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EU-SWISS DEADLOCK ON TAX INFORMATION EXCHANGE
After a week of EU fulmination, the Swiss stand firm in support of traditional bank secrecy. Is a face saving compromise possible?More on this story here, here, and here.
US experts slam EU for intemperate, unjust attacks on Swiss.More on this story here.
U.K. NON-DOMICILE TAX LOOPHOLE STILL ALIVE
LONDON: Wealthy foreigners living in the UK still remain tax free.More on this story here.
Auditors investigate UK offshore tax haven sale; Labour government denounces tax haven use; uses it for £2b Inland Revenue property deal.More on this story here.
Financial Times survey gives JERSEY offshore services high marks.More on this story here.
Guide to GUERNSEY offshore services published.Guide here.
IRISH TAX COLLECTORS TARGET 30,000 PEOPLE
IRISH Revenue finds 13,500 allegedly bogus offshore bank accounts.More on this story here.
FINANCIAL ACTION TASK FORCE REVISES BLACKLIST
Russia, Marshall Island, Nuie, Dominica removed from list. Cook Islands, Egypt, Grenada, Guatemala, Indonesia, Myanmar, Nauru, Nigeria, Philippines, St. Vincent and the Grenadines, and Ukraine remain on list. The FATF also announces that the IMF, World Bank and the FATF have developed a common methodology to assess a country’s compliance with the FATF Recommendations.More on this story here and here.
Nieu, Marshall Islands removed from blacklist.More on this story here.
KPMG DROPS VANUATU GROUP
Accounting firm nervous over link to Pacific island.More on this story here (scroll down).
HONG KONG LIBERTIES LOST UNDER COMMUNIST RULE
And local opposition seems muted to new curbs on freedoms.More on this story here.
OFFSHORE INSTITUTE MEETS IN LABUAN
A first for Pacific area offshore financial center.More on this story here.
OECS ministers discuss area economic strategies.More on this story here.
GUATEMALA, DOMINICAN REPUBLIC corruption warning.More on this story here.
PUERTO RICAN corporate tax break confusion in US Congress.More on this story here.
AMERICAN “TAXPATRIATES” LIST
IRS publishes names of ex-US persons who renounce citizenship.More on this story here.
GOVERNMENT SHARE OF GDP GROWS
But last year may have seen a rare pull-back in the trend, as the average tax-to-GDP ratio for the 25 OECD countries where 2001 figures are available fell 0.1% last year to 37.3%. Within the OECD, government shares of GDP ranged from 27.1% in Japan to nearly 60% for some EU member states. Part of the explanation for the turnaorund, says the OECD, may lay in the economic cycle.More on this story here and here.
THE INCOME TAX IS EVIL
Frank Chodorov’s classic 1954 essay on the consequences of the income tax - with an impassioned appeal for the repeal of the Sixteen Amendment. A weak government is the corollary of a strong people. Once the federal government started taxing incomes the citizenry’s money was now taken from them not by their local representatives, over whom they had some control, but by the representatives of the other 47 (now 49) states. They became subject to the will of the central government. The state governments found their source of revenue being dried up by federal preemption, so that they had less and less for the social services a government should provide, and they were compelled in their extremity to apply to the central authorities for help. In so doing they necessarily gave up some of their independence. The economic power which the federal government secured enabled it to bribe the state governments, as well as the citizens, into submission to its will. In that way, the whole spirit of the Union and of its Constitution has been liquidatedComplete essay here.
US-CANADA INCOME GAP SUGGESTS UNION
OTTAWA: Closer ties, fewer barriers could equalize income.More on this story here.
LEADING CANADIAN LAWYER ON TRIAL
MONTREAL: International stock fraud; London, Bermuda, Liberia.More on this story here.
BRITISH STAND BY POUND STERLING
LONDON: No switch to the euro seen anytime soon.More on this story here.
U.S. REP. RON PAUL SPEAKS FRANKLY (AS IS HIS WONT) ABOUT WAR
“Saddam’s military is very, very weak and much weaker than it was when he was defeated twelve years ago. And, that sorta goes by everybody and they keep talking about presumptions: maybe someday he’s going to get something and maybe someday he’s going do this and he might build a weapon and he’s trying to get these things ...” Institutionalizing pre-emptive strikes may have profound reverberations in, e.g., China-Taiwan and India-Pakistan. The non-debate debate.
Rest of transcript of appearance on Bill Moyers’s PBS show “NOW” here.
BELGIUM PLANS DIGITAL I.D. CARDS FOR CITIZENS
BRUSSELS: A radical change in citizen-government relationship.More on this story here.
NOT EXACTLY A FLOOD, BUT PEOPLE ARE RENOUNCING THEIR U.S. CITIZENSHIP
Renouncing U.S. citizenship becomes harder than ever. Today expatriates are a lot less respectable than they were in 1776, when the signers of the Declaration of Independence made known their intention to expatriate from Britain. The IRS thinks they are trying to skip out on their taxes. The INS might deny them reentry to the country. And a list of their names has started showing up every quarter in the Federal Register, thanks to retired congressman Sam Gibbons, who in 1995 sponsored a bill to publicly identify Americans who commit what he called “the despicable act of renouncing their allegiance to the United States”.Full article here. (1998 article)
Forbes discusses loopholes to some of the harsh laws designed to penalize tax-motivated expatriations. Formally rebutting the presumption of tax motivation may be sufficient in and of itself.More on this story here. (1999 followup to a 1994 article)
The U.S., unlike almost every other country, levies income and estate taxes on its citizens living abroad. So just moving abroad will not accomplish anything. Expatriation is the ultimate tax avoidance plan. Legendary mutual fund operator John Templeton moved to Nassau in 1969 and gave up his U.S. citizenship. Now he is a British subject, living in the Bahamas, where he pays no income or estate tax. Former citizens can still be taxed on U.S. source income. This exit tax may apply for ten years after you leave, unless the IRS decides that tax avoidance was not one of the “principal purposes” of your departure. If you decide to make the move, have your path well laid out first.More on this story here. (1994 article)
CARIBBEAN NATIONS STRUGGLE FOR FREE TRADE
Some are tax havens with major offshore financial clout.More on this story here and here.
OFFSHORE INSURERS FACE INVESTMENT DROP
Insurers in offshore centers, ISLE of MAN and BERMUDA, warn of poor investment returns due to world economy.More on this story here and here.
BANK OF BAHAMAS OPENS U.S. BRANCH
New facility for Bahamians to be based in Miami.More on this story here.
LABUAN SEEKS ARAB INVESTORS LEAVING U.S.
KUALA LANGAT: Malaysia. New US financial regulations driving Arab investors to other tax-free offshore havens.More on this story here.
NEW ZEALAND TAX COLLECTORS TARGET WEALTHY
AUCKLAND: NZ Revenue aims at big business, high net worth folks.More on this story here.
EUROPEAN UNION EXPANDS
BRUSSELS: 10 new member nations slated for EU membership.More on this story here and here.
GERMAN LEFT IMPOSES NEW HIGH TAXES
BERLIN: Social Democrats & Greens join to milk the taxpayer.More on this story here.
I.R.S. MAY HIRE DEADBEAT COLLECTION AGENCIES
WASHINGTON: The IRS is considering the use of private collection agencies to help it track down billions of dollars in delinquent taxes. “The collection of this nation’s revenue needs is an inherent government function,” says Montana senator.More on this story here.
IRS: BEWARE OF ABUSIVE TRUSTS
WASHINGTON: The IRS warns against abusive foreign and domestic trust schemes. They characterize such as typically involving the creation of one or more trusts into which the taxpayer transfers his or her personal and/or business assets and to which the taxpayer assigns his or her income. The taxpayer will then be assigned as trustee, or in reality will control the activities of the trust.More on this story here.
FINANCIAL CORRUPTION WIDESPREAD
New laws, treaties fail to curb financial, business corruption.More on this story here. (Registration required.)
BIG BROTHER I.D.’s ARE COMING SOON
The Transportation Security Administration’s “Trusted Traveler” program will allow holders to skip long airline security screening lines if they agree to a highly intrusive and thorough probe by the FBI into their background and finances. Strictly voluntary, at first anyway. Any card would have to have some kind of biometric component - voice ID, fingerprint, etc. (Of course, these IDs can never be lost, stolen, reproduced ... and the scanners can never make a mistake, be fooled ...) The cards could be electronically deactivated at the whim of a bureaucrat. Owe the IRS? No more travel.
In another scheme, the American Association of Motor Vehicle Administrators (AAMVA) wants mandates to require state DMVs to phase in nationally standardized identity cards, designed to become the core of a federal monitoring/approval system for travel, employment, financial activity, hunting/fishing licences and health care.More on this story here.
SECRET UK GOVERNMENT PROJECT USES MOBILE PHONE MASTS TO SPY
Receivers attached to mobile phone masts will combine with phone signals to function in a radar-like capacity. When used alongside technology which allows individuals to be identified by their mobile phone handsets, individuals can be located and their movements watched in real time from a remote location.More on this story here.
Cato Institute: The federal income tax and its enforcement harm civil liberties much more than is necessary to raise needed funds for the government. Ten areas of abuse are itemized, including denial of due process, unreasonable searches and seizures, denial of trial by jury (in tax court), and forced self-incrimination.Full article here.
Under Treasury Department proposed regulations, individual and corporate taxpayers would have to disclose on their tax forms any tax scheme that falls under six categories, including transactions marketed by accountants under conditions of confidentiality, transactions in which the accountant guarantees a promised tax reduction, and transactions that allow a corporation to show its shareholders at least $10 million more in profits than it would show the IRS. “The Treasury will keep trying to write a better rule, and the accounting industry “will keep trying to find a better escape,” said a tax lawyer.More on this story here.
Tough Rules for Tax Shelters.More on this story here.
The IRS is seeking to force at least 70 companies, including Walt Disney, Hilton Hotels and the Florida Marlins, to turn over customer records as part of an expanded probe into credit-card holders who use offshore bank accounts to evade taxes. “Our goal is simple and straightforward - identify the people who may be using these offshore cards to evade paying their taxes,” said IRS Commissioner Charles Rossotti. The IRS chose the merchants because they are likely to collect the information it needs, such as names and addresses of offshore cardholders. The General Accounting Office estimates that offshore accounts are used by one million to two million U.S. taxpayers.More on this story here.
ANTI-OFFSHORE BILL DROPPED IN U.S. CONGRESS
WASHINGTON: As lawmakers leave town for election campaigns, a bill punishing US companies that reincoporate offshore is dropped.More on this story here.
Notwithstanding US company controversy, BERMUDA is doing OK.More on this story here.
REPORT CLAIMS OFFSHORE BANKS USED BY TERRORISTS
NEW YORK: CFR report claims Liechtenstein, Bahamas used for terror cash by Saudis; no proof offered. US government attacks report.More on this story here and here.
BRITISH TORY URGES ANTI-OECD STANCE BY U.K. Territories
LONDON: British Overseas Territories told to sue OECD for tax attacks.More on this story here.
GIBRALTAR TAX REFORMS QUESTIONED BY E.U.
Lower corporate tax at issue. SPAIN uses issue to assert claims.More on this story here and here.
OFFSHORE TAX HAVENS FEEL HEAT
The enactment of the USA Patriot Act - described as the “single greatest piece of financial law reform in the US since the 1930s” by an Asian executive - and a worldwide focus on money laundering has put the spotlight on offshore financial centers and caused them to change their rules and become more transparent. The days when OFCs offered impenetrable secrecy and non-cooperation with other jurisdictions are over. The Enron debacle - Enron had 692 subsidiaries in the Cayman Islands - did not help the perception that OFCs were abetting fraud. The FATF “Blacklist” has goaded some OFCs into action.Report here.
MONACO HSBC BANKER STEALS $14 MILLION
Tax haven shocked at HSBC theft; banker faces prison.More on this story here.
BAHAMAS banking says it has clean up its act.More on this story here.
DANISH SENIORS FLEE SOUTH FOR TAX BREAKS
COPENHAGEN: Older Danes head for southern Europe, lower taxes.More on this story here.
U.K. TAX COLLECTORS TARGET OFFSHORE INVESTORS
Presumption of tax evasion if Brits dare to invest offshore.More on this story here.
Labour plans to name and shame money laundering firms.More on this story here.
BORIS BECKER’S ON/OFF TAX SETTLEMENT
MONACO residency claiming tennis star may or may not have settled with GERMANY for US$2.3m in back taxes, plus penalty.More on this story here and here.
IRAN PROFITS FROM U.S. TERROR CRACKDOWN
For the first time since the 1979 Islamic revolution, Iran has experienced a net inflow of capital and gold bullion, drawn by domestic investment opportunities, fuelled in part by high oil prices, and driven by fears of collapsing stock markets and private assets being frozen by a US government that has branded Iran as part of an “axis of evil”.More on this story here.
EU, NORTH AMERICA EXPATS’ FAVORITE PLACES
The EU presents the least amount of “hardship” for expatriates, followed closely by North America, according to a recent report. Topping the list of best places to live for expatriates were Melbourne, Australia, and Vancouver, Canada, followed by Perth, Vienna, Toronto, Geneva and Zurich. The worst: Port Moresby (Papua New Guinea), Lagos and Karachi (Pakistan). London on par with Hong Kong, San Francisco, Lisbon and Madrid.Report here.
OBNR WARNS OF OFFSHORE “ASSET RECOVERY” SCAM
Offshore Alert describes Hong Kong based advance fee fraud.More on this story here.
US TERROR LAWS PUT CIVIL LIBERTIES AT RISK
Civil liberties experts say Americans may not be feeling it now, but new laws written in the wake of last year’s terror attacks can be abused by less than scrupulous authorities seeking to target non-terror suspects. “Real life victims” include a college student who claims she was questioned by federal agents for carrying a poster critical of Bush’s policies. Of particular concern are “black bag searches”, authority given to police to search a residence when no one is home and without the knowledge of the homeowner. That power was granted under the Patriot Act for regular criminal cases beyond terrorism. Justice department largely dismisses the concerns and complaints.More on this story here.
Alleging the federal government is barring peace activists from boarding airplanes, the American Civil Liberties Union is launching a multimillion-dollar advertising blitz to battle what it calls “serious attacks” on constitutional rights by the Bush administration.More on this story here.
HUGH BUSINESS COSTS IMPOSED BY USA PATRIOT ACT
Financial planning firms will have to spend between $50,000 and $100,000 to comply with the government’s new anti-money laundering rules in their first year, according to a new report. The costs will include paying existing personnel extra hours to do the work, obtaining specialized software, and training. Small planning firms’ responsibilities boil down to a few steps, as detailed within.More on this story here.
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