It’s been an interesting few days for the European Union, or more specifically its executive arm, the European Commission.
First came the announcement of a screening framework for FDI. This is intended to shine a light on the more shadowy sources of foreign investment into the EU. It’s quite ironic really; after all, the European Commission is hardly the most democratic and transparent of governmental organizations. More on the matter of transparency later.
The other notable development was the publication by the Commission of its vision for “fair” taxation of the digital economy, which came after France, Germany, and other influential member states had been pushing the issue of digital taxation for a number of weeks.
We can’t say for sure whether the Commission’s announcement is the result of increasing political pressure for solutions to tax issues in the digital economy, or whether it was working towards … Read More »
Bitcoin appears to be gaining increasing regulatory acceptance in some parts of the world. In Australia, for example, the Government recently introduced legislation to ensure that virtual currencies operate on an even tax playing field with “physical” money. Treasurer Scott Morrison hopes that the legislation will make it easier for new innovative digital currency businesses to operate in Australia, and some offshore financial centers are already vying to become leading jurisdictions in FinTech expertise.
On the other hand, regulators and tax authorities in other parts of the world seem deeply suspicious of virtual currencies, given the anonymity they provide to users. A notable example is the United States, where the Internal Revenue Service obtained a court order in December 2016 compelling bitcoin exchange Coinbase to produce records identifying US taxpayers who have used its services.
Indeed, there are some who believe that sooner or … Read More »
Some things in the world of tax seem to never change however. Particularly governments’ apparent fixation with tax amnesties. Brazil is the latest in a long list of jurisdictions that have announced an amnesty-related development of one sort or another recently. In Brazil’s case, it has decided to extend the deadline for its latest disclosure scheme by one month to September 29.
The success or otherwise of an amnesty is likely to depend hugely on its terms and conditions – too much stick and taxpayers might stay below the radar, too much carrot and the rule of law could be undermined. Still, I don’t remember seeing too many headlines recently proclaiming that a disclosure scheme has been a roaring success. Indeed, the word “flop” is more readily used to describe the outcome of a tax amnesty. And notable flops have been reported in … Read More »
Denmark is a benchmark country. It is the archetype of a high-tax, high-spend northern European economy. So, when politicians in various parts of the world debate fiscal policy, they sometimes ask the electorate if they would rather live in a country like Denmark in preference to their own i.e. would they be prepared to put up with high taxes in return for a welfare state in which nobody is left behind economically. Indeed, the small Scandinavian nation, barely twice the size of Massachusetts, became an unexpected focal point in the last election campaign, and was held up by Democratic candidate Bernie Sanders as a model of social democracy.
Those on the right tend to argue of course that prosperity and individual liberty go hand-in-hand with low taxes and a small government. Singapore, for example, would be much closer to their ideal … Read More »
China may have been upbraided by the International Monetary Fund earlier this month for the lack of progressivity in its personal income tax regime – how ironic that a country run by communists has, according to the IMF, the highest level of income inequality in the world. However, in many other ways, China seems to be making good progress in adapting its tax system to the demands of today’s economy, including with proposals to improve tax incentives for scientific research.
Value-added tax has now been extended to all areas of the economy, and earlier this month, Chinese Premier Li Keqiang said that reform of the VAT regime would continue. VAT has already saved businesses an estimated CNY1.6tn (USD239.8bn) since its introduction, the Ministry of Finance said.
It was also announced recently that China is to allow foreign investors to defer tax on dividend income … Read More »