Not a tax haven.

[woolley]

So are the secretive US states going to be included in these laudable initiatives? Or will it be that instead of only the top 10% being able to avail themselves of tax avoidance, it will instead be only the top 1%?

[notwell]

The headline story in today’s Guardian is “UK and European allies plan to deal ‘hammer blow’ to tax evasion” – “George Osborne agrees to cooperate with France, Germany, Spain and Italy on exposing shell firms and overseas trusts’. I think this article is signalling two major changes for Tax Efficient regimes like ours: 1) from now on the UK is going to work tightly with the other European States to end tax secrecy, and 2) beneficiaries of Trusts as well as Companies are now in the mix.

 

The article talks about ‘new rules’ announced this week, without specifying what these are. I suspect these new rules will reflect Wolfgang Schäuble’s (German Federal Finance Minister), ten-point plan to combat tax evasion (see below). At the heart of Schäuble's ten-point plan is an internationally-linked-up ‘transparency’ register, which lists the true owners of all companies, and now it seems also trusts. The EU has already agreed to implement by 2017 the fourth Money Laundering Directive; a directive that requires each national government to establish a register of the beneficial owners of companies. It seems from to the Guardian article the implementation date for this networked up database will be 1January 2017, and also that even companies closed down during 2016 will be included.

 

Schäuble has wanted for some time to strengthen global actions against money laundering and/through tax havens. What has now accelerated his plans is the release of the Panama Papers. As French finance minister, Michel Sapin, said on Wednesday: “[The Panama Papers have] breathed new life into the tax evasion crackdown, they have accelerated the process. What has become clear is that we need complete cross-border transparency and international tools to deal with the problem.” Things are moving faster than most people expected.

 

Schäuble has been a ‘man on a mission’, and now like he is leading a 'team on a mission'. We need to take heed of these sweeping changes; the tide it seems has irreversibly turned.

 

Schäuble’s ten-point plan:

(Note; the following is my best interpretation of the situation, and may not be 100% accurate)

1. Industrial Money Laundering

Within Germany itself, Schäuble wants to strengthen action against money laundering, especially to go after industrial scale money laundering. Having already introduced stricter rules against money laundering in the financial sector, Schäuble is now taking on non-banking sectors.

2. Changes to the Statue of Limitations

The statute of limitations would only apply to tax evaders, if they become compliant with the new reporting requirements for companies with international connections. There would be no time ‘limit’ on those who don’t.

3. Criminal Prosecutions

Schäuble wants to introduce tougher penalties for companies. Under the current system, prosecutions fail in misconduct trials, because the inability to prove personal culpability. The current bar for convictions is simply too high. After his changes, companies and their management teams will be more accountable.

4. Transparent tax shelters

Providers of tax relief schemes will be obliged to make discloses to tax authorities.

5. Money Laundering Registers

Schäuble wants the national transparency register that is planned for Germany to will be systematically networked to the world. Tax administrations will also have access to money laundering registers. These registers should be also be accessible to non-governmental organizations and journalists. In return to providing access Schäuble expects that non-governmental organizations and journalists will also provide authorities with the results of their research.

6. Company Registers showing Beneficial Ownership

These registers will make corporate structures more transparent. The EU’s fourth Anti-Money Laundering (AML) Directive means that there is already agreement that these registers will be introduced in EU countries. The EU member states must implement the fourth directive nationally by 2017. Schäuble is campaigning worldwide for registers of beneficial owners of to be created.

7. Monitoring

He wants the automatic exchange of information to have a monitoring mechanism. And he wants monitoring to be global by 2017.

8. Initiative 2017

Schäuble wants to ensure that as many possible states and territories as possible will implement worldwide the new standard for the automatic exchange of information. This should start in 2017. So far nearly 100 countries have signed up to this initiative.

9. Blacklists

The various national and international "black lists" of tax havens are to be unified. Schäuble wants the leadership of this process to be transferred to an international organization such as the OECD.

10. Automatic exchange of information

Schäuble is urging Panama to join the international automatic exchange of information in tax matters and to ensure that inactive and insubstantial companies and their shareholders can be identified. If Panama does not cooperate Schäuble wants Panama and any other uncooperative jurisdictions to be prevented from accessing financial transactions internationally.

The UK must be crapping themselves.

[Lxxx]

So are the secretive US states going to be included in these laudable initiatives? Or will it be that instead of only the top 10% being able to avail themselves of tax avoidance, it will instead be only the top 1%?

 

It'll soon be the top 0.1%, taxes are for little people. They'll still need avenues to buy off politicians and for international corporations to 'plan their finances more efficiently' however the aspirational middle classes who got in on the act the last few decades will find themselves back with the serfs again.

Edited April 15, 2016 by Lxxx

[Andy Onchan]

The headline story in today’s Guardian is “UK and European allies plan to deal ‘hammer blow’ to tax evasion” – “George Osborne agrees to cooperate with France, Germany, Spain and Italy on exposing shell firms and overseas trusts’. I think this article is signalling two major changes for Tax Efficient regimes like ours: 1) from now on the UK is going to work tightly with the other European States to end tax secrecy, and 2) beneficiaries of Trusts as well as Companies are now in the mix.

 

The article talks about ‘new rules’ announced this week, without specifying what these are. I suspect these new rules will reflect Wolfgang Schäuble’s (German Federal Finance Minister), ten-point plan to combat tax evasion (see below). At the heart of Schäuble's ten-point plan is an internationally-linked-up ‘transparency’ register, which lists the true owners of all companies, and now it seems also trusts. The EU has already agreed to implement by 2017 the fourth Money Laundering Directive; a directive that requires each national government to establish a register of the beneficial owners of companies. It seems from to the Guardian article the implementation date for this networked up database will be 1January 2017, and also that even companies closed down during 2016 will be included.

 

Schäuble has wanted for some time to strengthen global actions against money laundering and/through tax havens. What has now accelerated his plans is the release of the Panama Papers. As French finance minister, Michel Sapin, said on Wednesday: “[The Panama Papers have] breathed new life into the tax evasion crackdown, they have accelerated the process. What has become clear is that we need complete cross-border transparency and international tools to deal with the problem.” Things are moving faster than most people expected.

 

Schäuble has been a ‘man on a mission’, and now like he is leading a 'team on a mission'. We need to take heed of these sweeping changes; the tide it seems has irreversibly turned.

 

Schäuble’s ten-point plan:

(Note; the following is my best interpretation of the situation, and may not be 100% accurate)

1. Industrial Money Laundering

Within Germany itself, Schäuble wants to strengthen action against money laundering, especially to go after industrial scale money laundering. Having already introduced stricter rules against money laundering in the financial sector, Schäuble is now taking on non-banking sectors.

2. Changes to the Statue of Limitations

The statute of limitations would only apply to tax evaders, if they become compliant with the new reporting requirements for companies with international connections. There would be no time ‘limit’ on those who don’t.

3. Criminal Prosecutions

Schäuble wants to introduce tougher penalties for companies. Under the current system, prosecutions fail in misconduct trials, because the inability to prove personal culpability. The current bar for convictions is simply too high. After his changes, companies and their management teams will be more accountable.

4. Transparent tax shelters

Providers of tax relief schemes will be obliged to make discloses to tax authorities.

5. Money Laundering Registers

Schäuble wants the national transparency register that is planned for Germany to will be systematically networked to the world. Tax administrations will also have access to money laundering registers. These registers should be also be accessible to non-governmental organizations and journalists. In return to providing access Schäuble expects that non-governmental organizations and journalists will also provide authorities with the results of their research.

6. Company Registers showing Beneficial Ownership

These registers will make corporate structures more transparent. The EU’s fourth Anti-Money Laundering (AML) Directive means that there is already agreement that these registers will be introduced in EU countries. The EU member states must implement the fourth directive nationally by 2017. Schäuble is campaigning worldwide for registers of beneficial owners of to be created.

7. Monitoring

He wants the automatic exchange of information to have a monitoring mechanism. And he wants monitoring to be global by 2017.

8. Initiative 2017

Schäuble wants to ensure that as many possible states and territories as possible will implement worldwide the new standard for the automatic exchange of information. This should start in 2017. So far nearly 100 countries have signed up to this initiative.

9. Blacklists

The various national and international "black lists" of tax havens are to be unified. Schäuble wants the leadership of this process to be transferred to an international organization such as the OECD.

10. Automatic exchange of information

Schäuble is urging Panama to join the international automatic exchange of information in tax matters and to ensure that inactive and insubstantial companies and their shareholders can be identified. If Panama does not cooperate Schäuble wants Panama and any other uncooperative jurisdictions to be prevented from accessing financial transactions internationally.

 

That's all very well but what happens when the beneficial owner is a mutual fund?

 

And will all of this negate the requirement for DP laws and the sanctity of privacy?

 

I cannot see all of the above happening in my lifetime.

 

Edited: for grammar

Edited April 15, 2016 by Andy Onchan

[notwell]

Hopefully not Andy.

[woolley]

And if it does, the deepest pockets will find ways to see that it doesn't for them.

[notwell]

This is all quite funny to some degree. A load of countries are actually being dragged in (including the UK) to something the IOM has been doing for years or has agreed to already do via CRS.

[When Skies Are Grey]

Tax Haven is a Tax Haven regardless of its geographical location - "offshore" is too often bandied around to deflect attention.

 

Lets see how the UK get on with this.....

[NoTail]

Quite so. Then the rest of the world will turn their attention to America - that will be interesting.

[woolley]

If you are a US citizen you pay taxes to Uncle Sam wherever you live. It appears to me that the US is aiming to be the only place in the world that is allowed to have functioning tax havens. For all the noises they make on the subject, they always seem to conveniently forget the tax havens within their own borders.

 

https://www.offshore.finance/en/21-offshore-company-formation-in-delaware-llc

Edited April 15, 2016 by woolley

[Andy Onchan]

If you are a US citizen you pay taxes to Uncle Sam wherever you live. It appears to me that the US is aiming to be the only place in the world that is allowed to have functioning tax havens. For all the noises they make on the subject, they always seem to conveniently forget the tax havens within their own borders.

 

And I'm sure we'll see more states joining those who already operate as such.

[pongo]

"offshore" is too often bandied around to deflect attention.

 

That wet stuff in between the UK and the 'adjacent continent' is a giveaway.

[thesultanofsheight]

 

"offshore" is too often bandied around to deflect attention.

 

That wet stuff in between the UK and the 'adjacent continent' is a giveaway.

That is our eternal dilemma. We are most certainly off the shores of the UK and that won't change until probably the next ice age.

[pongo]

Just as the IOM is an offshore British jurisdiction, so the UK is an offshore jurisdiction of the EU, currently.

[woolley]

Just as the IOM is an offshore British jurisdiction, so the UK is an offshore jurisdiction of the EU, currently.

Different. UK Parliament is sovereign. Tynwald is not.