivvy firms of lawyers and accountants and insurance companies (Dave Hartnett’s phrase, not mine) will create abusive schemes that most would not go near
But that does not stop a trajectory for change, which is what we have. So what if we never get perfection? Have we ever? Isn’t improvement a valid goal when it increases social justice, by which I mean relief of poverty and greater equality of outcome in society?
Or are those objectives what you object to?
Richard
Well I agree we can’t create a perfect world, but there is only one world in which we can live, and its that which one must try to change, or accept.
I agree about Spivvys, but aren’t there any Spivvy bankers left? And with the DoTAS rules its harder and harder to devise and promote such schemes, and they have a much shorter shelf life – The HMRC have done a remarkably good job there.
I agree that improvement is a valid goal, but its ironic that the country hosting the G20 summit appears to be so lax in these areas.
There is a trajectory for change, and we can all aim for perfection; and greater social justice is a laudible aim however achieved.
But going back to the original subject of your post, do you consider Jason Sharman’s report to be objective?
My aim is to add to the debate.
Jason made some valid comments
If I can be candid I also think Jason is naive about the use made of his comments – but that’s his choice
Yes, the UK has problems
But many other locations are a lot worse – as data I’ll publish later this year will show
That’s an objective response
Richard
Well Jason wrote an article, and the findings were quite clear – Res ipsa loquitur
I have also seen an early copy of the report, although I haven’t read all the report .
There has been very little work that I’ve seen on comparing jurisdictional compliance.
If you speak of course to any provider involved in multi-jurisdictional transactions they will have an idea about the relative standards imposed, but then little is shared about this, and even less empirical analysis.
I don’t know many jurisdictions that will allow companies with bearer warrants/shares to be issued without identifying the owner – it seems to me that the UK are paying lip service to 3MLD – I would also guess that some other european countries would be doing the same, just look at the record on implementation generally of directives, you will see the usual suspects.
I would be interested in seeing your data.
John
Data on this and many other issues covering 60 jurisdictions will be published soon
Richard