April2014


Broken Europe

Posted on April 27th, by Global Tax Weekly in Banking, Budgets, IMF, Individual Taxation. No Comments

A fall in average deficits in the Eurozone and the European Union in 2013 sounds like good news, but lift the hood and the picture is not so pretty. Total debt in the Eurozone (17 countries) increased to 92.6 percent of gross domestic product from 90.7 percent in 2012, ever further above the European Union’s Maastricht limit of 60 percent. For the whole EU, debt increased from 85.2 percent of GDP to 87.1 percent. Obviously these figures reflect a mismatch between income and expenditure. It’s not however the case that public expenditure increased everywhere: although in France public spending reached a record 57.1 percent of GDP, overall EU public spending fell marginally to just less than 50 percent. Alongside increases in debt, the falls in deficits merely testify to a concomitant increase in tax revenues which ate into the gap … Read More »


Hi-Tech Coffee

Posted on April 24th, by Global Tax Weekly in Corporation Tax, International Taxation. No Comments

Coffee, anyone, with your double Irish Dutch sandwich? That’ll be Starbucks, then, especially if you’re at say Oxford Circus or Trafalgar Square. The firm has announced that it is moving its European HQ from the Netherlands to the UK. Although the company was fairly unclear about its motives, it can’t be irrelevant that the UK’s corporate tax rate will be down to 20 percent from next year, while the Netherlands sticks with its 25 percent rate and has no plans to reduce it. Of course, that’s not the whole story: the Dutch withholding tax regime is hard to beat, although the UK’s participation exemption is by now not that different from the Dutch regime; and the Dutch patent box rate of 5 percent is still much better than the UK’s 10 percent rate. I would not have guessed that serving … Read More »


The Sopranos Are Alive And Well

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

All that glitters is not gold. Especially in tax. I am torn between “Italy Confirms Tax Cuts,” which sounds clear enough, and “India Will Enhance Tax Administration,” which is indeed much needed. But this is just another Committee: it is a rule of politics that when you can’t work out what to do about a given situation, or if what you would like to do will upset too many of your supporters, then you appoint a Committee of the great and good to think about it for two years before telling you that they can’t think of what to do about it either. So that leaves us with Italy. Mr Renzi looks nice, doesn’t he? I would happily have dinner with him, and I might even agree with some of his ideas, especially if he feeds me enough Tuscan Red. … Read More »


Deconstructing Trade

Posted on April 13th, by Global Tax Weekly in Trade. No Comments

In a masterpiece of diplomacy, China’s premier said last week that it was “open-minded” about the TPP (Trans-Pacific Partnership), which when you deconstruct it probably means that he is happy for Japan to wreck the chances of a successful TPP by refusing to negotiate on its rice tariffs (778 percent, as I recall). There is a double irony in this, given that Shinzo Abe is in reality quite willing to reduce the tariffs, but doesn’t need to play such a valuable card given that the US Congress has already ensured that there can be no further US trade treaties by refusing to allow the Trade Promotion Authority to be reconstituted, and that China on the other hand has been a willing player in the World Trade Organization. What actually puzzles me most is the question of why Japan was ever … Read More »


There Are SMEs In China

Posted on April 10th, by Global Tax Weekly in Individual Taxation, SMEs. No Comments

China announced a further package of tax cuts to benefit SMEs, extending previous reductions in income tax and VAT exemptions. That’s presumably good news for would-be businesspeople, although it’s difficult to tell from a distance how far Chinese entrepreneurs are tormented by bureaucrats, as is the case for small businesses in Europe and America. All governments make great play of their support for SMEs, but in most countries the reality is very different from the hype, at all levels of existence. The average Western small business would definitely regard its central government, its local government and the tax authority as being a well-armed and vindictive set of bandits determined to prevent it from succeeding in the market-place.

The panoply of difficulties confronting a would-be start-up in most countries includes at least the following:

a raft of administrative requirements (register your business, comply … Read More »


BEPS Biffed

Posted on April 6th, by Global Tax Weekly in Corporation Tax, OECD. No Comments

How good to see someone challenging the current OECD-inspired tax gospel with a comprehensive dissing of the BEPS heresy. The tax boss of the UK’s ACCA must have swallowed hard before accepting the report they had commissioned, but he has bitten the bullet. I’m not going to drown you in statistics, just one will do: Germany’s revenue from corporate income tax was 15 percent higher in 2013 than in 2012. Now how are you (well, I don’t mean you, I mean “they”) going to square that figure with the prevailing consensus, at least among politicians and tax collectors, that MNEs are getting away with blue murder? It’s just a bundle of politically-inspired, or maybe I mean debt-inspired balderdash. Everyone needs to remember at all times that, whatever usefulness it may have had in the past, the OECD is nowadays simply … Read More »


Wheels Within Wheels

Posted on April 3rd, by Global Tax Weekly in Trade. No Comments

Let’s try to understand the trading rights and wrongs of the Great Indian Bicyle Story. Well, actually, I can’t. There are a lot of figures provided by ASSOCHAM in that story, and none of them are supported by believable statistics. It comes across as a compilation of protectionist statements by a domestic lobbying pressure group, and is certainly no basis on which to reach any conclusions. India doesn’t have any effective equivalent to the USITC, and most of the time its behaviour in the trading sphere appears incoherent, driven by this or that internal government faction in a way that is indecipherable to outside observers; and all the more so at present as politicians are focused on the upcoming election, which is quite likely to herald a major power shift with an unpredictable impact on international trading policies. So for … Read More »





RELATED ARTICLES AND INFORMATION

EU Changes Excise Duty Rules On Alcohol

EU member states have reached a provisional agreement on modernized taxation rules for alcohol products, following a meeting held on June 24, at which...

Germany And Bulgaria Announce VAT Reductions

In Germany, the much discussed fiscal stimulus package has been approved by the Federal Cabinet, paving the way for a reduction in the standard...

US Overseas Taxpayers Receive Deadline Extension

The US Internal Revenue Service has reminded overseas taxpayers living and working abroad that they have an extra month to file their 2019 federal...