...Indian Black Money Abroad In Secret Banks and Tax Havens Second Report Of The Task Force on the steps to be taken by India Members Shri Gurumurthy, Chartered Accountant, Chennai Shri Ajit Doval, former Director Intelligence Bureau, Delhi Prof R.Vaidyanathan, Professor of Finance Indian Institute of Management, Bangalore Shri Mahesh Jethmalani, Senior Advocate, Mumbai Submitted to BHARATIYA JANATA PARTY 1 I. The First Interim Report The first Interim Report of the Task Force appointed by the Bharatiya Janata Party was released to the public on 17-04-2009. Afterward different world governments, particularly those in the West, have increasingly begun targeting tax havens and intensely began pursuing black money. The US, and France particularly began a huge campaign against the evil of black money. The estimates black money lodged in tax havens by global financial institutions like the International Monetary Fund reached as high as $18 trillion. The instability in the global financial order itself was traced to the evil money. So the issue has now acquired a totally different dimension. In the first Interim Report, the Task Force had suggested broad national and global strategy for dealing with the menace of black money out of the country. The substance of the recommendations of the Task Force in the First Interim Report is summarized here: Global Strategy: • Creating a powerful public opinion and broad national consensus on the issue. Those who do not...
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...Position Paper for the Second Committee of the General Assembly Plenary The issue before the Second Committee of the General Assembly Plenary 2014 is: Increasing and coordinating efforts to fight international tax evasion. The World Bank is fully committed to the fight against international tax evasion as the profit made from either corporate or income tax can be used to support the affected countries in various ways, such as improved commitment to the UN or the World Bank committee. The WB is deeply concerned about tax evasion and its consequences concerning the world and its economy. By making use of non-standard tax havens or offshore banking accounts, companies and individuals exploit their country and therefore damage the country’s liability and economy. As that unjust advantage deceives the affected country, it is a major threat not only to that, but also to the world’s economy. The World is of the mind that, even if only a minority, not paying your tax imposes an unfair burden on the honest majority and prevents money from reaching the crucial public services that need it. One must stop people cheating the tax system and collect more of what is owed. The British tax gap in the 2010 to 2011 financial year was estimated to be £9 billion formed of tax evasion and avoidance. Losses caused by corruption and tax evasion are powerful examples of how criminal activities can potentially have tremendous negative effects on economic development. Also, ill-gotten money is not spent...
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...The world is a constant changing place, changes occur all the time; some expectedly and others unexpectedly, some of the changes have had a huge impact on the way that man lives life. One of the changes in the world that has a strong bearing on man’s life is globalisation, it helped change the way man consumer’s products and interacts with his surroundings. Globalization is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture (Al-Rodhan, 2006). Advances in transportation, such as the steam locomotive, steamship, jet engine, and container ship, and in telecommunications infrastructure, including the rise of the telegraph and its modern offspring, the Internet, and mobile phones, have been major factors in globalization, generating further interdependence of economic and cultural activities (Albrow,1990). The concept of globalization 'emerged from the intersection of four interrelated sets of "communities of practice": academics, journalists, publishers/editors, and librarians (Paul,2014). In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge(IMF,2000). Further, environmental challenges such as global warming, cross-boundary water and air pollution, and over-fishing of the ocean are linked with globalization (Bridges,2002). Globalizing...
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...A Tale of Two Londons Who really lives at One Hyde Park, called the world’s most expensive residential building? Its mostly absentee owners, hiding behind offshore corporations based in tax havens, provide a portrait of the new global super-wealthy. BY NICHOLAS SHAXSON Up until the 18th century, Knightsbridge, which borders genteel Kensington, was a lawless zone roamed by predatory monks and assorted cutthroats. It didn’t come of age until the Victorian building boom, which left a charming legacy of mostly large and beautiful Victorian houses, with their trademark white or cream paint, black iron railings, high ceilings, and short, elegant stone steps up to the front door. This will not be the impression a visitor now gets as he emerges from the Knightsbridge subway station’s south exit. He will be met by four hulking joined-up towers of glass, metal, and concrete, sandwiched between the Victorian splendors of the Mandarin Oriental Hotel, to the east, and a pretty five-story residential block, to the west. This is One Hyde Park, which its developers insist is the world’s most exclusive address and the most expensive residential development ever built anywhere on earth. With apartments selling for up to $214 million, the building began to smash world per-square-foot price records when sales opened, in 2007. After quickly shrugging off the global financial crisis the complex has come to embody the central-London real-estate market, where, as high-end property consultant...
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...BUSA 3000 The Turks and Caico Islands: More Than a Getaway Offshoring can be defined as the practice of moving employees or certain business activities to foreign countries as a way to lower costs and avoid taxes. In most recent years, offshoring has become extremely popular worldwide. Arguably one of the most dominate places for offshoring, Turks and Caicos has made offshoring one of its key sources of income. Turks and Caicos is not only one of the most beneficial places for businesses to offshore, but is also a leading contender in offshoring when compared to prominent countries. The Turks and Caicos Islands offer far more than sunshine, an easygoing lifestyle, and friendly residents. In recent years, these Caribbean islands have definitely established a reputation in the world for offshoring. For some time now, I have heard how magnificent this island was, but never had thought to look more in detail about it. As a British Overseas Territory, the Turks and Caicos Islands comprise an archipelago of eight main islands in two groups. Turks is to the east, Caicos is to the west, and has number of smaller cays as its surrounding neighbors (International Business). The foundation of Turks and Caicos’ economy are tourism, the offshore industry and the fishing industry (International Business). The Government encourages tourism because it pulls in more than 1,000,000 visitors a year. One can only imagine the amount of revenue gained from tourist alone. If tourists contribute...
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...Tax Havens pull up socks in ‘transparency’ era The great ‘subprime’ crisis has had its share of fallouts over past 24 months; yet there is a silver lining emerging from under the dark clouds which has the world order gearing up for a brand new era of financial discipline and enhanced regulation. Ironically, one of the positives borne out of the recent economic upheaval has been staggering focus on ensuring robust transparency standards in tax matters. Before delving further into how tax transparency and information exchange are critical for sorting financial disorder across economies, let me try and explain the concept of ‘money laundering’ and how the absence of strict standards in tax discipline have abated this menace. This also helps putting in perspective the role that the international tax policy, in tandem with other non-tax measures, plays in combating tax evasion, whether with or without aid of money laundering. What’s the color of money!! Money laundering is loosely used to describe ‘washing’ of unaccounted or illicitly sourced money through a cobweb of complex financial transactions, usually involving more than one jurisdiction. The objective of the process deployed to ‘clean’ the money is to hide either the ownership or the destination of such funds. A typical ‘laundering’ scheme could see three stages: a) Placement stage – at this stage, the objective of stakeholders is to move the illicit funds away from source location; sources of such funds can be...
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...The Malaysia Goods and Services Tax (GST) Royal Malaysian Customs Department (2013) state that the government does implement the GST is because the existing consumption sales tax is unsatisfactory. There are also a reduction in the rate other taxes is sought. The existing tax system has not kept pace with the development of the economy. This is because they want to avoid tax cascading, multiple taxation and transfer pricing bias (Ministry of Finance Malaysia, 2014). Next, when they want to enhance tax compliance as well as to reduce tax avoidance and tax evasion, they have to avoid the issue of transfer pricing and value shifting. Then, they want to implement self-policing, lessen the bureaucratic red tape(Ministry of Finance Malaysia, 2014). Moreover, they want to lower the administrative cost and to enhance Malaysia’s competitiveness and to improve efficiency, Prices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supplies chain. This will strengthen our export industry, helping the country progress even further (Ministry of Finance Malaysia, 2014). Thus, the GST will enhance the capability, effectiveness and transparency of tax administration and management. In addition, it will help the government find new sources of revenue. Malaysia Goods and Services Tax (GST) Royal Malaysian Customs Department 2013, Why GST?, Malaysia Goods and...
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...OFF SHORE FINANCIAL CENTRES Commercial Law Irene González Campos ZAGREB SCHOOL OF ECONOMICS AND MANAGEMENT Content DEFINITION 3 HISTORY 3 CHARACTERISTICS 4 REGULATION 5 CONCLUSION 6 References 7 DEFINITION First of all, it needed to be said that a financial centre is defined as a city or district that has a heavy concentration of financial institutions, that offers a highly developed commercial and communications infrastructure, and where a great number of domestic and international trading transactions are conducted (Business Dictionary, n.d.). London, New York, and Tokyo are the world's premier financial centres. It may be distinguish two types of financial centres: those such as London or New York, which are ‘international financial centres’ and which are excluded from the definition of extraterritorial centres. These latest are called ‘Offshore financial centres’, where the activity takes place outside the residence of the natural person. Despite its name, the off-shore centres are not necessary islands, although several insular jurisdictions have been established as such. First of all, an off-shore centre is a small, law-taxes jurisdiction specializing in providing corporate and commercial services to non-resident offshore companies, by offering: i) Liberal legislation regarding financial transaction ii) Very low taxes rates Therefore, off shore companies are those legal entities incorporated and registered in an offshore financial centre...
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...Ernst & Young EXECUTIVE SUMMARY Ernst & Young commonly referred as EY, is one of the Big Four professional services firms along with Deloitte, PricewaterhouseCoopers and KPMG Ernst & Young is a multinational professional services firm headquartered in London, United Kingdom and was the third largest professional services firm in the world by aggregated revenue in 2012. The firm has employed 167,000 people and has more than 700 offices across more than 140 countries, providing assurance (including financial audit), tax, consulting and advisory services. In FY 2012, EY earned a record of $24.4 billion USD in revenue, ranking the third among the Big Four, after PricewaterhouseCoopers and Deloitte, ahead of KPMG. Ernst & Young offers its services to companies in a vast range of industries, including asset management, life sciences, mining, media and entertainment, retail, technology, and hotel and leisure. The company's financial reporting segment offers an IFRS/GAAP comparison so companies can compare and contrast the international and US accounting standards. The group's members firms are organized in four geographic areas: Europe, the Middle East, India, and Africa; the Americas (including Ernst & Young LLP); Japan; and the Asia/Pacific region. Ernst & Young is increasingly focused on the emerging markets, which have seen more rapid economic recovery than the developed nations. The company sees the trend of growth in the emerging markets as one that...
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...offers lower tax rates and other tax features. It is designed to attract domestic and foreign investors seeking an opportunity to game the tax code and maximize profits. The Canada Revenue Agency has defined Tax Havens as jurisdictions with no tax, or very low rates of taxation; strict bank secrecy provisions; a lack of transparency in the operation of its tax system, and a lack of effective exchange of information with other countries. As shown in (Desai, Foley, and Hines Jr 2004), examples of such Tax Havens include Ireland, Luxembourg, Singapore, and various Caribbean island nations in America. According to Tax Justice Networks 2012 report, approximately USD $21 trillion to $32 trillion is sheltered from taxes in unreported Tax Havens worldwide. Canada has suffered tax revenue loss of $7.8 Billion annually as a result of Tax Havens (Canadians for Tax Fairness [CTF], 2013). In 2007, US president Barack Obama and his Senators C.Laevin and N.Coleman noted “Offshore Tax Havens have declared economic war on honest U.S. taxpayers”. Apple is among 82 of the top 100 publicly traded U.S. companies that operate subsidiaries in Tax Haven jurisdiction as of 2012 (U.S.PIRG, 2012). Every dollar in taxes that MNCs and top tier wealthy individuals avoid by using Tax Havens must be balanced by those honest taxpayers paying higher taxes. Every contribution in tax is reflected in our infrastructure, health system, public safety, school, and other essential services provided by government...
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...EXCHANGE ON INFORMATION AND ITS AD 1. BRIEF OVERVIEW ON NEED OF EXCHANGE OF INFORMATION & ITS MEANING: 1.1 With the increase in cross border transactions in the era of globalised world there has been increase in the number of cases tax evasion & avoidance. The problem of tax evasion in developing countries is therefore exacerbated, where evasion even by a wealthy few can have a comparatively large impact. The revenue needs of developing countries, in combination with the severity of corruption, tax evasion and fraud in many developing countries, highlight the importance of increasing global transparency concerning the location of untaxed wealth. Globalization and the liberalization of economic activity, resulting in the exponential increase in cross border commercial and financial transactions, has in effect converted the private sector into a world without borders. This has created a major problem for national tax authorities because globalization in the private sector has not been accompanied by similar changes in the reach and enforcement powers of national tax authorities. 1.2 In confronting the impact of globalization and liberalization of economies, national tax authorities face several problems. Some of them are...
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...LEG 500 WEEK 2 DISCUSSION A+ Graded Tutorial Available At: http://hwsoloutions.com/?product=leg-500-week-2-discussion Visit Our website: http://hwsoloutions.com/ Product Description PRODUCT DESCRIPTION LEG 500 Week 2 Discussion, Analyze the duty of loyalty in whistleblower case to determine to whom loyalty is owed and shows the greater duty of loyalty. Support your analysis with specific examples. Then suggest at least one change to an existing law. The duty of loyalty in the case of Milton v. IIT Research Institute did not lie upon Dr. Donn Milton. Dr. Milton had no legal duty to his claims of reporting tax fraud to IITRI’s Board of Directors. Dr. Milton was not responsible for correcting IITRI’s tax filings nor did he face potential liability for failing to disclose this information (Halbert & Ingulli, p.48.) Dr. Milton’s job was to supervise administration on a contract between IITR and the federal government called the Tax Systems Modernization Institute (TSMI) (Federal 4th Circuit, 1998.) Analyze the duty of loyalty in whistleblower case to determine to whom loyalty is owed and shows the greater duty of loyalty. Support your analysis with specific examples. Then suggest at least one change to an existing law. The duty of loyalty in the case of Milton v. IIT Research Institute did not lie upon Dr. Donn Milton. Dr. Milton had no legal duty to his claims of reporting tax fraud to IITRI’s Board of Directors. Dr. Milton was not responsible for correcting IITRI’s...
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...Research & Collection of information on EY History of the company Origins of EY Switzerland: * Founded in 1917 in Basel as "Verwaltungs-, Revisions- und Treuhand AG". * The idea of former the company came from Basler Handelsbank, which was the company owner * EY helped the bank to gain more exact information about the credit standing of their clients * Renamed Allgemeine Treuhand AG" (ATAG) – a name which shaped the Swiss auditing and advisory services industry throughout the 20th century * In 1945, Basler Handelsbank was taken over by Swiss Corporation and the former Chairman of the ATAG board, Dr. Manfred Hoessly, succeeded in acquiring the majority of the company's shares, thus enabling ATAG to build its reputation as an independent auditing company * In 1960, ATAG decided to join forces with global auditors Arthur Young & Company, New York, and set up a company specializing in the auditing of US companies in Switzerland * In 1964, ATAG became a member of the “Arthur Young & Company International” corporate group (includes the Swiss know-how as well that contributes to the growth and development of the company) * In 1989, Arthur Young International and Ernst & Whinney International merged to create EY, renamed “ATAG EY AG” in 1991 and in 2000, “EY AG” * In 2008, the next major step in the firm’s international integration is when EY Switzerland combined with 90 country practices from Europe, the Middle East, India and Africa...
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...the loss of revenue resulting from multinational companies moving into other jurisdictions, most particularly tax havens, to lower their overall rates of tax, what are some of the measures that can be adopted to prevent such revenue loses? A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate. This is another important technique where the multinational companies can reduce their tax liability. If a company wants to expand and conduct their business in the country where the tax rate is very low or no tax rate, then they can reduce their tax liability to zero or very minimal amount. Tax havens are an internal fight as tax jurisdiction is an integral part of sovereignty and with this in mind, we should consider the measures usually used by states in order to prevent the use of tax havens: general avoidance provisions, the establishment of foreign exchange control and mandatory withholding of tax on transfers abroad, the creation of provisions against base companies, specifically by attributing income earned by such companies to the resident partners who control them, as well as the introduction of legislative giving powers to the tax authorities to adjust taxable profit by reason of special relations with another taxpayers. Tax havens make it more expensive for developing countries to collect taxes, lead to inefficient use of resources, undermine...
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...THE HONG KONG POLYTECHNIC UNIVERSITY AF5206 HONG KONG TAX FRAMEWORK Unit 14 – Anti-avoidance Provisions Coverage 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Tax avoidance and Tax evasion Principles of anti-avoidance rules Anti-avoidance provisions in IRO Section 61 Section 61A Doctrine of fiscal nullity Section 20 Section 61B Section 39E Section 9A (Type I service company arrangement) Type II service company arrangement Advance Ruling Tax planning and ethical issues Basic tax planning principles Basic techniques of tax planning 1 TAX AVOIDANCE AND TAX EVASION Tax avoidance - Attempt to obtain tax benefit (i.e. reduction, elimination or postponement of tax) by legal means Tax evasion - Failure on the part of taxpayer to supply full and correct information relevant to an assessment of tax because of deliberate attempt or negligence - An offence punishable by a fine and/or imprisonment 2 PRINCIPLES OF ANTI-AVOIDANCE RULES Westminster principle - “Every man is entitled if he can, to order his affairs so that tax attaching under the appropriate Act is less than it would otherwise be.” [Lord Tomlin in IRC v. Duke of Westminster (1935)] Choice principle - Established in Australian case law 2014 MPA_U14 Anti-avoidance.doc 1 August 2014 - Taxpayers are free to create favourable situations which will attract tax consequences for which the legislation specifically provides - If the legislature confers a choice on the taxpayer so as to whether or not...
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