Thousands of words have been written across countless pages by the OECD to describe, analyze, and consider the tax challenges of the digital economy. Yet it took only a 97-word press release from United States Treasury Secretary to potentially consign them all to the trash can. He might as well have used Twitter.
Of course, Mnuchin’s statement, and the publication by the European Commission of a proposal for an interim digital tax, won’t kill the OECD’s work in this area any time soon.
Nevertheless, these developments tell us pretty much straight away that the OECD will struggle to attain the multilateral consensus that will be required to ensure that any new tax digital measures are workable. Statements issued by various EU member states, and also Switzerland, inform us of that.
While businesses and tax practitioners against this interim measure might hope these schisms might … Read More »
Okay, imagine this scenario if you will: it’s November 2018, and finally you’ve got all your tax planning ducks in a row now that Congress has fixed the broken bits of the tax reform legislation, and the Internal Revenue Service has issued most of the necessary guidance to help taxpayers comprehend the more novel parts of the Tax Cuts and Jobs Act. You’ve got your deductions lined up, your QBI sorted, you’ve avoided a BEAT, and you’re sure you’re not GILTI. Now you can breathe a sigh of relief.
But what’s this? You’ve been so engrossed in tax planning that you’ve forgotten about the elections. “Didn’t we just have one of those,” you think to yourself? Yes, but that was the Presidential election, and that was two years ago. This is the mid-terms, and the Democrats have won Congress back. And … Read More »
Last August we heard that the OECD’s Global Forum on Transparency and Exchange of Information was moving on to the issue of beneficial ownership of corporate entities in its fight against tax avoidance and evasion, and it certainly appears to be the case that once-reluctant jurisdictions are falling into line with this agenda as the next phase of global transparency boundary-pushing gets under way.
As with BEPS, the United Kingdom has set the pace here, having introduced its register of persons with significant control back in 2016. Now, all European Union member states are obligated to put in place procedures for the collection of beneficial ownership information under the Fourth Anti-Money Laundering Directive. Other countries, including Canada and Indonesia, are doing the same.
It was always thought that it would be difficult for the United States to toe this particular transparency line, … Read More »
Ordinarily, you wouldn’t expect to see companies and investors flow from a low-tax jurisdiction to a high-tax one (although, in the complex world of international finance, it often does in a roundabout kind of way). But sometimes, water can be seen flowing uphill too. In this case, from the United Kingdom to Italy.
The UK isn’t exactly a low-tax jurisdiction. But when compared with Italy, it’s a fiscal paradise. In the World Bank’s ease of doing business index, the UK is positioned 7th out of 190 jurisdictions, with Italy trailing in 46th. Narrowing the comparison down to just tax, and the gap gets significantly wider: the UK is 10th, and Italy is down at 112th. So not exactly the most logical move for a business or investor.
Yet, according to a senior official in the Italian finance ministry, those from the UK … Read More »
Free zones are presently all the rage (including in South Africa). So much so that Poland has decided to go the whole hog and transform itself into one big, country-sized special economic zone.
The fact that the world seems to have lost count of the number of its free zones tells you something about the rate at which they have proliferated in the post-World War Two era, and particularly in the last couple of decades. According to the World Freezone Atlas published in 2010, there were 1,735 free zones, dotted all over the globe. However, an OECD study published two years previously suggested that there were as many as 5,000 free zones. Perhaps the true figure is somewhere in the middle – something like 3,500 perhaps, as the World Trade Organization suggests.
The actual answer, I think, depends very much on your definition … Read More »