Results tagged “oecd blacklist”

We are by now used to hearing rhetoric about "pledges" to end bank secrecy and an end to tax havens, as if forcing another country to change its legal code were a natural course of action.

But what do the so-called tax havens think about all this? Here's an interesting article from Uruguayan newspaper El Pais (Uruguay was one of the 4 countries originally placed on an OECD "blacklist"). The author, respected Uruguayan economist Ignacio De Posadas, makes the case for Uruguay keeping it's bank secrecy law. Now of course he cannot speak for a country of 3 million people, but its revealing nonetheless to hear their story, not often represented in the Western press. The article is written article in Spanish; here are some of his arguments in translation.

- The issue isn't about when people use bank secrecy to commit serious crimes, nobody disputes that.

- Uruguay doesn't have any obligation to enforce the collection of French or British taxes (nor would those countries give them anything in return).

- What right do "powerful" countries have to pressure smaller countries into changing their internal laws - an action which will benefit the more powerful and result in a loss for the smaller country?

- The OECD text says that tax havens should bring themselves in line with "international standards" for tax-information sharing, as if it were a UN convention or some other multilateral agreement signed by Uruguay, when really it's an OECD convention, of which Uruguay is not a member and has nothing to do with.

- Why are they doing this? Because over several decades OECD countries have been expanding and complicating their systems of taxation - out of all proportion with the return these administrations give to taxpayers. In other words - it's their problem. What does Uruguay have to do with it?

- How does bank secrecy benefit Uruguay? In reality the question isn't being put in the right way. Bank secrecy is consecrated in the constitution. Of course there are limits and norms to bank secrecy, but these aren't pre-requisites. In other words..it doesn't matter if it benefits Uruguay or not, it's a right. Full stop.

The war on tax havens is about strong and powerful countries using force to impose themselves on smaller nation states. There are no guns but the principle is the same.

More on bank secrecy.

How offshore "tax havens" don't include US tax dependencies like the US Virgin Islands. The past few months have seen attacks against "offshore tax havens" which undermine collection of US taxes and other efforts from other high-tax countries. The OECD, a European think-tank which pays no tax, has come up with a list of countries which don't subscribe to their plan to regulate world finances. But while the US is happy to use the OECD as its highly paid tax-free international lobbyist, it is secretly promoting tax havens in its own back yard, actively soliciting the very same opaque "offshore funds" and money groups which started the crisis.

Some of the tax benefits for offshore funds looking to start up in the US Virgin Islands include: - 90% exemption on US income tax (results in a top federal tax rate of 3.5%!)

•           100% exemption on 4% gross receipts tax

•           100% exemption on 0.75% real property tax

•           100% exemption on 4.2% excise tax

•           100% exemption on 7% US Customs import duty

•           1% VI Customs Duties instead of 6%

The craziest thing about this whole set up is that, apparently..the US Virgin Islands is not considered a "tax haven" BECAUSE it is a US territory under US flag and protection..what does that mean? High-tax countries don't care about "international financial transparency" or any of that poppycock, they don't care about being fair, and the OECD is certainly not about "tax justice", it's about "tax piracy" and each man getting what he can.

 

Switzerland's finance minister has raised the possibility of bargaining in certain cases over Swiss bank secrecy.

"Certain matters of fact must be up for debate," said Hans-Rudolf Merz, who also holds the country's presidency.
"We will perhaps have to make concessions in some cases or others.'

Merz also suggested that Switzerland may have to make these concessions in order to avoid the threat of inclusion on an OECD or G20 blacklist that would see Switzerland branded as an un-cooperative tax haven.

French President Nicolas Sarkozy has already hinted that Switzerland would be blacklisted if the current situation continued.

Being put on a blacklist could mean economic sanctions against Switzerland or directives ordering banks in OECD/G20 countries to either not bank with Switzerland or apply much stricter regulations on funds of Swiss origin.

There is speculation over whether such 'concessions' would mean fundamental changes in Swiss offshore banking and bank secrecy, or merely the release of more UBS clients currently under investigation.

Calls for changes to the secrecy law have met with almost universal dissaproval domestically, with many Swiss unwilling to change centuries of tradition or risk harming the 'golden goose' that funds a huge banking sector.