August2014


Country Capers

Posted on August 31st, by Global Tax Weekly in Citizenship, Offshore. No Comments

A bit of a theme this week: how the powerful like to bully the small and the weak. And we start with Spain, which, according to one senior figure in the Spanish Government, is deprived of EUR1bn every year in tax revenue as a result of Gibraltar’s low-tax regime. Gibraltar isn’t exactly a country. In fact its constitutional status confuses many people. Gibraltar is an Overseas Territory of the United Kingdom, but although Britain is responsible for its defense, foreign affairs and internal security, the Rock is self-governing based on a constitution written in the 1960s. It also has a sort of half-in, half-out relationship with the EU which it entered along with the UK while remaining outside of the common external tariff and EU VAT regimes, something which also probably irritates Spain. Essentially though, Gibraltar is a little piece … Read More »


French Follies

Posted on August 24th, by Global Tax Weekly in Budgets, Corporation Tax, Individual Taxation. No Comments

In life, you tend to reap what you sow, and there are few better demonstrations of how accurate this idiom can be than the condition that France finds itself in. Francois Hollande came to power openly promising to squeeze every last cent from the wealthy and from wealth creators in taxes as a means to repair France’s tattered public finances. As recent eurozone growth (or non-growth) statistics suggest, all this policy has succeeded in doing is throttling the economy. Yet worringly, despite raising France’s tax burden to painful levels, the Government still looks like missing its budget deficit target this year, and Paris is pleading with the European Commission for a more flexible approach to fiscal discipline. Meanwhile, Hollande’s popularity ratings have sunk in tandem with the French economy, and, in one of the most complete u-turns in political history, … Read More »


Upside-Down Hill

Posted on August 17th, by Global Tax Weekly in Corporation Tax, Parliament. No Comments

It’s something of an exaggeration to say that the United States Congress is totally paralyzed. Yes, the ideological chasm between a left-wing Government and a right-wing Republican Party holding sway in the House of Representatives is wide. Yet since the commencement of the 113th Congress on January 5, 2013 – perhaps the most divided Congress in modern history – 146 laws have been enacted and the current session isn’t due to end until January 3, 2015. Yes, this figure is substantially lower than the 283 laws enacted in the 112th Congress and the 383 enacted in the 111th. But it shows that Congress isn’t completely gridlocked. The difference between the current session and the previous two is that the amount of tax legislation passed over the last 18 months has been virtually nil, (scouring the list of statutes, I found … Read More »


Cold Comfort

Posted on August 10th, by Global Tax Weekly in Corporation Tax, Individual Taxation. No Comments

Governments certainly benefit from being rather lazy with tax thresholds, which somehow seem to move much slower than earnings growth, so that more and more people fall into higher rate tax bands each year. This phenomenon is usually referred to in tax circles as “bracket creep,” when tax bands fail to keep pace with wage inflation. Germany has its own phrase for it however, which translates as “cold progression.” But while Cameron has at least expressed a desire to thaw the cold progression, the German Government has consistently rejected all calls to give German taxpayers a break by shifting tax thresholds for a number of years now, with the latest rejection coming through a spokesman for Chancellor Merkel. It seems something of a mean-spirited stance given that the Government has eradicated its budget deficit, and the German economy, until recently, … Read More »





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