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Business leaders for a public registry of beneficial ownership in Germany

April 25, 2017   Blog

TJN proudly unveils today its first public call among business leaders in Germany in support of a fully public and effective register of beneficial ownership (BO, or the real owners of companies). So far 12 German businesses with a combined turnover of more than €500 million have signed the petition for amending the current draft law on beneficial ownership. The call proposes amendments by making a BO registry fully public, and by ensuring that the real ultimate beneficial owner is always published, no matter in how many “shells” the German legal entity might be wrapped.

The call emphasises that the publication of the information on beneficial ownership would create a level playing field between currently transparent GmbHs (with domestic, non-legal person shareholders), and currently opaque AGs and GmbHs (with foreign legal person shareholders). At the moment, the users of offshore legal entities can enjoy the (rather sinful) fruits of anonymity while the names of domestic business owners with nothing to hide are often already made public.

Here is the call for signature, and here is the signed call with the current list of signatories (and here is a blog in German introducing the call). The timeline for signatures is tight. The parliamentary schedule foresees that on Wednesday, 26th April, the finance committee will discuss the law and the final discussions in the finance committee are scheduled to happen on 17 May. The final votes in the plenary Bundestag are planned on 18 and 19 May.

Please share this call among any business leader you know who might be interested and who might do business (including) through a German legal entity.

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.”

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