International Taxpayer Leaders Forum Newsletter, N.22

Section: Taxpayer Leaders Forum
16 January 2015

International Taxpayer Leaders Forum Newsletter, N.22 – January 16, 2015

“A government that is big enough to give you all you want is big enough to take it all away.” – Barry Goldwater

North America

America’s Shrinking Corporate Sector
Corporate inversions have been the dominant tax issue over the last year and have forced a serious evaluation of the U.S. corporate tax system. While there is widespread agreement that the U.S. corporate tax code is out of step with our global competitors, there is also concern that inversions and other aggressive tax planning techniques are eroding the nation’s tax base.Continue Reading

If the Internet becomes a public utility, you’ll pay more. Here’s why
The Federal Communications Commission is in the middle of a high-stakes decision that could raise taxes for close to 90 percent of Americans. The commission is considering whether to reclassify broadband as a telecommunications service and, in doing so, Washington would trigger new taxes and fees at the state and local level. Continue Reading

Slick website makes case against new tax for TransLink
Opponents of a tax to fund TransLink’s 10-year plan for roads, bridges and transit have released a scheme of their own to pay for getting around Metro Vancouver. Continue Reading

If You Want to Gauge the Health of the Job Market, Focus on Employment rather than Unemployment
For the past several years, on the issue of jobs, I’ve focused more on the employment-population ratio rather than the official unemployment rate. Both figures are important, of course, but I think the employment-population ratio has more economic meaning since our prosperity ultimately is based on how many people are productively employed. Continue Reading

IRS Breaks Law, Refuses to Produce Tax Complexity Reports
In defiance of federal law, the Internal Revenue Service has failed to produce annual reports on ways to reduce tax complexity, the National Taxpayer Advocate said in its annual report to Congress released this week. Continue Reading

The Texas Margin Tax: A Failed Experiment
There are a lot of reasons to live and do business in Texas. The state has vast natural resources, large urban centers, access to ports, and, for the most part, well-structured fiscal policies that have contributed to substantial growth. However, one element of the state’s fiscal structure that has created serious controversy is the state’s Margin Tax. Continue Reading

American expats in Canada who sell their house might face IRS taxes
There’s been a lot of attention in recent years on how U.S. citizens in Canada are being targeted by the Internal Revenue Service. Lost in all the commotion is a little known, long-standing rule concerning houses: If Americans living in Canada sell a house for a gain of more than $250,000 (U.S.) per taxpayer, they must pay capital gains tax on it. Continue Reading

Van Hollen’s Liberal ‘Action Plan’ Is Nothing but Old Ideas and Failed Policies
Earlier today Rep. Chris Van Hollen (D-MD) outlined the latest House Democrat economic plan, which like previous proposals centers around a “massive transfer of wealth”.  In fact, the supposed “stark shift in messaging” is nothing more than a thinly veiled attempt to promote the same economic policies that the left have continually pushed down the throats of American taxpayers. Continue Reading

In Hershey, congressional Republicans back away from federal gas tax hike
With a long-term funding fix for the federal highway system looming large on their to-do list, congressional Republicans gathered Thursday in a state where GOP legislators recently hiked taxes on gasoline — and still have benefited from a national plunge in gas prices. Continue Reading

Tax benefits and new legislation ring in the New Year
The first day of 2015 brings with it a mixed bag of good and bad news for residents of Ontario and right across the country. To begin with, restaurant and bar patios are off limits — among other places including parks — to smokers across the province and on the national front all Canadians should brace themselves for higher payroll taxes. Continue Reading

Europe/ Eastern Europe

EU’s Plan To Implement Interchange Fee Caps Will Raise Costs For Consumers
Member states in the European Union have agreed to implement a uniform cap across the region on interchange fees for electronic payment systems. In response to this dangerous policy, Americans for Tax Reform has released an international coalition letter together with 76,000 European consumers and nine free market advocacy groups from countries across the world outlining their opposition. Continue Reading

Amazon tax deal with Luxembourg was ‘cosmetic’
The European Union said Luxembourg hastily approved a “cosmetic” tax deal with Amazon in 11 days, allowing the company to shift profits to a tax-free unit. The EU told Luxembourg officials in a letter that the deal, based on a “cosmetic arrangement,” gives the Internet retailer an unfair advantage over competitors and does not comply with global standards. Continue Reading

Cross-Border tax competition to heat up
Draft laws to cut the corporate tax rate in the North raise the prospect of tougher competition for foreign investment within Ireland and with Britain. The British government’s move sets a precedent which could yet be replicated for Scotland, deepening Britain’s challenge to Ireland’s commanding lead in the race for multinational jobs. Continue Reading

Ed Balls Challenges the Chancellor with TPA
Is the Chancellor’s “Charter for Budget Responsibility” a “gimmick”? We think so – and apparently Ed Balls does too. Continue Reading

Bulgaria says it will start talks to join the euro
Bulgaria will begin talks on adopting the euro, its finance minister said on Thursday (15 January), adding that the Balkan country may join the preliminary exchange-rate mechanism for eurozone entry by the end of 2018, Nova television reported. Continue Reading

France Just Quietly Killed Its Failed 75% Supertax
The eye-catching and eye-watering 75% payroll tax rate in France was quietly killed off by the government Thursday after failing to raise significant revenue. The tax was also accused of driving high earners away from France. Continue Reading



HSBC Argentina offices raided in tax probe
In November last year, the country’s tax agency AFIP filed a complaint against HSBC Argentina in a federal court over the alleged scheme, which is said to have helped Argentines avoid paying around US$3bn in taxes. Continue Reading

China agrees to invest $20bn in Venezuela to help offset effects of oil price slump
China has agreed to invest more than $20bn (£13.2bn) in Venezuela to help it overcome an economic slump exacerbated by plummeting oil prices, the Venezuelan president has announced. The Venezuelan president did not give further details, and it remains unclear whether the sum represents a fresh arrangement or is part of pre-existing oil-for-loans deals. Continue Reading

Mexico Grants Tax Benefits To Farmers In Southern States
The Mexican Government enacted a decree on January 1, 2015, granting preferential tax treatment to farming activities in the southern states of Chiapas, Guerrero and Oaxaca, according to an announcement from the Secretariat of Finance and Public Credit (SHCP). Under the decree, taxpayers based in the above three states who are engaged exclusively in agribusiness or the primary sector are entitled to offset 25 percent of the cost of new fixed assets against income tax. Continue Reading


Fitch downgrades Russia’s credit rating to 1 notch above junk level
The international ratings agency has knocked Russia’s credit rating down a peg, while warning that ‘growth may not return until 2017,’ as the national economy struggles amid sanctions and tumbling oil prices. Continue Reading

Kazakhstan’s Economic Outreach
Kazakhstan has unveiled a new investment campaign and commercial, “Invest in Kazakhstan” aimed at attracting foreign investment. The commercial highlights the benefits for foreign investors: Exemption from corporate income tax, land tax, property tax, and customs duties for 10 years, “state-in-kind grants, stability of investment legislation, strong protection of investor’s rights, no work permits for foreign labor, visa-free entry for citizens of many countries,” and “still not good enough? Thirty percent cash back on your investments.” Continue Reading

Running an economy on bread and vodka
Small businesses make up only about 22 percent of the Russian economy, compared to 46% in the United States, according to Reuters Blogs. Inspections and demands for extortion show the contempt Putin has towards a major engine of economic growth. Following Tsar Nicholas II and Soviet President Mikhail Gorbachev, the current Russian President is resorting to price controls on vodka and export tariffs on grain to protect his reputation.Continue Reading

NBKr hosts public forum on proposed new ban
The National Bank of Kyrgyzstan (NBKr) recently hosted its first public discussion of draft laws that may impact the country’s banking laws. The drafts consisted of amendments and additions to specific legislative acts within the Republic of Kyrgyzstan. Continue Reading

Middle East/Africa

Kenya’s Capital Gains Tax Stirs Uproar

The re-introduction of Kenya’s capital gains tax has stirred an uproar in the country’s property market. After nearly three decades of being shelved away, the capital gain tax is in motion at a relatively benign rate of 5 per cent as the tax on the gain made on transfer of property which includes land, buildings and marketable securities. Continue Reading

South African tax specialists promote enhanced relationship
South Africa’s Davis Tax Committee (DTC), which was set up to examine how the country’s tax system supports economic development, including job creation, has recommended that the South African Revenue Services (SARS) should adopt the enhanced relationship framework between officials and large taxpayers. Continue Reading

DR Congo tax on rape victim hospital sparks fury
Belgium on Friday urged the Democratic Republic of Congo (DRC) to scrap a heavy tax on a hospital caring for mass rape victims and founded by a doctor honoured by the European Union for his work, saying it threatened the institution’s survival. Continue Reading

Asia/Southeast Asia

Korea’s 2015 tax deficit to be higher than expected
South Korea’s budget deficit is expected to be higher than expected to surpass an earlier estimate of 3.4 trillion won (US$3.1 billion) this year due to lower-than-predicted economic growth and inflation, a parliamentary report said Sunday. Continue Reading

What next for Sri Lanka?
Former Sri Lankan President Mahinda Rajapaksa may have suffered a surprise defeat last week at the hands of his former ally Maithripala Sirisena, but there is no doubt that the economy flourished under his control. With a GDP expansion of 7.8% in 2014, and predictions of 8% for the foreseeable future, it’s clear that Sri Lanka has entered the early stages of catching up with its more developed Asian neighbours. Continue Reading

China’s crackdown on tax evasion to impact cross-border transactions
Multinationals have been advised to take notice of Beijing’s New Year resolution to crack down on tax avoidance and evasion, especially after the announcement of the general anti-avoidance rule (GAAR) and new penalties last month. Beijing’s determination to strike hard at tax evasion is underscored by the recent signing by 21 ministries and departments of an interdepartmental memorandum of understanding on disciplinary measures against such offences, announced on the website of the State Administration of Taxation. Continue Reading

Japan will use sales tax hike revenue to expand welfare spending
Japan’s government agreed on Tuesday to use revenue from a sales tax increase to boost welfare spending in the coming fiscal year to help citizens in its rapidly ageing society cope with higher costs. Prime Minister Shinzo Abe’s government expects an additional 8 trillion yen (45 billion pounds) in tax revenue for the next fiscal year after raising the nationwide sales tax to 8 percent from 5 percent in April 2014. Continue Reading

China’s tax agencies begin tracking citizens’ overseas earnings
National and municipal tax agencies in China are increasingly demanding that citizens report their overseas earnings as authorities begin enforcing the country’s widely ignored tax on citizens’ and companies’ worldwide incomes, The New York Times reported, citing tax advisers. Continue Reading


Carbon tax was inefficient policy: Govt seizes on emissions report
The Federal Government is using recent emissions figures to argue it’s on track to meet its carbon reduction targets. It says the figures show the carbon tax was an ineffective policy. Continue Reading

Assistant Federal Treasurer Josh Frydenberg calls for tax reform in Australia
Assistant Federal Treasurer Josh Frydenberg has called for tax reform in Australia but stopped short of saying whether that should involve changes to the GST. Liberal MP’s Dan Tehan and Andrew Robb have both questioned whether areas that are currently exempt, like education and fresh food, should continue to be protected. Continue Reading

Companies welcome move to change share option tax
Australian companies and remuneration specialists have welcomed the tax office’s long awaited move to change the way options issued under employee share schemes are taxed, essentially postponing the tax point until the options are exercised, rather than granted.Continue Reading

A consumer guide to the Australian economy in 2015
The falling dollar is welcomed by the country’s major economic players including the government, Reserve Bank and Treasury. A lower dollar ought to help the economy transition away from mining-related activity towards non-mining economic activity – but it will make it more expensive for consumers who want to buy things from overseas websites or for people wanting to travel overseas.Continue Reading

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