No Post-Election Budget For UK

Posted on June 30th, by Global Tax Weekly in Budgets. No Comments

Perhaps one ray of light exists for taxpayers attempting to make sense of the United Kingdom’s chaotic political backdrop – there won’t after all be yet another “emergency” summer budget. Taxpayers have no doubt had quite enough of summer budgets, autumns statements, and spring announcements, and therefore the decision by Chancellor of the Exchequer Philip Hammond to forgo a post-election fiscal statement in favor of waiting for the scheduled Budget towards the end of this year could be interpreted as a sensible move, allowing time for the dust storm to settle.

On the other hand, it could be argued that if there was ever a need for an emergency budget, it is now. For if attempting to leave the European Union with a weak Government wrought with internal divisions, and with a leader who in political terms looks increasingly like a dead woman … Read More »

UK Snap Election Creates Complications For Finance Bill

Posted on April 27th, by Global Tax Weekly in Budgets. No Comments

The United Kingdom’s Prime Minister, Theresa May, caught many off guard by calling a snap general election last week. Added to the weight of uncertainty already bearing down on the UK as a result of Brexit, the timing of this election is hardly ideal, and the announcement demonstrated just how flexible politicians can be with their views, with May having repeatedly rejected the idea of calling an early election to consolidate her and the Conservative Party’s position in power on numerous occasions recently.

But while this development could strengthen May’s hand in the upcoming Brexit negotiations – provided, of course, she gets the comfortable victory pollsters are predicting – it is not, however, going to be very helpful for taxpayers. The 2017 Budget was announced only six weeks ago, and the Government has already performed a u-turn on the most significant proposal, the … Read More »

Germany Sees Record Budget Surplus

Posted on March 8th, by Global Tax Weekly in Budgets. No Comments

The German Government deserves much credit for the prudent management of its budget, and of its economic affairs in general, which has resulted in a record post-reunification budget surplus of EUR24bn (USD25.3bn). But I could also mark the country down for its extreme reluctance to share the surplus in the form of tax cuts. And there’s plenty of scope for those. According to Paying Taxes, an average-size company in Germany hands over just under 50 percent of its profits in income, labor, and other taxes. What’s more, individuals face a top rate of 45 percent, plus the solidarity surcharge and social contributions. The counter argument is that some of the best public services in the world must be paid for somehow, and that somehow is inevitably through taxation – a bargain accepted in northern Europe much more than it is anywhere else … Read More »

United Kingdom To Scrap Autumn Statement

Posted on December 1st, by Global Tax Weekly in Budgets. No Comments

Judging by the United Kingdom Government’s Autumn Statement, which has come to serve as a secondary Budget, you would be forgiven for thinking that there must have been a general election at some point in the recent past that everyone missed. Had there been, I’m fairly sure we would have been looking at a very different Autumn Statement than the one just delivered by Chancellor of the Exchequer Philip Hammond, if it had it been announced by former Chancellor George Osborne.

The approach to fiscal policy under the Tory Government of Cameron and Osborne (who both ran the Tory-led coalition which preceded it) and the Tory Government of May and Hammond is quite stark. Almost like two different political parties, in fact. Osborne was all about righting Labour’s wrongs with his focus on deficit reduction, spending cuts, and showy corporate tax … Read More »

IMF Impressed With Canada’s Pro-Growth Policies

Posted on October 19th, by Global Tax Weekly in Budgets. No Comments

After little more than a year in power, it’s probably too early to judge Justin Trudeau and his Liberal Government’s handling of the Canadian economy. But looking from afar, it seems to be a case of so far so good. The IMF at least seems impressed. Welcoming the new Government’s pro-growth policies, it predicted in June this year that measures contained in the last Budget would boost GDP by 0.5 percent in each of the next two fiscal years.

However, it is those “pro-growth policies” – essentially a euphemism for higher public spending – have seen Canada go from a budget surplus to a budget deficit either side of the last election. And worryingly, while spending has been rising, tax revenues have been fluctuating. This is despite the fact that, generally speaking, the new Government has been raising taxes – or … Read More »

Germany To Maintain Policy Of Fiscal Stability

Posted on September 12th, by Global Tax Weekly in Budgets. No Comments

To Germany now. And what’s this? A proposal by the Finance Minister to cut taxes? There must be an election coming up! And indeed there is. Elections to the Bundestag, the lower house of parliament, are due to take place no later than October 2017, and the seemingly unflappable, rock-like Angela Merkel is perhaps facing the first ratings crisis of her long stint in power.

Germany has a budget surplus and is therefore well-placed to afford tax cuts. But while the EUR15bn (USD16.9bn) figure mentioned by Finance Minister Schäuble looks impressive, tax cuts worth that would be equal to just 0.4 percent of Germany’s USD3.5 trillion gross domestic product – they’re small fry, in other words.

It’d be unwise to expect a reversal of Germany’s policy of fiscal responsibility and restraint. The migrant crisis has pushed up expenditure, and Germany remains ever-conscious of … Read More »

UK Chancellor Chops And Changes Over CGT

Posted on May 9th, by Global Tax Weekly in Budgets, Government, Individual Taxation, Investment. No Comments

UK Chancellor George Osborne received quite a bit of criticism for his decision to slash the rate of CGT in his most recent budget in March. This is because it was perceived by his opponents as a tax cut for the rich, as it will largely benefit those wealthy enough to invest and to have built up a company. That may be true, but surely the corollary to that is a high rate of capital gains tax will discourage people from investing and building up companies? And what’s the sense in that when economic times are already uncertain? The UK’s business leaders certainly seem to think this was the right move at any rate, with almost 80 percent telling a recent survey that investing in small companies in the UK would be more attractive as a result of the new … Read More »

Economic Liberalism And Social Democracy

Posted on July 13th, by Global Tax Weekly in Budgets, Corporation Tax, Individual Taxation. No Comments

Many politicians try to be all things to all people, but few manage to achieve it. George Osborne, the Chancellor of the United Kingdom Exchequer (aka, the Minister of Finance), is making a very good claim to be inducted into the “few that manage to achieve it” hall of fame in later life after announcing a quite remarkable “emergency” Budget last week. Indeed, it was a budget statement that could justifiably earn Osborne a new nickname – The Borrower – for he seems to have borrowed key policies from political opponents vanquished recently at the general election, particularly from the Labour Party, including a big increase in the minimum wage and the virtual extinction of non-dom tax status (although, now he’s taken them, he can’t really give them back, can he!) I can recall that when the UK first got … Read More »

Australia Chomping At The Bit

Posted on May 18th, by Global Tax Weekly in Budgets, Corporation Tax. No Comments

For a government so constrained by the fiscal straightjacket of a massive budget black hole inherited from the previous administration, the 2015/16 Australian Budget, announced by Treasurer Joe Hockey last week, was actually pretty generous, at least as far as small businesses are concerned. There was the promised tax cut for small companies, a so-called tax “discount” for unincorporated firms and a substantial increase in the tax deduction available to small businesses investing in new assets. All things you’d expect from a conservative Government. Ordinarily, this might be enough to earn Australia an encomium. But then Hockey goes and drops a bombshell. Anyone following international tax developments over the last few months may have noticed Australia chomping at the bit to unleash new tax weapons against BEPS. That horse has now well and truly left the stable with the unveiling … Read More »

Sprinkling Some Fairy Dust

Posted on March 23rd, by Global Tax Weekly in Banking, Budgets, Individual Taxation. No Comments

It’s difficult to know what to make of George Osborne’s sixth budget as the United Kingdom’s Chancellor of the Exchequer (that’s finance minister to the rest of the world). In the days leading up to the last budget of the current Parliament, Osborne promised that headline-grabbing gimmicks would be absent from his speech. But with the general election less than two months away, he would have been almost foolish not to have sprinkled the Budget with at least some fairy dust in the form of tax cuts for low- and middle-income workers and pensioners – winning over the substantial “gray vote” is one way to ensure electoral success. And sprinkle he did. The taxation of savings will be more or less abolished for ordinary savers, while another increase in the personal income tax allowance will ensure that most low-paid workers … Read More »


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