Cronky Posted March 22, 2009 Share Posted March 22, 2009 Letter in the FT The dawning of a bright new day for tax havens Sir, Gordon Brown speculates that increased transparency is the beginning of the end for tax havens . . . . . . Small jurisdictions are unrepresented in the forums where the blame game for the world's ills is being played out. “Low Taxes” have been mischievously conflated with “low regulation” to unfairly malign small offshore centres. The UK Channel Islands dumped tax evaders 10 years ago with legislation treating foreign tac evasion as a predicate crime for money laundering.; other UK offshore centres followed suit shortly thereafter. Large countries like the US have yet to take similar steps, perhaps because the substantial deposits from foreigners in US Banks provide essential funding in US banks provide essential funding for their structural budgets deficits. Expert Observers, including the International Monetary Fund, have regularly acknowledged UK offshore territory transparency and supervision as amongst the toughest in the global finance industry. The reputation of the UK offshore centres such as the Crown Dependencies, Bermuda and Cayman for probity, professional skills and financial sophistication enables them to attract capital from around the world. Such capital is injected into UK, Europe and the US banking and securities markets, creating crucial synergies with such centres. Public perceptions of transparency standards in the UK offshore centres at at least catching up with the current reality . Those centres will be helped, not harmed, by a more informed appreciation of their important role in the global economy. Link to comment Share on other sites More sharing options...
bluemonday Posted March 22, 2009 Share Posted March 22, 2009 Front page of todays Sunday Times Minister in charge of offshore clampdown ran tax haven firm http://business.timesonline.co.uk/tol/busi...icle5950498.ece Link to comment Share on other sites More sharing options...
Tempus Fugit Posted March 22, 2009 Share Posted March 22, 2009 poacher turned gamekeeper Link to comment Share on other sites More sharing options...
P.K. Posted March 22, 2009 Share Posted March 22, 2009 The UK Channel Islands dumped tax evaders 10 years ago with legislation treating foreign tax evasion as a predicate crime for money laundering.; other UK offshore centres followed suit shortly thereafter. What a load of old guff... Under EU rules imported items from non-EU into the EU do not pay VAT if they are under £18. So Tesco, Amazon etc etc immediately set up mail order houses in the Channel Islands to take advantage of this "loophole" because books, cd's, dvd's fit the profile perfectly. There are also office supplies set-ups selling printer cartridges and so on priced by an amazing coincidence at £17.99 - "What a surprise!" I hear you say. Did the CI legislators "discourage" this activity? What do you think!!!! They tightened up on it only to the extent that they wanted all the admin and so on to be "on island" as well to employ as many locals in the process as possible and ensure as much as the profits of this scam as they can get their grubby hands on stay the CI's. Says it all about them really... Link to comment Share on other sites More sharing options...
hboy Posted March 22, 2009 Share Posted March 22, 2009 The UK Channel Islands dumped tax evaders 10 years ago with legislation treating foreign tax evasion as a predicate crime for money laundering.; other UK offshore centres followed suit shortly thereafter. Did the CI legislators "discourage" this activity? What do you think!!!! They tightened up on it only to the extent that they wanted all the admin and so on to be "on island" as well to employ as many locals in the process as possible and ensure as much as the profits of this scam as they can get their grubby hands on stay the CI's. Says it all about them really... Yes but that is not tax evasion that really is the point. If VAT law in the EU/UK says that items received from outside the EU under £18 are not liable to pay VAT then who ever sets up in Jersey selling stuff VAT free over the Net for £17.99 is not a tax evader. They are legally avoiding paying the tax by complying fully with EU / UK legislation. Its amazing in this day and age that people still cannot separate avoidance from evasion, they are two totally separate thinbgs. Link to comment Share on other sites More sharing options...
P.K. Posted March 22, 2009 Share Posted March 22, 2009 You avoid paying tax by utilising methods of evasion such as a non-EU offshore "haven" like the CI's. It still amazes me that in this day and age that some still try to "legitimise" tax avoidance. Be aware that in the current climate if the losses from the likes of this little scam breach a threshold then the loophole will be closed. Link to comment Share on other sites More sharing options...
hboy Posted March 22, 2009 Share Posted March 22, 2009 You avoid paying tax by utilising methods of evasion such as a non-EU offshore "haven" like the CI's. It still amazes me that in this day and age that some still try to "legitimise" tax avoidance. Be aware that in the current climate if the losses from the likes of this little scam breach a threshold then the loophole will be closed. What you have said is nonsense. If EU VAT law says goods under £18 can be imported from outside the EU VAT free then the practice is actually 100% legal in every EU member state. There is not even an aspect of avoidance to the transaction it is 100% legal until and unless the EU change the appropriate law. What you even mean by stating "You avoid paying tax by utilising methods of evasion" makes no sense at all. Tax evasion is using illegal means to evade paying taxes in the country in which you are taxed this has nothing to do with evasion or methods of evasion. Its not paying tax by 100% legal means. Link to comment Share on other sites More sharing options...
P.K. Posted March 22, 2009 Share Posted March 22, 2009 By all means quote where I have posted that it's illegal. Oh dear, I haven't. So hboy, Tesco aren't based and taxed in the UK then. Oh dear, yes they are. Had the mail order operation been originally based in the CI then fair enough. But it wasn't. Despite the simple facts that the management, funding, organisation, backing, order processing, collecting payment etc etc ALL takes place in the UK they deliberately set up the system to exploit the CI's non-EU status where a warehouse monkey puts a cd in an envelope and that most simple action alone in the whole Tesco purchasing process means they evade paying VAT on the transaction. The cd is IMPORTED into the CI's for expressly that purpose ffs! But should the CI VAT losses exceed a limit that puts it over the IR event horizon then they'll act to close the loophole. Go play semantics, you obviously get a vicarious pleasure from it... Link to comment Share on other sites More sharing options...
hboy Posted March 22, 2009 Share Posted March 22, 2009 Had the mail order operation been originally based in the CI then fair enough. But it wasn't. Despite the simple facts that the management, funding, organisation, backing, order processing, collecting payment etc etc ALL takes place in the UK they deliberately set up the system to exploit the CI's non-EU status where a warehouse monkey puts a cd in an envelope and that most simple action alone in the whole Tesco purchasing process means they evade paying VAT on the transaction. The cd is IMPORTED into the CI's for expressly that purpose ffs! In reality the CDs and DVDs they send never enter the UK until they are sold; the stock is shipped to the Channel Islands from outside the EU (US, China, Hong Kong) and administratively all the billing is done over the phone or online with back office support maybe in the UK. So what you are saying is that no company can ever set up any business outside of the EU or in a tax centre and have any additional support services provided eleswhere ever because the only explanation for that can be that its tax evasion? The fact that Tesco's / Amazon whoever set up a company to legally sell DVD's and legally utilise a piece of VAT legislation is tax evasion to you is it? Despite the fact that such an operation is 100% legal under EU law? Have you thought why this particular "loophole" exists? Could you imagine the administrative nightmare of customs tracking every penny spent and applying VAT on it. For administrative reasons they decided on £18 as being a figure that they are happy with that does not attact VAT so why can this possibly be tax evasion as you suggested? There is NO tax to evade because the EU has decided it does not want to apply VAT to that £18 transaction so the operations are entirely 100% legal in all aspects of their operation. If they change the law then they change the law but that does not mean that there is anything wrong with these companies now as they operate completely within the law. They do not evade tax as no tax is chargeable on that £18 transaction. Your argument is total rubbish. Your also saying that someone like Barclays operations here are also tax evasion despite the fact that they moved their offshore banking here because they could not service expat accounts in the UK and needed a centre of excellence in a more flexible jurisdiction outside of the UK, but because they set a new business up here in your logic that has to be tax evasion. Right? I mean you can't concievably thinbk of any other reason why Barclays would want to be here when in fact there are many and tax is only a part of those reasons. Link to comment Share on other sites More sharing options...
Albert Tatlock Posted March 22, 2009 Share Posted March 22, 2009 You avoid paying tax by utilising methods of evasion such as a non-EU offshore "haven" like the CI's. It still amazes me that in this day and age that some still try to "legitimise" tax avoidance. Be aware that in the current climate if the losses from the likes of this little scam breach a threshold then the loophole will be closed. No, they avoid paying tax by utilising legitimate methods of avoidance. The rules are clear - Any 'person may legitimately plan his or her affairs so as to avoid the incidence of obligations or liabilities imposed by the law, no-one is allowed to evade the operation of otherwise mandatory provisions once duties and liabilities have been properly imposed or incurred.' That is the fundamental difference between avoidance and evasion. People can't have their globalisation cake and eat it. There are numerous examples all over the world of where companies have legitimately relocated for cheaper labour and lower/fewer taxes/grants etc. 'Tax Haven' is such a misused phrase. A tax haven is 'a place where certain taxes are levied at a low rate or not at all'. Compared to the amount of tax people have to pay overall living in the UK, many major countries in Europe could be classed as 'tax havens' relative to the UK. Link to comment Share on other sites More sharing options...
manshimajin Posted March 22, 2009 Share Posted March 22, 2009 'Tax Haven' is such a misused phrase. A tax haven is 'a place where certain taxes are levied at a low rate or not at all'. Compared to the amount of tax people have to pay overall living in the UK, many major countries in Europe could be classed as 'tax havens' relative to the UK. The thing that intrigues me is that Broon is now pushing a line that if taken to its logical conclusion would mean that all EU countries should have the same taxation rules (centrally enforced) so that none of them would have a tax advantage vis a vis others - for example the fact that the UK taxes expats differently to UK nationals. The Germans must be quietly loving it!!!! as they have pushed against 'unfair' taxation in the UK and other EU countries for a long time. Link to comment Share on other sites More sharing options...
P.K. Posted March 22, 2009 Share Posted March 22, 2009 Dear me but you lot could start an argument in an empty house. AT NO TIME HAVE I POSTED IT'S ILLEGAL. Have you wankers finally managed to assimilate that? Which makes all of your chest-beating exactly that, a hollow, empty noise. But then an empty vessel does make the most noise does it not... The limit is set at £18 due to a "back of a fag packet" calculation on how much it would cost to administer against how much this avoidance scheme is worth. Because the exploitation has reached commercial levels it may well belly-up in the future. But be aware that could also apply to any avoidance scheme you care to mention and Obama et al see it as a priority. We live in interesting times do we not? I take your point about globalisation Albert. I'm also against protectionism. But at the end of the day the more cheap stuff we buy from China the more UK jobs we put at risk, including our own. Folks lose their jobs, less spendies around, everyone in that economic sphere suffers. Lose/lose. Link to comment Share on other sites More sharing options...
Gladys Posted March 22, 2009 Share Posted March 22, 2009 PK, you mentioned evasion and that is illegal. Link to comment Share on other sites More sharing options...
Lastchance_Exception Posted March 23, 2009 Share Posted March 23, 2009 You can all argue over evasion and avoidence untill the cows come home. At the end of the day, people with money will move it from places which no longer protect them from predatory tax authorities. Take the IOM for instance.... it'll be back to sheep and rabbits if they continue down the road they're on at the moment! Link to comment Share on other sites More sharing options...
manshimajin Posted March 23, 2009 Share Posted March 23, 2009 From today's FT (23/03/09) The ECB will clearly come under pressure to do more, as monetary conditions in the eurozone are growing tighter. As European leaders focus on tax havens and hedge funds, it is hard to detect a sense of urgency in dealing with the wider crisis. They seem to think that they did enough last October, when they issued blanket guarantees on bank debt and offered voluntary recapitalisation schemes One suspects that the current focus on tax havens may be because unlike General Galtieri the current band of politicians can't think of somewhere else to invade to distract public opinion from the mess they have created. A good war would stop people asking awkward questions. They also need something to agree on at the G20 meeting as all the signs are that there is no understanding, let alone agreement, on how to resolve the financial problems they have dropped the world into. Link to comment Share on other sites More sharing options...
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