International Taxpayer Leaders Forum Newsletter, N.32

International Taxpayer Leaders Forum Newsletter, N.32 – July 17, 2015

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North America Tax Challenges For The Uber Economy

The sharing economy. The collaborative economy. The Uber economy. It goes by many names. Whatever you call it, the phenomenon of specialized on-line marketplaces connecting small businesses with customers is growing by leaps and bounds. The primary builders of these marketplaces are tech-savvy, venture-capital-fed firms like Uber…Continue Reading

 

Canada Revenue Agency writes off billions in ‘uncollectible’ tax debts

The federal revenue agency has written off at least $4 billion in debts in the last two years — including accounts worth more than $10 million, newly released records show. Debts were declared uncollectible because those owing had died, gone bankrupt, could not be located or lived outside Canada, according to Canada Revenue Agency records obtained under the Access to Information Act. Continue Reading

 

‘Hillarynomics’: A sneak preview

Hillary Clinton has chosen the overarching economic theme of her presidential campaign: America’s middle class needs a raise. In a speech Monday at the famously progressive New School in lower Manhattan, Clinton will lay out her economic theory of the case, and her main theory is that the incomes of “everyday Americans” have remained too low for too long. Continue Reading

 

Paul Ryan Backs Tighter Tax Compliance to Patch Road Fund

House Republicans are proposing to tighten tax-compliance rules to keep the U.S. highway fund solvent through mid-December, setting up a clash with their Senate counterparts who said they favor a multi-year bill. Continue Reading

Canada Will Not Hike Pension Payroll Tax

Canadian Finance Minister Joe Oliver has said the Government will not impose a mandatory increase in Canada Pension Plan (CPP) contributions but will instead consider options for a voluntary supplement to the payroll tax. Oliver said: “We believe in offering Canadians choice in retirement savings options. What we do not believe in are reckless tax hikes that would kill jobs at the very time when Canadians need more jobs, not less. Hiking payroll taxes would take money out of the pockets of hard working Canadian families that need the money to pay for basic necessities like groceries, gas, and housing.” Continue Reading

Norquist Statement on Walker Tax Record

ATR president Grover Norquist issued the following statement today on the occasion of Governor Scott Walker’s entrance into the 2016 Presidential race…Continue Reading

 Hillary in 2004: “We’re going to take things away from you on behalf of the common good” During a 2004 fundraiser, then-Senator Hillary Clinton spelled out her tax worldview to the assembled Democrat donors: “We’re going to take things away from you on behalf of the common good.” The comment was overheard and reported by the Associated Press. Continue Reading

World’s Most Misleading Headlines

When I wrote about the media, it’s generally to criticize sloppy and/or biased reporting. But maybe I need to have a new category that features misleading headlines. For instance, here’s a report by Fox Business News that grabbed my attention because of the headline. The story is about the arrest of an IRS bureaucrat. Continue Reading

 Norquist to Clinton: Buffett Rule Yourself First

Today Hillary Clinton called for a “Buffett Rule” tax increase on the American people. Though taking various forms, a “Buffett Rule” generally requires that taxpayers with bigger incomes face a higher tax rate than others. According to several methods of calculation, they already do. But Hillary Clinton doesn’t have to wait for a Buffett Rule of her design to pass Congress. She can make a voluntary payment to the United States Treasury right now. Continue Reading

 Chicago’s “Amusement” Tax is No Laughing Matter

Convenience has a new price for Chicago residents. Thanks to a fiat administrative declaration by Chicago’s Department of Finance, residents are now burdened with a new online “amusement services” tax. That means if your billing address is within city limits, you will be forced to pay a 9% tax for services like Netflix, Spotify, and Xbox Live. Continue Reading

Sens. Rob Portman And Chuck Schumer Propose International Tax Reform

Sens. Rob Portman (R-OH) and Chuck Schumer (D-NY) have proposed a bipartisan tax reform plan that will reduce taxation of overseas profits and fund needed highway and infrastructure development, the New York Times reports. The legislation would reduce the tax rates on profits made overseas by U.S. corporations while enabling increased funding of highway and infrastructure projects. Continue Reading

Europe/ Eastern Europe

HMRC to step up sanctions against offshore tax evasion

In a consultation paper issued on Thursday, the tax authority said the move was in preparation for the automatic exchange of tax information among the 90 nations signed up to the Common Reporting Standard (CRS), which begins in 201. “The days of hiding money offshore are coming to an end,” it said in the consultation paper. Continue Reading

 

German Construction Company Avoided Paying Tax in Greece

While the world’s media turned towards Greece in one of the most dramatic economic wrangles since World War II, a story published in 2014 about Germany being the biggest tax evader in Greece went untold. In September last year, a court in Athens found that Hochtief, a German construction company running Athens International airport had avoided paying VAT for 20 years. The article appeared in New Europe and was republished by the Greek Reporter. Continue Reading

 

Greece approves contentious austerity measures, smoothing way for bailout

Hours after police and demonstrators clashed in central Athens, Greek lawmakers on Thursday approved austerity measures that were overwhelmingly rejected by their citizens just days ago. The vote represented a stark turnabout for the government, and it was the price Greece’s lenders demanded for saving the country from a whirlwind of economic turmoil. Continue Reading

EU tax: Tough love for multinationals’ sweetheart deals

Until a few months ago, the medieval town of Athenry in County Galway owed its fame mainly to a song. Irish rugby and football fans often burst into stirring renditions of “The Fields of Athenry”, a ballad about the country’s devastating 19th-century famine. In February, Tim Cook, Apple’s chief executive, gave Athenry another taste of the limelight, saying the tech group would build an €850m data centre there to power critical online services such as the iTunes and App stores. Continue Reading

Exclusive: Guernsey chief minister defends island’s tax credibility

Speaking exclusively to International Adviser, Le Tocq described the list of the 30 most un-cooperative tax jurisdictions as “arbitrary” and questioned the legitimacy of combining unspecific lists from a variety of EU jurisdictions. “It doesn’t make sense for Guernsey to be on the list for a variety of reasons,” he said. Continue Reading

Ukraine Won’t Tax Hollywood and Foreign Films

Ukraine won’t introduce an exhibition tax on Hollywood and other foreign films, proceeds from which would be used to fund national film production. The idea was seriously considered earlier this year as a measure to support the cash-strapped local film industry, but it caused substantial criticism, and authorities eventually decided not to go ahead with it. Continue Reading

 

Ukraine to lower natural resource royalties by half – finance minister

Ukrainian Finance Minister Natalie Jaresko announced that Kiev will be lowering its natural resource royalty taxes to spur business. The move comes following complaints from investors that the 55 percent rate introduced last year was too high. “We decided to lower the royalty taxes by about half, beginning with October 1,” Jaresko said during US-Ukraine Business Forum taking place in Washington, D.C. Continue Reading

 

Key pillar of the Beps process is to align profit with value creation

In Paris last week, as Angela Merkel and Francois Hollande discussed events in Greece, the international tax system was being discussed in an underground meeting room at OECD headquarters. For almost two days tax authority delegates from more than 40 countries, including Ireland, met with more than 60 representatives from industry, advisors and NGOs. Continue Reading

UN hopes ‘tax inspectors without borders’ will combat tax dodging

Backers of a new initiative, dubbed “tax inspectors without borders”, say it can help poor countries crackdown on tax dodging and fund their own development, but advocacy groups on Monday were sceptical that it would work. Nearly $1 trillion in illicit finance, stemming from tax evasion, crime and corruption, is estimated to leave poor countries each year, according to Global Financial Integrity (GFI), a policy research group. Continue Reading

Greeks come to grips with realities of latest international bailout terms

In a middle-class Athens neighborhood full of boarded-up storefronts, customers lined up at the Rizos Bakery on Monday to inhale the lovely smells of fresh bread and emerge with loaves still warm from the ovens. Co-owner Alexandros Rizos stood behind the counter and worried whether he would have to lay off workers, or whether his 15-year-old business might go under. Greece secured a third bailout Monday that averts financial catastrophe but hits some of its already struggling citizens hard. Continue Reading

Initiative to make tax audits more effective

In a press release, The Organization for Economic Cooperation and Development and the United Nations Development Program announced the launch of an initiative to help developing countries bolster domestic revenues by strengthening their tax audit capacities. The project, Tax Inspectors Without Borders, will facilitate targeted tax audit assistance in developing countries worldwide. Continue Reading

 

Ibero-America Argentina brings the curtain down on energy tax credits

Argentina ended some financial incentives today that were intended to boost energy investment in its huge shale oil and gas deposits, even as it seeks to narrow an energy trade gap. The government announcement in an official gazette comes as Argentina seeks to develop its vase but barely tapped Vaca Muerta shale deposits…Continue Reading

 

World Leaders Challenge Vulture Funds, Tax Reform Still Distant A draft agreement on financing for development includes sustainable lending measures that challenge predatory hedge fund practices. While civil society calls for an end to corporate control of development financing, world leaders this week are set to challenge predatory “vulture funds” at the Financing for Development Conference in Addis Ababa, Ethiopia. Continue Reading

Vodafone tax row: Government names Costa Rica’s Rodrigo Oreamuno as arbitrator

The Indian government has named Rodrigo Oreamuno from Costa Rica, an international arbitration expert, as its nominee to resolve the Rs 20,000-crore tax dispute with Vodafone Group Plc which is currently under arbitration. Continue Reading

Eurasia Russia refinery upgrades, tax reforms impact vacuum gasoil output, exports

Platts Chris Vowden, managing editor for fuel, refinery feedstocks and bunkers, Elza Turner, senior editor for Russian domestic market and refineries and Jelena Grigorjeva, associate editor for refinery feedstocks, discuss the recent changes in Russia’s VGO output and exports in the aftermath of the tax reform and refinery upgrades. Continue Reading

 

Russian Film Distributors Beg Putin Not to Tax Foreign Movies

Russia’s largest film distributors have urged President Vladimir Putin to block a proposed tax on tickets to foreign movies, which they say would lead to a wave of movie theater closures across the country, Russian media reported Thursday. The proposed tax on tickets to foreign films, an idea floated by top government officials last month, would inevitably raise the cost of tickets and reduce movie theaters’ clientele, Eduard Pichugin, the CEO of movie studio Lenfilm, told the Interfax news agency on Thursday. Continue Reading

Uzbekistan, Belgium to exchange tax info

Uzbekistan’s President Islam Karimov has signed a protocol to make amendments to Uzbek-Belgian convention on avoidance of double taxation and prevention of tax evasion on income and capital. Continue Reading

Turkmenistan approves preferential taxation

President of Turkmenistan Gurbanguly Berdimuhammadov has approved a list of types of business activities subject to preferential taxation and fixed license fee on them, local media reports. Continue Reading

 

Middle East/Africa Key global development summit to open in Ethiopia  World leaders are meeting in Ethiopia’s capital from Monday for a development financing summit presented as crucial for United Nations efforts to end global poverty and manage climate change by 2030. Continue Reading

 

UAE Introduces First Federal Tax System

As oil prices slump for the past year, the United Arab Emirates is setting up a federal tax system to help boost government revenue. The federation of seven emirates is considering corporate tax and value-added tax. At the federal level there is no corporate income tax. There’s also no personal income tax or value-added tax. Continue Reading

 

Greening: Tax generation key to ending poverty

Tax generation, economic growth and job creation will be crucial to end extreme poverty over the next 15 years, Justine Greening has said at a major development conference in Ethiopia. The UK International Development Secretary is attending the UN Financing for Development Conference in Addis Ababa, where a new global agreement on tax reform has been signed today. Continue Reading

 

SARS gives olive branch to overseas tax evaders

The South African Revenue Service (SARS) has identified South Africans who use bank accounts overseas to evade tax liabilities – and has given them an olive branch to come clean. This follows media reports five months ago that revealed that South Africans held R23bn in secret Swiss bank accounts. Continue Reading

 

Africa: Ffd3 – Actionaid Says Failure to Create a UN Global Tax Body “Appalling”

The third international Financing for Development conference in Addis Ababa, Ethiopia, has failed to agree on the creation of a UN global tax body. ActionAid’s international tax power campaign manager, Martin Hojsik, said the decision was “an appalling failure and a great blow to the fight against poverty and injustice.” Continue Reading

 

Poor Nations Push for UN Body to Cut Company Tax Avoidance

Developing nations and advocacy groups at a United Nations conference in Ethiopia are pushing for a new global body to tackle tax avoidance by companies, a move opposed by richer nations. Responsibility for tax standards should be moved to the UN from the Organization for Economic Co-operation and Development, a group of 34 rich countries, according to a position paper endorsed by 142 civil-society groups. Continue Reading

 

Asia/Southeast Asia Governments Cannot Choose What Is Good For Us

Having served as the Economic Advisor to the Malaysian Treasury some forty years ago, I am always pleased to come back and observe the astounding material progress and social change in this country. Continue Reading

 

Beijing lures business to Shanghai with visas, low taxes and help for the kids

Shanghai has made its latest move to supplant Hong Kong as the region’s dominant financial centre, offering foreign executives tax holidays, permanent residency and even the option of bringing their nanny. As China’s central government continues to squeeze Hong Kong politically, Shanghai is looking attract foreign talent and enterprises away from the former British Colony. Continue Reading

 

Aviation body appeals to exempt international air tickets from service tax

Global airlines body IATA today made an appeal to the [Indian] government, among others, to exempt international air ticket from service tax, for ease of doing business here, even as the Civil Aviation Ministry said there were different laws and regulations in different countries. Continue Reading

 

Property tax ‘likely to be fairer’ The Finance Ministry is set to impose a progressive tax on land and buildings instead of the flat tax system proposed earlier, saying this would be a better way to narrow economic disparity, a ministry source says. A bill on the controversial land and buildings tax, which is being amended, will stipulate progressive rates that will mean bigger tax bills for people with expensive properties. Continue Reading

BEPS: A multinational problem calling for a multinational solution

The public has always been familiar with the terms tax dodging, tax avoidance, and tax structuring. However, in today’s international tax parlance, terms have evolved into more creative and catchy phrases. One may have probably encountered the terms “Double Irish” and “Dutch Sandwich”, more often combined by tax lawyers as “Dutch Sandwiches washed down with a Double Irish”, as well as the so-called “Bermuda Triangle”. Continue Reading

Australasia Travel tax could cost 100s of jobs – airlines

New Zealand’s looming travel tax could cost hundreds of jobs here and is a breach of international aviation principles, a global airline organisation says. The International Air Transport Association says the fees which could add up to close to $22 for a round trip international air fare would have a “profound negative impact” on air travel demand and tourism. Continue Reading

Treasurer Joe Hockey says United States is looking to take share of Australia’s tax base Treasurer Joe Hockey has taken aim at the United States for dragging its feet on taxing multinationals such as Google, and says the Obama administration now wants to come after Australia’s tax base. Australia has been working with the United Kingdom on a local version of Britain’s ‘Google tax’ to try and collect more money from multinationals. The United States has been critical of such taxes, long arguing that it will not sign up to a plan that cannibalises its tax base. Continue Reading

 

Aldi lifts lid on its profits and tax

German supermarket chain Aldi has lifted the lid on the surging profits in its Australian business as it seeks to defend its record on paying its taxes. In a submission to the Senate inquiry into tax avoidance, the notoriously publicity shy discount supermarket chain both defends its behaviour on tax and reveals its profitability. Aldi, controversially in the eyes of some critics, is structured as a limited partnership in Australia meaning it does not file detailed accounts with ASIC. Continue Reading

 

Hot Topic

Taxman’s power to raid bank accounts ‘flies in the face of Magna Carta’

George Osborne’s decision to allow tax inspectors to raid people’s personal bank accounts “flies in the face” of Magna Carta, Francis Hoar, a senior barrister, has warned. Mr Hoar, a prominent human rights lawyer and lecturer, said there are “significant flaws” in the new plans, which would enable HM Revenue & Customs (HMRC) to take money from accounts to resolve unpaid tax bills. Continue Reading

 

New Study: Corporate Tax Rate Most Important Single Factor for Investment

Multinational corporations, intergovernmental organizations, and academics know that high levels of corporate taxation serve as a disincentive for foreign direct investment (FDI). Companies shift resources toward countries that provide the most business-friendly climate and away from those nations more hostile to investment. Continue Reading

 

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