Results tagged “tax haven”

Argentina signed an agreement with the Bahamas Thursday to share banking information as the country tries to tighten the noose on Argentines with cash hidden in overseas tax havens. Similar agreements were recently signed with Costa Rica, Andorra and Monaco. The deals are designed to stop tax evasion and fraud by exchanging tax information, lifting banking secrecy and allowing agents to conduct investigations overseas.

Continue reading: Argentina, Bahamas Sign Banking Information Agreement

Bermuda Signs Tax Agreement with Belgium

Bermuda has reached an agreement with Belgium to exchange information about criminal and civil tax matters. Benefits for the island from this tax information exchange agreement (TIEA) is a commitment by Belgium to conclude a series of mini double taxation agreements.

Continue reading: Bermuda Signs Tax Agreement with Belgium

The Genoese built a fortress on the site of present-day Monaco in 1215. The current ruling Grimaldi family secured control in the late 13th century, and a principality was established in 1338. Economic development was spurred in the late 19th century with a railroad linkup to France and the opening of a casino. Since then, the principality's mild climate, splendid scenery, and gambling facilities have made Monaco world famous as a tourist and recreation center.

Today, Prince Albert II exercises his sovereign authority over Monaco in accordance with the Constitution and laws of 1962. He represents the Principality in all foreign relations.

Monaco is not a member of the European Union but is very closely linked to it via a customs union with France, and as such its currency is the same as that of France: the euro. Before 2002, Monaco minted its own franc coins, the Monegasque franc. Monaco has acquired the right to mint euro coins with their own insignias on their national side.

Monaco levies no income tax on individuals. The absence of a personal income tax in the principality has attracted to it a considerable number of wealthy "tax refugee" residents from European countries who derive the majority of their income from activity outside Monaco; celebrities such as Formula One drivers attract most of the attention, but the vast majority of them are less well-known business people.

Currently around seventy banks operate in Monaco providing 300,000 bank accounts. Banks of Monaco provide bank account mostly to Monaco non-residents: around 85% of customers are non-residents and only 15% residents (50,000 local customers versus 250,000 foreigners). Total turnover of banking sector is above $1.5 billion. Despite the fact that large part of Monaco banking customers are physical persons, number of corporate clients also rises steadily.

A US Senate bill proposing intensified action against offshore centers is to be introduced within the next week, according to Senate aides.

Demands for further crackdowns against tax havens and tax avoidance schemes are expected in the bill, led by Senator Carl Levin, which builds on legislation introduced last year along with Barack Obama. The House of Representatives is to follow suit with similar measures.

Proposed action to be taken will include:

- Expanding tax reporting requirements for 'passive' foreign investment vehicles.
- The closing of a loophole that allows US citizens to avoid taxes on US stock dividends offshore
- The classification of US-controlled offshore corporations as domestic for tax purposes.
- Giving Federal prosecutors an easier ride by shifting the burden of proof over legality on to the owners or controllers of offshore structures.

"Offshore tax haven and tax shelter abuses are undermining the integrity of our tax system," said Levin in a statement (reuters). "We cannot tolerate $100 billion in offshore tax abuses burning a hole through our budget each year.

"We can fight back against secrecy jurisdictions and shut down offshore tax abuses if we have the political will."

Switzerland and the Cayman Islands are thought to be the ones on the receiving end of this latest assault. However the legislation is not likely to see a smooth passage through both houses, with many legislators in receipt of campaign funds from corporations with a vested interest in keeping loopholes open.

European Leaders have engaged in yet more sabre rattling over offshore banking, with a seven-point plan agreed in Berlin calling for ''sanctions'' against ''uncooperative jursidictions''.
At a meeting of G20 Nations the European representatives pledged to end tax havens by applying uniform rules to the worldwide financial markets.

French President Nicholas Sarkozy affirmed that he wanted to ''put a stop to tax havens''. Furthermore he unveiled plans for the next G20 summit in April to ''overhaul the system'', with sanctions to reign in non compliers.

It remains to be seen whether other nations in the G20 group including Brazil, India and China will be as enthusiastic as the Europeans in this latest crusade.

For some this latest bout of verbal swordplay is just a way of sidestepping the main issue at hand: mismanagement of the global financial crisis. Frederick Erixon, director of the European Centre for International Political Economy reckoned the antics were little more than finger pointing.

"They are pointing the finger at tax havens but the problems we're having in the financial system have very little to do with tax havens..They couldn't agree on something more substantial so they went for the easy targets: tax havens and hedge funds. It's all a smokescreen."

The British delegates must certainly have felt like fat kids caught with their finger in the pie since is former British colonies (and some still under direct control) which are hoarding the vast majority of offshore monies.

UK chancellor of the Exchequer Alistair Darling held hands with German Chancellor Angela Merkel in calling for the  Swiss government stop allowing foreigners to hide their wealth and avoid tax, yet made little mention of tax havens linked to the British.

"If it wants to be part of the international community, it's got to be open," Darling was quoted as saying.

With each government going for its own slice of the pie and personal 'most wanted' list, it may be hard for a group with such disperse motives to reach a meaningful agreement any time soon.

The following Q&A is from the Jacobs Report with permission from Vernon K. Jacobs

QUESTION: Hello, how do I disclose an offshore account to the us government? I know
you are probably very busy but I was hoping you could give me a couple pointers.
Any help appreciated. Thank you so much. Warmest Regards,

REPLY: The first step is to get a copy of the form and instructions at
http://www.irs.gov/pub/irs-access/f90221_accessible.pdf
The IRS provides answers to a number of questions at
http://www.irs.gov/businesses/small/article/0,,id=148845,00.html

This form was modified as of Dec. 31, 2008 and includes a little bit of additional information from the previous form.

The instructions explain that the form is not required if the total value of all foreign financial accounts combined is $10,000 or less during the prior calendar year. Additional exceptions are described in the instructions to the form.

A more detailed discussion of the various exceptions is available for $16 at
http://www.rpifs.com/fbar.htm.

You can also find my response to dozens of questions about this form at this Yahoo Group. Click on "Messages" and then use the search tool.

Vern

As required by U.S. Treasury Regulations governing tax practitioners, any written tax
advice contained herein cannot be used by any taxpayer for the purpose of avoiding
certain tax penalties that may be imposed under the Internal Revenue Code. For further
details see http://www.offshorepress.com/vkjcpa/disclosurerules.htm

Swiss banking secrecy has come under fire recently because of the media focus on UBS, Credit Suisse and their US clients. With the volume of news dedicated to the subject you could be forgiven for thinking that bank secrecy in Switzerland is a thing of the past, that Switzerland has handed over the keys to the castle, defeated.

Most media would like to suggest that some great development has occurred and their output reflects this, but if you take a second look you will find that relatively little has actually happened.

The IRS has been campaigning since last July to prize open details of US account holders at UBS and what has it got to show for it? Out of a suspected 52,000, just 12 names have been promised them. Even these 12 aren't for sure, because they still have the right to appeal the decision under Swiss law.

Of course its in the interest of the US government to keep this issue in the news because it gets people scared about using offshore accounts, and may even result in some UBS account holders handing themselves over . Tax Lawyers too have a field day letting it be known that they are the only solution for these luckless UBS types. Bu is it not just a case of smoke and mirrors concealing the fact that, despite everything, Swiss bank secrecy hasn't changed, and violation of the law still carries a prison sentence?

UBS and Credit Suisse have made themselves targets by opening offices in the US and therefore making themselves subject to US law. The Swiss Federal Council simply
acknowledged that when it agreed to allow the US Customer information to be
given to the IRS. For those banks without a US presence there has been no operational change - Switzerland will still put people in jail for violating bank secrecy.

In fact private banks and trust companies have been reminded by authorities that they will be prosecuted if they violate the Secrecy Act.

It is no more in Switzerland's interest to start unraveling client confidentiality than it is in the interests of those American UBS clients to have their personal details revealed. Although it may have to walk a fine line in order to keep the US from swallowing it whole, bank secrecy remains intact and there are no plans to change it.

The Isle of Man Government and the private sector have worked very hard to ensure that the island has a world class infrastructure and full range of Support Services in place for the e-gaming industry. Recently a new survey of leading e-Gaming companies in the Isle of Man has estimated its online gaming sector grew by 30% in 2008, and has forecast growth to accelerate to 40% in 2009.

There are 14 license holders at the moment. Eight new licenses were issued in 2008 with two more to go live shortly and this past week Asian bookmaker SBOBet's subsidiary Celton Manx has become the first Isle of Man-licensed operator to be granted approval to launch a live dealer casino from the island.

With a bewildering number of offshore jurisdictions out there, how do you find one that can suit a broad range of investment objectives?

What sets the Seychelles apart from the others?

A remote group of Paradise Islands somewhere in the Indian Ocean, at first glance the Seychelles don't appear to break any tax haven stereotypes. Yet with the global economic climate changing, and tax and privacy issues with it, that tax haven stereotype is itself in motion.

Seychelles has the smallest population of any state in Africa, however they hold the distinction of being, per capita, the most highly indebted country in the world according to the World Bank, with total public debt around 122.8% of GDP and ironically Seychelles remains the richest territory in Africa in terms of GDP per capita.

The Seychelles is a totally independent state generating its own income. Because of economic contraction (the economy declined by about 2% in 2004 and 2005 and lost another 1.4% in 2006 according to the IMF) the country was moving downwards in terms of per capita income; however, the economy came roaring back in 2007 growing by 5.3% due in part to the record tourism numbers, but also the booming building and offshore industries which also continue to set records.

At a hearing held on 3rd May entitled 'Offshore Tax Evasion; Stashing Cash Overseas' the United States Senate Finance Committee considered how it could overcome the problem of US taxpayers evading local tax by placing their assets 'offshore'. Information exchange was seen as one of the solutions suggested that could help the US treasury close that 'tax gap'.

In the course of the hearing, testimony submitted made particular reference to the use of 'tax havens'. As Guernsey has been included in a list of 'offshore secrecy jurisdictions' and as a 'tax haven country' in bills currently being promoted before the US Senate, it was considered important that the Committee should be made fully aware of Guernsey's status as a well-regulated, well-respected financial centre, and of the considerable steps it has taken, and continues to take, in cooperating in the fight against international financial crime.