Paradise Papers (& Panama Papers)

mamba80

Stevo 666 wrote:

briantrumpet wrote:

I didn't find a direct critique of the IEA report, but an academic takes on tax havens here:

http://www.taxresearch.org.uk/Blog/2017 ... ax-havens/

Free markets, if they were to exist are dependent upon everyone having equal access to capital, the market and information. Unless that happens economic theory is quite explicit about the fact that, first of all, free markets do not exist and, second, abuse of markets is taking place. And let me be clear: tax havens exist to make sure that there is unequal access to capital because the rich hide theirs away from view in these places.

Tax Research.org is run by the famously unbiased Richard Murphy:
https://en.m.wikipedia.org/wiki/Richard_Murphy_(tax_campaigner)
Tax 'campaigner' and a founder of Corbynomics.

Which part of the article specifically do you disagree with or think are factually wrong? lol!

rjsterry

Stevo 666 wrote:

Pinno wrote:

Stevo 666 wrote:

Pinno wrote:

Stevo 666 wrote:

Pinno wrote:

This...detect."

The... it.

Now your turn as Rick has dodged the question. Define a tax haven.

I did in a previous post.

Do you think that tax havens serve a useful service in terms of aiding commerce for the greater good? Not for the prosperity of individual companies but the prosperity of the people at the bottom of the heap; the consumer.

That isnt what they are there for, just like a lot of other things. But in terms of improving the living standards of the people who live in many of these places, I dare say it is pretty effective. And that's the job of governments of not just tax havens but any country.

You didn't answer the question. My suggestion was that if tax havens are used to divert potential revenues of Nation States, then what benefit do they have. Not within the countries which operate as a tax haven.
So, on that basis what benefit do they have in terms of increasing revenue for Nation States and what benefit do they serve the average me, Joe Bloggs?

Again, i'm not talking about the private accounts of individuals, I am talking about large corporations using them to reduce their tax burden (legitimately or not).

As mentioned to Rick, one nations loss is another nations gain.

See my comments above on tax competition, which most countries do. Countries compete for investment and tax revenue whether you like it or not (this is a part of my job and I see it happening). Just some dont like the tactics of others and try to take their ball home, so to say. They need to be more competitive is the short answer.

If you live in a country that has competes for and won investment and generated revenues and jobs, then it benefits you. Especially if you get a job because of it

Unfortunately your last effort didn't work. 'Somewhere you can out money and get taxed less' would make an IS A a tax haven

Well it is, albeit a small one. There's an argument that ratcheting up of the upper limit on investment per year has already changed them from an encouragement to save to a bit of a giveaway to higher earners. Unless you live like a monk, you need to be earning quite a lot to have a spare £20K a year lying around. As you say, all completely legal and even promoted by the government, but it seems to have outgrown the original intention of encouraging saving.

pblakeney

rjsterry wrote:

Well it is, albeit a small one. There's an argument that ratcheting up of the upper limit on investment per year has already changed them from an encouragement to save to a bit of a giveaway to higher earners. Unless you live like a monk, you need to be earning quite a lot to have a spare £20K a year lying around. As you say, all completely legal and even promoted by the government, but it seems to have outgrown the original intention of encouraging saving.

A very small one, and a bad example. There is not much incentive in saving even 40% of less than 2% return. £160 on a £20,000 investment?

rjsterry

PBlakeney wrote:

rjsterry wrote:

Well it is, albeit a small one. There's an argument that ratcheting up of the upper limit on investment per year has already changed them from an encouragement to save to a bit of a giveaway to higher earners. Unless you live like a monk, you need to be earning quite a lot to have a spare £20K a year lying around. As you say, all completely legal and even promoted by the government, but it seems to have outgrown the original intention of encouraging saving.

A very small one, and a bad example. There is not much incentive in saving even 40% of less than 2% return. £160 on a £20,000 investment?

Cash ISAs are little more than another savings account but stocks and shares ISAs will get you a lot more than 2%

pblakeney

rjsterry wrote:

PBlakeney wrote:

rjsterry wrote:

Well it is, albeit a small one. There's an argument that ratcheting up of the upper limit on investment per year has already changed them from an encouragement to save to a bit of a giveaway to higher earners. Unless you live like a monk, you need to be earning quite a lot to have a spare £20K a year lying around. As you say, all completely legal and even promoted by the government, but it seems to have outgrown the original intention of encouraging saving.

A very small one, and a bad example. There is not much incentive in saving even 40% of less than 2% return. £160 on a £20,000 investment?

Cash ISAs are little more than another savings account but stocks and shares ISAs will get you a lot more than 2%

True. But then there are charges which hit that. You have to lucky and/or wise.

pinno

Soz fellas but an ISA that pays more than 2% is a rare thing.
You get more return from buying a private number plate.

https://top-isa-rates.co.uk/v5?gclid=Cj ... I0QAvD_BwE

rjsterry

Pinno wrote:

Soz fellas but an ISA that pays more than 2% is a rare thing.
You get more return from buying a private number plate.

https://top-isa-rates.co.uk/v5?gclid=Cj ... I0QAvD_BwE

Those are all fixed rates, of course they are low. You won't find published rates on stocks and shares ISAs because the return is dependent on the stock market.

Stevo_666

briantrumpet wrote:

Stevo 666 wrote:

See my comments above on tax competition, which most countries do. Countries compete for investment and tax revenue whether you like it or not (this is a part of my job and I see it happening). Just some dont like the tactics of others and try to take their ball home, so to say. They need to be more competitive is the short answer.

If you live in a country that has competes for and won investment and generated revenues and jobs, then it benefits you. Especially if you get a job because of it

I know we've had this discussion before, but what you call being "more competitive" others would call a "race to the bottom", being driven by businesses that answer to shareholders, and people who hide enormous wealth from scrutiny, rather than being decided by democratic means.

A race to the bottom in what sense? I mentioned above that lowering rates often increases the tax take (and raising it often does not) - having given specific examples. In which case so what?

And a bit of news, it is already happening - you only have to look at corporate tax rates over time for a large number of countries.
https://files.taxfoundation.org/legacy/docs/TaxFoundation_FF483.pdf

Stevo_666

TheBigBean wrote:

Stevo 666 wrote:

TheBigBean wrote:

The author of the IEA piece seems to have forgotten to mention that a UK based fund wouldn't be taxed on the dividends it receives, so the additional tax would be much lower. He also seems to have forgotten to mention the plethora of other fund types.

Still it is good to know that Hamilton's circular VAT avoiding lease structure was all in the name of market efficiency.

A UK fund would be taxed on most other forms of income however.

Ok, so let's look at another form of income - interest. What happens to UK tax receipts as a result of offshore funds holding debt? They go down. That's convenient - how many funds in Luxembourg, created for market efficiency of course, hold shareholder debt in the UK? Thousands. This is the single biggest reason to create a Lux fund. Ignored by the author.

Finally, look at capital gains. Sure, the offshore fund is better than an onshore fund, but the most tax advantageous structure is likely to be for investors to hold the shares directly themselves. The author suggests that if this was the case, that is what they would all do.

That might be the simple short term answer.

As I mentioned above, when the domestic investor realises their profit in the fund, then it comes into the UK tax net. Or sooner if the UK CFC (anti-tax haven) rules bite.

Also part of why you invest in a fund is to let professionals manage these things for you if you think they can do better. Are you really saying that UK investors should only be able to invest in UK based funds?

Stevo_666

mamba80 wrote:

Stevo 666 wrote:

briantrumpet wrote:

I didn't find a direct critique of the IEA report, but an academic takes on tax havens here:

http://www.taxresearch.org.uk/Blog/2017 ... ax-havens/

Free markets, if they were to exist are dependent upon everyone having equal access to capital, the market and information. Unless that happens economic theory is quite explicit about the fact that, first of all, free markets do not exist and, second, abuse of markets is taking place. And let me be clear: tax havens exist to make sure that there is unequal access to capital because the rich hide theirs away from view in these places.

Tax Research.org is run by the famously unbiased Richard Murphy:
https://en.m.wikipedia.org/wiki/Richard_Murphy_(tax_campaigner)
Tax 'campaigner' and a founder of Corbynomics.

Which part of the article specifically do you disagree with or think are factually wrong? lol!

For a start he makes sweeping statements about tax havens wihout justifying them, e.g.
And let me be clear: tax havens exist to make sure that there is unequal access to capital because the rich hide theirs away from view in these places.

And tax havens also exist to make sure competitors do not get access to markets, especially through the use of intellectual property rights which are so widely owned and controlled from thse places with the sole aim of suppressing fair competition.

And third, tax havens exist to ensure that markets do not have the information they need. We call them secrecy jurisdictions for a reason: it’s precisely because they exist to foil free markets.

I could go on...

Stevo_666

Pinno wrote:

Pinno wrote:

Stevo 666 wrote:

Pinno wrote:

Okay...burden?

Question for you - how do you define what is and what is not a tax haven?

What it says on the tin surely? (without looking it up)
A haven: place where people can place money in an account provided by an organisation within the boundaries of that geographical location which is more favourable in terms of taxable monies (?)
Perhaps even, registration of a yacht or say a business for the same purpose.

Exactly.

With all due respect that's a crap definition of a tax haven.

Matthewfalle

well, to be fair to Pinno, it's no worse than a lot of the bilge Rick and and Goo have posted on here. Oh, and that bloke who wants to declare war on Jersey and Guernsey - now that was a good one.

Let me have a quick review of the past couple of pages and I'll come back and learn you all about stuff 'n' tings.

TheBigBean

Stevo 666 wrote:

TheBigBean wrote:

Stevo 666 wrote:

TheBigBean wrote:

The author of the IEA piece seems to have forgotten to mention that a UK based fund wouldn't be taxed on the dividends it receives, so the additional tax would be much lower. He also seems to have forgotten to mention the plethora of other fund types.

Still it is good to know that Hamilton's circular VAT avoiding lease structure was all in the name of market efficiency.

A UK fund would be taxed on most other forms of income however.

Ok, so let's look at another form of income - interest. What happens to UK tax receipts as a result of offshore funds holding debt? They go down. That's convenient - how many funds in Luxembourg, created for market efficiency of course, hold shareholder debt in the UK? Thousands. This is the single biggest reason to create a Lux fund. Ignored by the author.

Finally, look at capital gains. Sure, the offshore fund is better than an onshore fund, but the most tax advantageous structure is likely to be for investors to hold the shares directly themselves. The author suggests that if this was the case, that is what they would all do.

That might be the simple short term answer.

As I mentioned above, when the domestic investor realises their profit in the fund, then it comes into the UK tax net. Or sooner if the UK CFC (anti-tax haven) rules bite.

Also part of why you invest in a fund is to let professionals manage these things for you if you think they can do better. Are you really saying that UK investors should only be able to invest in UK based funds?

People can invest where they like, but equally people can complain about the tax implications of them doing so. I'm pointing out that the posted article missed out a lot of things, and therefore was not a coherent piece on the subject.

surrey_commuter

Rick Chasey wrote:

I mean, take one example i'm very familiar with; Trafigura, having been caught dumping toxic waste off the west coast of Africa, with their owner being put under house arrest, decided to move their office from London to Geneva to avoid the scrutiny.

There's another trader (who shall remain nameless, lest I fall foul of their lawyers), who has all their traders in a big financial hub. They are all the trading decision makers, etc. But they decide to name them as brokers, and have a bunch of graduate execution monkeys in a tax haven who actually punch in the trades and book them who are officially the 'traders' specifically for tax reasons.

Now, what's the value add there?

Lack of transparency and tax havens go hand-in-hand.

Exactly the same with Facebook/Google/LinkedIn - booking sales to Ireland. Ironically if HMRC had access to LinkedIn they could prove The fraudulence of this argument

rick_chasey

Well my colleagues at the time placed one of their traders and when he sent out the announcement they gave us a heavy smack down because we didn’t refer to them as brokers.

hopkinb

Surrey Commuter wrote:

Rick Chasey wrote:

I mean, take one example i'm very familiar with; Trafigura, having been caught dumping toxic waste off the west coast of Africa, with their owner being put under house arrest, decided to move their office from London to Geneva to avoid the scrutiny.

There's another trader (who shall remain nameless, lest I fall foul of their lawyers), who has all their traders in a big financial hub. They are all the trading decision makers, etc. But they decide to name them as brokers, and have a bunch of graduate execution monkeys in a tax haven who actually punch in the trades and book them who are officially the 'traders' specifically for tax reasons.

Now, what's the value add there?

Lack of transparency and tax havens go hand-in-hand.

Exactly the same with Facebook/Google/LinkedIn - booking sales to Ireland. Ironically if HMRC had access to LinkedIn they could prove The fraudulence of this argument

HMRC aren't resourced well enough, having suffered pretty radical cuts in staff and budget since 2010. I suspect that even were HMRC aware of such egregious practices, there wouldn't be the political will to properly follow it through. Rick's example could be shown to be false in a week of interviews and a quick look at regional P&L breakdown, unless they follow it through to such an extent that they pay the execution monkeys what the decision makers should earn and vice versa. The new country by country reporting rules should stop this sort of thing, as it will stick out like a sore thumb (all profits in one location, and costs in a different location) and allow tax authorities to target their limited resource more effectively and accurately.

Matthewfalle

Rick Chasey wrote:

Well my colleagues at the time placed one of their traders and when he sent out the announcement they gave us a heavy smack down because we didn’t refer to them as brokers.

Well, this I don't believe instantly because Rick has previously proven that he does not work in any form the the finance industry, so none if his colleagues could have done this because of none of his colleagues work in the finance industry.

After a quick skim read it still seems that people still don't understand how a tax haven or offshore investments work.

Stevo- am I correct in this?

rick_chasey

Why d'ya defend tax havens?

What's the macro benefit of them?

rjsterry

Matthewfalle wrote:

Rick Chasey wrote:

Well my colleagues at the time placed one of their traders and when he sent out the announcement they gave us a heavy smack down because we didn’t refer to them as brokers.

Well, this I don't believe instantly because Rick has previously proven that he does not work in any form the the finance industry, so none if his colleagues could have done this because of none of his colleagues work in the finance industry.

After a quick skim read it still seems that people still don't understand how a tax haven or offshore investments work.

Stevo- am I correct in this?

Are you still in a huff about the name calling several pages back?

Matthewfalle

rjsterry wrote:

Matthewfalle wrote:

Rick Chasey wrote:

Well my colleagues at the time placed one of their traders and when he sent out the announcement they gave us a heavy smack down because we didn’t refer to them as brokers.

Well, this I don't believe instantly because Rick has previously proven that he does not work in any form the the finance industry, so none if his colleagues could have done this because of none of his colleagues work in the finance industry.

After a quick skim read it still seems that people still don't understand how a tax haven or offshore investments work.

Stevo- am I correct in this?

Are you still in a huff about the name calling several pages back?

no - its just that if you are attempting to debate a topic then you shouldn't be saying something you aren't: it belittles your argument is fairly rude to people like Stevo who work - and who have studied and worked very hard to get to where they are - in the industry.

Matthewfalle

Rick Chasey wrote:

Why d'ya defend tax havens?

What's the macro benefit of them?

firstly - apols for the spelling in this post - am tapping on a telephone.

i thonk the first problem is that you don't understand what a tax haven is - you seem to have a view thst has been formed by reading certain newspapers, discussing the topic will ill informed and misunderstanding people and a lack of personal knowledge.

we still don't actually know what you think s tax haven is as you haven't posted despite being asked a number of times.

basically, the capitalist model needs several different types of marketplace - physical, economic and theoretical. The demand for a philosophical market place is also debatable.

tax havens provide the market place for the economic market - there are absoloutely no boundaries to entry, they are accesible to everyone and are legally governed through d
statute both single and multijurisdictional.

the structures they use, the banking systems investment schemes etc are all rrgulated and transparency laws are in place. theres nothing secret about them.

tax havens are just a simple small place to find everything you need to mansge your money - banks, lawyers, inv managers etc. all legal, above board, etc - you have to accept this unfortunately otherwise they would all be blacklisted: which they aren't.

bear in mind that London is a pretty good tax haven for property structures: the people who own the flat you rent undoubtedly own it through an offshore company.

its all extremely simple but you seem unable to understand/accept it.

on a macro basis - you don't define whether this is worldwide orover the jurisdiction - I think its a word you have heard spoken about but don't really know what it means.

Stevo_666

Matthewfalle wrote:

Rick Chasey wrote:

Well my colleagues at the time placed one of their traders and when he sent out the announcement they gave us a heavy smack down because we didn’t refer to them as brokers.

Well, this I don't believe instantly because Rick has previously proven that he does not work in any form the the finance industry, so none if his colleagues could have done this because of none of his colleagues work in the finance industry.

After a quick skim read it still seems that people still don't understand how a tax haven or offshore investments work.

Stevo- am I correct in this?

It is all still being looked at through the lens of 'Oh but the activity could have been carried out in the UK and the tax paid in the UK', forgetting that multinationals are largely free to base their operations where they choose. And quite often tax will be a factor in that decision.

There is also the assumption that all people do is shove money into a tax haven - see Pinno's 'definition'. Simply not true. Good example - we have a distribution hub in the UAE servicing Middle East and North Africa markets. No corporate tax, no income tax etc - classic hallmarks of a tax haven. But it is a real live operation with offices, staff, activity. It is there partly because it makes logistical sense to put it there and also a contributory factory (thanks to yours truly) - the bottom line return is 20%-30% higher than some of the alternatives. Is that tax avoidance?

Stevo_666

hopkinb wrote:

Surrey Commuter wrote:

Rick Chasey wrote:

I mean, take one example i'm very familiar with; Trafigura, having been caught dumping toxic waste off the west coast of Africa, with their owner being put under house arrest, decided to move their office from London to Geneva to avoid the scrutiny.

There's another trader (who shall remain nameless, lest I fall foul of their lawyers), who has all their traders in a big financial hub. They are all the trading decision makers, etc. But they decide to name them as brokers, and have a bunch of graduate execution monkeys in a tax haven who actually punch in the trades and book them who are officially the 'traders' specifically for tax reasons.

Now, what's the value add there?

Lack of transparency and tax havens go hand-in-hand.

Exactly the same with Facebook/Google/LinkedIn - booking sales to Ireland. Ironically if HMRC had access to LinkedIn they could prove The fraudulence of this argument

HMRC aren't resourced well enough, having suffered pretty radical cuts in staff and budget since 2010. I suspect that even were HMRC aware of such egregious practices, there wouldn't be the political will to properly follow it through. Rick's example could be shown to be false in a week of interviews and a quick look at regional P&L breakdown, unless they follow it through to such an extent that they pay the execution monkeys what the decision makers should earn and vice versa. The new country by country reporting rules should stop this sort of thing, as it will stick out like a sore thumb (all profits in one location, and costs in a different location) and allow tax authorities to target their limited resource more effectively and accurately.

Aside from country by country reporting you mention, we have several other mechanisms to root out and deal with genuine cases of abuse/tax evasion:
- Exchange of information agreements with most tax havens
- UK CFC (anti-tax haven rules) allowing the UK to tax the results of tax havens as if they were UK profits plus mandatory disclosure of Group companies subject to the rules.
- Withholding taxes on payment so non-tax treaty countries.
- Other BEPS actions such as anti treaty shopping, tightening of permanent establishment rules etc

So - question to those who think that not enough is being done: what in the extensive current suite of anti-avoidance and disclosure rules above do you think is insufficient or missing?

Stevo_666

Rick Chasey wrote:

Why d'ya defend tax havens?

What's the macro benefit of them?

You seem to be coming into the argument that they are only there to do wrong. Sure, there are abuses and and misuses but that can happen anywhere and you seem to wilfully ignore the enormous amount of legitimate business in those places. See my post above on the defences that we already have and maybe tell us what you think specifically needs to be tightened up to catch the real abuse cases?

Or are you simply proposing to ban them/close them down somehow?

Matthewfalle

Rick Chasey wrote:

Why d'ya defend tax havens?

What's the macro benefit of them?

Why d'ya attack tax havens?

What's the macro bad side to them?

Matthewfalle

And you still fail to have replied to the questions I have posed in my post above, which is a regular thing with you - you seem to be able to attack with posts based on no evidence and ignorance of the facts but unable to reply when questioned.

Matthewfalle

Stevo 666 wrote:

Rick Chasey wrote:

Why d'ya defend tax havens?

What's the macro benefit of them?

You seem to be coming into the argument that they are only there to do wrong. Sure, there are abuses and and misuses but that can happen anywhere and you seem to wilfully ignore the enormous amount of legitimate business in those places. See my post above on the defences that we already have and maybe tell us what you think specifically needs to be tightened up to catch the real abuse cases?

Or are you simply proposing to ban them/close them down somehow?

Or maybe, as Moonchicken suggested, invade them ........

rjsterry

Matthewfalle wrote:

rjsterry wrote:

Matthewfalle wrote:

Rick Chasey wrote:

Well my colleagues at the time placed one of their traders and when he sent out the announcement they gave us a heavy smack down because we didn’t refer to them as brokers.

Well, this I don't believe instantly because Rick has previously proven that he does not work in any form the the finance industry, so none if his colleagues could have done this because of none of his colleagues work in the finance industry.

After a quick skim read it still seems that people still don't understand how a tax haven or offshore investments work.

Stevo- am I correct in this?

Are you still in a huff about the name calling several pages back?

no - its just that if you are attempting to debate a topic then you shouldn't be saying something you aren't: it belittles your argument is fairly rude to people like Stevo who work - and who have studied and worked very hard to get to where they are - in the industry.

So being rude about Rick's job is what then? Payback? As you say, it's belittling your argument.

Anyway. Stevo has made the point that countries adjust their tax rates to draw in more business and tax income. Fair enough - I can see why, you'd want to undercut the competition by a few percent but how does that work when a country sets their tax rate at zero? What do they - the country - get out of it beyond a few people renting offices?

hopkinb

Stevo 666 wrote:

hopkinb wrote:

Surrey Commuter wrote:

Rick Chasey wrote:

I mean, take one example i'm very familiar with; Trafigura, having been caught dumping toxic waste off the west coast of Africa, with their owner being put under house arrest, decided to move their office from London to Geneva to avoid the scrutiny.

There's another trader (who shall remain nameless, lest I fall foul of their lawyers), who has all their traders in a big financial hub. They are all the trading decision makers, etc. But they decide to name them as brokers, and have a bunch of graduate execution monkeys in a tax haven who actually punch in the trades and book them who are officially the 'traders' specifically for tax reasons.

Now, what's the value add there?

Lack of transparency and tax havens go hand-in-hand.

Exactly the same with Facebook/Google/LinkedIn - booking sales to Ireland. Ironically if HMRC had access to LinkedIn they could prove The fraudulence of this argument

HMRC aren't resourced well enough, having suffered pretty radical cuts in staff and budget since 2010. I suspect that even were HMRC aware of such egregious practices, there wouldn't be the political will to properly follow it through. Rick's example could be shown to be false in a week of interviews and a quick look at regional P&L breakdown, unless they follow it through to such an extent that they pay the execution monkeys what the decision makers should earn and vice versa. The new country by country reporting rules should stop this sort of thing, as it will stick out like a sore thumb (all profits in one location, and costs in a different location) and allow tax authorities to target their limited resource more effectively and accurately.

Aside from country by country reporting you mention, we have several other mechanisms to root out and deal with genuine cases of abuse/tax evasion:
- Exchange of information agreements with most tax havens
- UK CFC (anti-tax haven rules) allowing the UK to tax the results of tax havens as if they were UK profits plus mandatory disclosure of Group companies subject to the rules.
- Withholding taxes on payment so non-tax treaty countries.
- Other BEPS actions such as anti treaty shopping, tightening of permanent establishment rules etc

So - question to those who think that not enough is being done: what in the extensive current suite of anti-avoidance and disclosure rules above do you think is insufficient or missing?

High quality staff to enforce the existing rules Stevo. All very well having the rules, but you know as well as I do that HMRC staff aren't always the sharpest tools in the box, and there are fewer and fewer of them, as cuts bite, and the Big 4 buy off the brighter HMRC people.

Matthewfalle

Don't forget though that the majority of the people staffing the offshore finance centers aren't really - well at all, tbh - bright at all. In fact most of them are quite dim, they just push paper round doing things that have been planned by much more cleverish people like Stevo.........

Once these structures have been incorporated they are very very simple to run.