February2014


Iffy On The Liffey

Posted on February 26th, by Global Tax Weekly in Banking, Budgets. No Comments

So far as our news service is aware, no country is planning to reduce taxes this week, but at least in Ireland they are talking about doing so. The Deputy Prime Minister said as much; and a few days earlier the Finance Minister had said the same. They need to, heaven knows, and they have the right ideas, but I have to wonder where they are going to find the dosh. The budget deficit was 7.5 percent in 2013, and will be 4.8 percent in 2014, according to Government estimates, although external commentators think that is optimistic. Ireland’s debt was 25 percent of GDP in 2008, before it started on the suicidal “rescue” of its banks; now the debt stands at 125 percent of GDP, and may rise further. It’s hard to make out whether the Government is actually cutting … Read More »


The Magic Disappearing Tax

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

Italy in the spotlight again this week, with (unelected) Matteo Renzi in full flood of (unelected) government-forming. It’s difficult to see how he can change the Porcellum (pig-sty) for the better with the dogs’ dinner of a parliament that he has inherited from his unsuccessful predecessors, Mario Monti and Enrico Letta, which is most likely to tear itself apart if any real reforms seem imminent. But let’s wish him luck. As an example of Italy’s political incoherence we can point this week to the splendid piece of governmental incompetence displayed by the tax agency’s announcement of a 20 percent withholding tax on monies received from “abroad,” which it was forced to withdraw within 48 hours after the EU pointed out that it was illegal. That seems obvious: how can mandatory “withholding” be applied to cross-border EU transfers in a way … Read More »


Cowboys And Farmers

Posted on February 20th, by Global Tax Weekly in International Taxation, OECD. No Comments

“The farmers and the cowboys should be friends,” they sang in Oklahoma, even though they weren’t, and they often ended up killing each other. I guess the farmers won, in the end, and nowadays most of them have turned into companies, while the remaining cowboys are Federal marshals who make sure that the farmers hang onto their property. Nowadays we could sing: “The bosses and the governors should be friends,” although it doesn’t have quite the same resonance, and they face each other down across a court-room floor rather than a corral, and with lawyers instead of guns, but you get the picture. So this week the OECD, which for the avoidance of doubt needs to be understood as a tool of government and no friend of business, has brought out its latest fusillade of anti-business rhetoric in the shape … Read More »


Pigeon Post

Posted on February 16th, by Global Tax Weekly in Offshore. No Comments

I suppose it’s positive that Italy has removed San Marino from its black-list of low-tax countries. Not sure though whether it’s quite as positive that Italy removed its Prime Minister in the same week. They are comparing Matteo Renzi to Tony Blair, but it remains to be seen whether “New Labour” is a concept that will turn out to have wheels in Italy’s moribund polity. Anyway he’s Mayor of Florence, where he has done a good job of removing pigeons from the Piazza della Signoria. Let’s hope it’s a bit more permanent than Red Ken’s attack on “flying rats” in Trafalgar Square in London. If he does succeed in removing blood-sucking political vampires from Italy’s public spaces then Renzi will deserve a statue. Ci vediamo! Meanwhile, back to San Marino, which used to be a thriving Italian Monaco, but has … Read More »


Live Longer: Pay More

Posted on February 12th, by Global Tax Weekly in Individual Taxation, pensions. No Comments

Germany is in the grips of its economically destructive Grand Coalition agreement, which we have previously had cause to criticize, and which will prevent any business-friendly tax measures from being implemented for as long as it lasts, so we should at least give a subdued cheer for Finance Minister Schäuble’s determination to press ahead with an increase in the pension age, although the increase, from the current 65 (as almost everywhere) to 67 by (wait for it) 2029, is underwhelming. Life expectancy in Germany has risen by 10 years in the last 50 years to 80 years at present: that may not sound very much, but consider that post-retirement lifespan has therefore gone up from 5 years to 15, on average, while the retirement age has not changed. No wonder that the pension system is in a mess. By 2029, … Read More »


Let’s Hear It For Luxembourg

Posted on February 9th, by Global Tax Weekly in Banking, Corporation Tax, Individual Taxation, Offshore. No Comments

Why does Luxembourg want to deny that’s it’s a “tax haven”? “Profiting ‘fiscally’ from other countries.” Well, we know why: because in dying Europe it’s not politically correct to compete against other countries any more, so Luxembourg has to pretend that it doesn’t have an advantageous tax regime. But it does! And its efforts to cling on to that regime are the reason for giving it a prize. While pretending otherwise, Luxembourg is engaged in fighting a rearguard action against the extension of the Savings Tax Directive and AEI (automatic exchange of information). It refuses, quite correctly, to give in to the EU’s demands for a much more encompassing Directive until all of its competitor nations (Switzerland, Singapore, Hong Kong etc) sign up to similar rules, which hopefully will never be the case. Let’s be clear: people should pay their … Read More »


Goodbye Argentina

Posted on February 6th, by Global Tax Weekly in Currency, E-commerce, Individual Taxation, Trade. No Comments

“Fog On The River Plate: Argentina Cut Off!” That’s how it must seem to tormented Argentine consumers, who are gradually being incarcerated behind an impenetrable wall of fiscal constraints which effectively prevent them from dealing with the outside world. The rules governing e-commerce importations are so strict and bureaucratic that such imports will cease, to all intents and purposes. Argentinians are used to getting around their government’s pettifogging restrictions, yet even so, this is a Draconian and illiberal measure, which the government has been driven to by its own profligate incompetence. No doubt digital imports, which cannot be taxed at all, will substitute in some respects: no-one will buy a CD from the outside world any more; instead they will download the digital version of the album direct from i-Tunes or wherever, using a tablet bought duty-free on a trip … Read More »


Winter Games

Posted on February 3rd, by Global Tax Weekly in Individual Taxation, Real Estate. No Comments

It’s easy to have a go at Russia this week, and almost everyone is doing it, between its cack-handed attempts to influence Ukrainian affairs and the giant, gilded hostage to fortune represented by the Sochi games which are close to turning Vladimir Putin into a laughing stock. So here is a rare bouquet for the Economic Development Ministry, which has sensibly proposed to reduce the rate of tax imposed on people who rent out their apartments. Well, perhaps it is sensible, and perhaps not. It sounds good, but if as they say 95 percent of private landlords are evading the 13 percent income tax that should apply right now, why would a reduction to 12 percent or 11 percent make any difference? Even if the rate was reduced to 5 percent, no-one will pay it, because paying it involves declaring … Read More »





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