What next for global tax reform?

Head of IMF says it’s time to think outside the box on global taxHead of IMF says it’s time to think outside the box on global tax

The head of the International Monetary Fund (IMF), Christine Lagarde, has advised governments to start thinking ‘outside the box’ on global tax issues. At the same time, she cautioned against proposals by British-based charity Oxfam to create a UN global tax body which might face insurmountable challenges. The Panama Papers raised concerns all over the world about the tax-avoidance strategies of multinational companies and many – including US president Barack Obama – to call for international tax reform. The creation of an intergovernmental tax body seems unlikely because of the unwillingness of nation states to surrender their tax powers. Read more…

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EU announces crackdown on tax avoidance

EU to force multinationals to disclose country-by-country profits and tax arrangementsEU to force multinationals to disclose country-by-country profits and tax arrangements

Following the publication of the Panama Papers there’s a growing call for increased transparency in the tax affairs of politicians and multinational companies. With this in mind, European Union (EU) regulators have recently announced proposals to make multinationals disclose profits earned and taxes paid in Europe’s 28 member states, as well as in tax havens. The new rules will affect all corporations with a significant presence in Europe and will put high-profile companies like Apple and Starbucks back into the spotlight over the issue of taxes. Read more…

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Is the US tax friendly or is it a tax haven?

Super-rich Americans using US laws to create on-shore tax havenUS companies avoiding tax with on-shore shell companies

Only a couple of hundred US accounts have emerged as Mossack Fonseca clients in the Panama Papers leak. It’s not that Americans have a bigger sense of obligation towards paying taxes but because for many it’s easier to create a shell company in the US rather than overseas. A limited liability company (LLC) can be incorporated in every US state without disclosing its beneficiary. In fact in a Tax Justice Network 2015 ranking of tax havens, the US occupies the number three slot, behind only Switzerland and Hong Kong. Read more…

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Lifestyles of the rich and famous exposed in the Panama Papers

panama papersBiggest-ever leak causes political fall-out across the globe

The secret wealth of some of the world’s highest-profile politicians and celebrities has been unceremoniously unmasked in the biggest information leak in history. Millions of documents obtained from law firm Mossack Fonseca – collectively known as the Panama Papers – has demonstrated how the rich and famous take advantage of international fiscal havens to avoid paying tax and to mask their commercial activities. Read more…

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Are we heading towards a cashless economy?

Cashless could be on the cards as banks weigh up the pros and consCould cash become obsolete?

We’ve all become more wedded to plastic as advancements in technology allow us to pay for everything from a breakfast muffin to a wide-screen TV with a credit card. But the idea of a cashless economy seems unthinkable. Central banks are evaluating the situation, though, to enable them to exert more control over economic recovery measures. It’s no good establishing QE and negative interest rates to stimulate the economy if people hoard cash instead. Read more…

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What’s a Brexit and what would it mean for the US?

How does speculation over Britain’s potential exit from the EU affect the US?British exit from EU could affect US markets

Brexit is a term that may well be unfamiliar to many Americans, although there could be repercussions down the line, should the UK vote to leave the EU in the June referendum. Britain’s prime minister David Cameron has been trying to renegotiate key agreements with the EU to improve its position within the union. But with US interests closely connected to those of the UK and the outcome of the vote far from certain, it’s worth paying attention to proceedings. Read more…

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Is the honeymoon period over for tech companies?

Tech companies forced to face up to responsibilitiesTech companies forced to face up to responsibilities

For a long time, technology companies have basked at the top of the commercial hierarchy. Software giants such as Microsoft who’ve come to prominence as a result of the innovation of their geeky founders, making money as if they were printing it and pushing their tech agenda to number one position on the cool list. The workaday compliance issues, environmental problems and industry regulations that hound other, less glamorous, sectors haven’t wiped the gloss of this one, until now. Read more…

 

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Why are ex-pat Americans giving up their passports?

Why are ex-pat Americans giving up their passports?Growing numbers of Americans are renouncing US citizenship

According the US Treasury, increasing numbers of Americans are renouncing their citizenship. One of the main reasons for this seems to be Fatca (the Foreign Account Tax Compliance Act), a citizen-based taxation system introduced in 2012. The law is aimed at taxing wealthy Americans and requires citizens to file a tax return, no matter where in the world they live. It also means some people are liable to pay US taxes on top of those required by their country of residence. Read more…

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Negative interest rates deployed by Bank of Japan

Negative interest ratesBank of Japan introduces negative interest rates to boost economy

In a bid to shake the economy out of its stalemate, the Bank of Japan has introduced negative interest rates. In theory, the 0.1% rate should encourage lending and begin to turn the tide of deflation. In practice, because banks and other lenders will, in effect, be charged for hoarding deposits, they ought to be more inclined to lend to businesses and consumers and, in turn, promote spending and business investment. It’s the latest in a raft of initiatives designed to boost commercial confidence and support Japan’s plans to move inflation towards its 2% target. Read more…

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How much tax is enough?

How much tax is enough?Large corporates face stiffer tax penalties as governments crack down on avoidance

Benjamin Franklin’s twin certainties – death and taxes – are becoming things to avoid in the 21st century, at least by large corporations who use every trick in the book to reduce their tax liability. Legal it may be, but consensus is gathering, in Europe at least, to overhaul the international tax system, in the wake of several prominent cases in which multi-national companies are felt to be dodging their tax obligations to member states. Google is in the firing line at the moment. After years of negotiation, the company has finally agreed a £130m deal with British tax authorities to pay some back taxes and bear a greater tax burden in future. But is it enough? Read more…

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