July2014


Bread-Basket To Basket-Case

Posted on July 27th, by Global Tax Weekly in Individual Taxation, Tax Avoidance, Trade. No Comments

It used to be known as the bread basket of the Soviet Union. Now Ukraine is more like the economic basket case of Europe. What’s happening in the east of Ukraine right now is truly tragic. But leaving aside that ethnic conflict, the other tragedy is that things ought to have turned out so much better. When Ukraine gained independence from the Soviet Union, it was generating one-quarter of the USSR’s agricultural output while its diversified industrial sector was one of the bloc’s main workshops. But instead of building on this base, successive governments seem to have squandered Ukraine’s economic potential to the point where it has probably gone backwards rather than forwards. A huge problem is that corruption is rife and pervades the public and private sector at all levels. Surviving as a business very much depends on who … Read More »


Collateral Damage

Posted on July 25th, by Global Tax Weekly in Banking, Citizenship, Individual Taxation, International Taxation. No Comments

Something has gone very wrong somewhere when an American passport, historically that most prized of possessions, is considered a curse rather than a blessing. But the statistics don’t lie: the Treasury Department’s own figures show just over 1,000 people handed back their passports or their green cards in the first quarter of 2014, an increase of almost 50 percent compared with Q1 2013. And this is no freak either, because these numbers have been steadily rising for the past two or three years. What these raw figures don’t tell us is why people are turning their backs on America in increasing numbers, and there could be any number of reasons, political or practical. However, let’s face it, most of us are thinking it: tax is the reason. But more specifically FATCA, which went into full force (almost) on July 1. … Read More »


Jaitley’s High Jinks

Posted on July 20th, by Global Tax Weekly in Budgets, Corporation Tax, Individual Taxation, International Taxation, Offshore. No Comments

Arun Jaitley’s first national budget as Indian Finance Minister comes at a critical juncture for India. Most economists would probably agree that India should be challenging China and the major advanced economies a lot harder than it is right now, but the reason it isn’t is because its enormous economic potential seems to have been squandered. Jaitley’s declaration that he is “duty bound” to usher in a policy regime that will result in higher growth seems to have been generally well received by those with a stake in the Indian economy. But excuse me if I play the contrarian here! True, the budget eases some barriers to foreign investment, and places an emphasis firmly on investment in industry and infrastructure which is sorely needed. But after leading investors to believe that the previous Government’s retrospective tax measure – the thing … Read More »


Saving The SAR

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

Writing for another publication not so long ago, an editorial colleague of mine suggested that Hong Kong was finished as a financial center. Well, actually, he didn’t go quite that far. But questions about Hong Kong’s place in the world at present and in the future, now it is nestled firmly in the bosom of communist China, are worth exploring. For a start, it seems incongruous that China should be creating more competition for Hong Kong by establishing financial centers in the mainland, notably Shanghai, where a new free zone for the financial services and investment, commodities trading, and logistics sectors have been created. Then there’s its rivalry with Singapore which has emerged as a regional investment and trading hub par excellence and voted the best place in the world to do business for the sixth year running by the … Read More »


Judge And Jury

Posted on July 13th, by Global Tax Weekly in Banking, Corporation Tax, International Taxation, Tobin Tax. No Comments

One does have a modicum of sympathy for Her Majesty’s Revenue and Customs, albeit a tiny one. Regularly lambasted by Parliament’s Public Accounts Committee (PAC) – led by Labour MP Margaret Hodge, who has emerged as Britain’s answer to Senator Carl Levin in America – and the mainstream media for being soft on corporate tax avoidance and cosying up to large multinationals in a series of so-called “sweetheart” tax rulings, HMRC is also castigated by the same set of critics for an increasingly heavy-handed approach in its numerous tax compliance campaigns. Damned if you do and damned if you don’t, you could say. On the first point, the criticism of the department has been a tad harsh. HMRC can only uphold the laws which are set by parliament in the first place, and a study of five sweetheart deals by … Read More »


Derelict Directive

Posted on July 6th, by Global Tax Weekly in Banking, Individual Taxation, International Taxation, Offshore, Tax Avoidance. No Comments

Switzerland is probably fairly happy that international attention this week was being devoted to a French bank, for a change, and newly-announced figures for the money the country generated from applying the EU’s Savings Tax Directive may also have created a small frisson of satisfaction among the country’s financial leaders. For others, who don’t understand why, at first blush USD570m doesn’t seem to be a derisory amount of money to have extracted through a tax of 30 percent on interest payments, even if it was down 20 percent on last year, but hold hard: while there are no robust figures for total Swiss assets under management, a semi-official figure published last year suggests that they amount to about USD6 trillion, representing more than a quarter of global AUM. USD570m is 30 percent of USD1.9bn, which is an astronomically small proportion … Read More »


Oz Carbonized

Posted on July 2nd, by Global Tax Weekly in Carbon Taxes, Mining, Parliament. No Comments

By the time you read this, the farcical saga of Australia’s carbon legislation may have reached the end of its beginning, to use Winston Churchill’s words, but it probably won’t have reached the beginning of its end. The new Senate will have been installed on July 1st, and after no doubt a considerable amount of ritual grandstanding (all legislatures do it) may have gotten to vote on the repeal of the carbon tax installed by the outgoing Labour government. But if it does so, the minority parties will have extracted a high price by forcing the Government to retain its Renewable Energy Target, and the Clean Energy Finance Corporation which has supported renewable energy projects. They are also going to try to compel the Government to enshrine a carbon pricing scheme in law, although the price would be set at … Read More »





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