Bulletin 6

Printable Version

EU: Union Includes U.S. on List of Potential Tax Haven –

The European Commission views the United States as a potential tax haven, according to a draft list of 90 countries that Brussels views as problematic, reports Handelsblatt Global. Countries on the list, obtained by Handelsblatt, are categorized based on three risk factors – transparency of the tax system, tax advantages for corporations and a zero-percent income tax. Brussels views the United States as fulfilling the first two risk factors, putting Washington in the same category as Brazil, Panama, Singapore and Malaysia. The E.U. council of finance ministers plans to write the 90 countries on the list this week to start a dialogue about tax policy. That letter will go to the Trump administration as well. The council plans to decide on a finalized list by the end of the year.

EU: Data Protection Supervisor says 4AMLD amends are not ‘proportionate’ –

On 2 February 2017, the European Data Protection Supervisor (EDPS) published Opinion 1/2017 on the proposal to amend EU Directive 2015/849 (the Fourth EU Anti-Money Laundering Directive, 4AMLD). The opinion raises questions as to whether or not the invasive collection of personal data is proportionate to the fight against money laundering and terrorism financing. It also scrutinises the proposal of access to beneficial ownership information by competent authorities, and the significant and unnecessary risks that this might cause an individual who has a right to privacy and data protection.

EUROPEAN UNION: Ninety-two countries in ‘preliminary screening’ list of non-cooperative jurisdictions –

Governments of 92 jurisdictions worldwide last week received letters to the effect that they are on the preliminary screening list for the European Union’s list of non-cooperative jurisdictions. The letter and list of recipients have not been made public. The list itself will be finalised by September 2017, using criteria set by European finance ministers in November 2016.

IRELAND: Government ignores Commission’s ruling on Apple tax –

Ireland has failed to meet the deadline set by the European Commission for collecting EUR13 billion in tax benefits that it is owed by Apple, according to the Commission’s head of taxation policy Margrethe Vestager. In August 2016, the Commission ruled that Ireland had granted Apple an unlawful competitive advantage by waiving corporation tax on its profits. Both Apple and the Irish government are appealing the decision, but have agreed to put the money in escrow until the appeals are heard.

US: British Foreign Minister renounces US citizenship –

It has emerged that British Secretary of State for Foreign Affairs, Boris Johnson, who was born in New York, gave up his US citizenship in 2016. Johnson, who has not lived in the US since childhood, was forced to pay US capital gains tax on the disposal of his London home in 2015.

BENEFICIAL OWNERSHIP: UK Members of Parliament seek to establish public ownership registers for overseas territories –

According to the UK’s Guardian newspaper, a group of 88 Members of the UK Parliament have tabled an amendment to the Criminal Finances Bill 2017 that would require British overseas territories to make their company ownership registers public by 2020. The bill is due to receive royal assent in spring 2016, and its provisions will come into effect later in the year, including a new corporate criminal offence of failing to prevent the facilitation of tax evasion, with extraterritorial effect.

SWITZERLAND: Voters reject corporate tax cuts –

The Swiss government’s plans to reform the corporation tax system have been rejected in a public referendum. The reforms aimed to introduce new measures to maintain Switzerland as an attractive location, despite the abolition of existing preferential tax rates for multinationals. The abolition of preferential tax rates will still be required to proceed, however, in order to comply with international pressure against profit shifting.

PANAMA: Mossack Fonseca founders arrested and denied bail –

Ramón Fonseca and Jürgen Mossack, founders of law firm Mossack Fonseca, were reportedly arrested last week in connection with Brazil’s Lava Jato investigation and, according to the UK newspaper the Guardian, denied bail. Both men denied any wrongdoing.

US: Tax reform delayed until later this year –

Tax reform legislation will be included in Congress’s ‘must pass’ fiscal 2018 budget resolution later this year, rather than in the earlier fiscal 2017 resolution, said Paul Ryan, speaker of the House of Representatives last Friday (10 February). The Affordable Care Act repeal legislation will be included in the earlier fiscal 2017 budget resolution, he added.

AUSTRALIA: Consultation on central register of company beneficial ownership –

Australia’s government has opened a public consultation seeking views on the details, scope and implementation of a register of the beneficial ownership and control of companies. The consultation document asks for suggestions on: how information should be collected, stored and kept up to date; how to define a beneficial owner with a controlling interest in a company, and those exercising indirect control or ownership; and the expected compliance costs for affected parties. The closing date for submissions is 13 March 2017.

ISRAEL: Deutsche Bank Chief Executive detained on suspicion of tax offences –

The offices of Deutsche Bank’s Israel operation were searched last week and its Chief Executive, Boaz Aharon Schwarz , was detained on suspicion of ‘committing value added tax (VAT) offences, including unlawful reporting of transactions to the amount of over 550 million ILS’. He was later granted bail. The Israel Tax Authority alleges that the bank reported transactions as zero-rated services to foreign residents only, although they also provided service to Israeli residents in Israel that were subject to VAT at the full rate.

IRELAND: Finance Minister Michael Noonan hammers EU tax plan for hurting ‘consensus’ –

Finance Minister Michael Noonan has stepped up the Government’s campaign against Brussels’ plan for a new common corporate tax regime saying the proposal will endanger the international “consensus” on ways to tax multinationals, reports Irish Examiner. Mr Noonan said the Commission’s plan for a common consolidated corporate tax base would insist on public reporting of tax on a country basis which countries outside the EU oppose. He said Ireland had signed up to and supported the initiative called BEPS — base erosion and profit sharing — driven by the Organisation for Economic Co-operation and Development (OECD). The EU plan could stall the implementation of the OECD initiative around the world, Mr Noonan said. Current proposals would reveal where multinationals are paying tax.

Sources: STEP | IFC Review

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