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Press Release: Has the European Commission’s Apple decision signalled the beginning of the end of tax wars?

August 30, 2016   Blog

Press release – for immediate releaseglobal logo - square version NOV 2005

Has the European Commission’s Apple decision signalled the beginning of the end of tax wars?

Today, the European Commission has ruled that two tax rulings issued by the Irish tax administration on the tax treatment of Apple’s corporate profits represent illegal state aid under EU law. As a consequence, Apple has to pay up to €13 billion of taxes plus interest to Ireland. This sum due to the Irish exchequer can be reduced if other countries from Europe, Africa, the Middle East or India or the United States decide to claim a share of those profits. This lays bare the core of a global problem: secretive tax rulings issued by tax haven states are not an instrument for the avoidance of double taxation, but a tool for the achievement of non-taxation of profits. In practice such rulings destroy fair market competition and undermine the tax sovereignty of democratic states.

This decision is remarkable on at least three counts.

The G20 and OECD tax haven blacklist proposals risk becoming another whitewash

July 22, 2016   Blog

Press Release: For immediate release, July 22, 2016

The G20 and OECD tax haven blacklist proposals risk becoming another whitewashtjnMain3616x3616

This weekend G20 Finance Ministers from the G20 countries will meet in China. One of the items on their agenda will be to agree the criteria for identifying non-cooperative jurisdictions with respect to tax transparency, which the OECD has been mandated to establish. The first details of the proposals have become public and our analysis gives rise to grave concerns that the criteria are, in the same way as past attempts at blacklists, weak and ineffective. The USA in particular is likely to escape blacklisting because of the peculiar nature of the criteria.

The three criteria the OECD has come up with for assessing non-cooperative jurisdictions are summarised below. Each country has to meet two of the three in order to escape blacklisting:

  1. If the country gets a rating of “largely compliant” or better from the OECD’s Global Forum, as regards the “exchange of information on request” standard of transparency.
  2. The country commits to adopting automatic information exchange (the so-called Common Reporting Standard, CRS), and to begin exchanges by 2018 at the latest.
  3. The country has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MCMAA), a multilateral framework for all kinds of information exchange, or if it has what the OECD considers a sufficiently broad exchange network providing for exchange of information on request and automatic exchange of information.

Some countries “lose” 2/3 of exports to misinvoicing

UnctadFrom UNCTAD, the UN Conference on Trade and Development, via email:

“Some commodity dependent developing countries are losing as much as 67% of their exports worth billions of dollars to trade misinvoicing, according to a fresh study by UNCTAD, which for the first time analyses this issue for specific commodities and countries.
 
Trade misinvoicing is thought to be one of the largest drivers of illicit financial flows from developing countries, so that the countries lose precious foreign exchange earnings, tax, and income that might otherwise be spent on development.”

Trove of secret Swiss bank data released to European countries: now use it!

From Campact in Germany

Image: Campact, Germany

Back in 2014 Reuters reported, in a pre-echo of the Panama scandal:

“Authorities in the German state of North Rhine-Westphalia [NRW] have bought a CD containing data about several thousand German clients of a Swiss bank, German newspaper Bild am Sonntag said on Sunday without citing its sources.”

And this wasn’t the only one: already in 2013, half a dozen of these CDs had already been purchased.

Now, from NRW’s Finance Ministry, via Sven Giegold and Tove Maria Ryding:

“The revenue service of the German state of North Rhine-Westphalia last week forwarded electronic records to more than twenty countries in Europe for scrutiny and to help prosecute tax evaders. Modelled on earlier cooperation with Greece, information on holders of Swiss bank accounts was sent to the Federal Central Tax Office (BZSt) and passed on to the various authorities.”

Big bills: let’s recall them all

February 23, 2016   Blog
500 Euro

In the underworld, this one is known as the “Bin Laden”

In June 2014 we wrote an article about Big Bills: those high-value cash notes that are primarily of use to the world’s criminals (when was the last time you saw a 500 Euro note in the flesh, for instance?)   The countries that print them can literally make a killing from so doing.

Big bills have been in the news again recently, with proposals in Europe stop printing the damn things. A New York Times headline today summarises:  Getting Rid of Big Currency Notes Could Help Fight Crime.

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