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SnowdonConsultants.com
List of Tax Havens:
Anguilla, Andorra, Antigua, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands,
Costa Rica, Cyprus, Delaware, Dubai, Eire, Gibraltar, Grenada, Guernsey, Hong Kong, Isle of Man, Jersey, Labuan,
Lichtenstein, Luxembourg, Madeira, Malta, Mauritius, Monaco, Seychelles, St.Kitts & Nevis, St.Vincent, Switzerland,
Turks & Caicos Islands, Vanuatu
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UK rebate - Brussels wants to reduce it! |
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UK
burden...The UK already pays a lot
more to the EU than it gets in return, and the bureaucrats in Brussels still
want more! What are the "benefits" of being part of the EU again?:
...leaked documents from the European Commission reveal plans to end the UK's
special budget rebate and make London the biggest net contributor to EU funds.
...paying 0.51 percent of its GDP, compared to 0.35 and 0.31 percent for Italy
and France respectively. The idea of losing the three billion euro rebate -
famously won by the then prime minister Margaret Thatcher in 1984 - will cause
great concern in London. Current prime minister Tony Blair has vowed to defend
the rebate and he knows that if Brussels is seen to be taking money back from
the British taxpayers, his battle to win over a sceptical public on the European
Constitution will be even harder.
Original article
Swiss secrecy
The Swiss have agreed with Brussels that they will provide
legal assistance in cases relating to indirect taxation such as customs, VAT,
and alcohol / tobacco levies, but will be exempted from providing such
assistance in cases involving direct taxation. There may have to be a referendum
on the matter, the result of which could revoke the provisional agreement.
Most dependent territories have agreed to adopt the terms of
the Savings Tax Directive, but The Caymans Islands took their protest to the
European Court and appealed to the United Kingdom government for concessions to
compensate for potential loss of business arising from the application of the
new EU regulations, although the jurisdiction has since agreed to accept the
terms of the Directive.
Not committed..
The following jurisdictions, which have not yet made
commitments to transparency and effective exchange of information, have been
identified by the OECD's Committee on Fiscal Affairs as uncooperative tax havens
, Liberia, The Republic of the Marshall Islands, The Principality of Monaco.
The directive also extends far beyond European shores to the
Caribbean dependent territories of the United Kingdom and the Netherlands
including Anguilla, Aruba, British Virgin Islands, the Cayman Islands, the
Netherlands Antilles and Turks & Caicos, where the new initiative hasn't been
greeted at all well by the offshore world.
The USA Federal Budget includes $50 million that American taxpayers send each
year to the OECD. The OECD is focused on higher taxes around the world via their
project to stamp out "harmful tax competition."
Sometimes referred to as the Detroit of Europe, though the Hong Kong of Europe
might be more appropriate, Deutsche Welle recently labelled Slovakia
as "A Monaco on the Danube". With a flat rate of 19% tax, Slovakia leads the EU
low-tax competition and attracting foreign investors' eyes. Recently,
south Korean car and appliance maker, Hyundai, chose Slovakia for a huge car
factory. The President of the Centre for the New Europe in Brussels, recently
re-visited Slovakia and came back most enthusiastic. Said Evans: "The Slovak
economy is doing well. Growth is well over 4% and unemployment is coming down
steadily. Whilst the traditional liberal centres such as Bratislava are doing
very well, wealth creation is also clearly permeating the villages and rural
areas. With a low flat tax, booming manufacturing, and it's service sectors,
Slovakia is justified in its reputation of being the new Hong Kong of Europe."
original article
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EU SAVINGS TAX DIRECTIVE
July 2004
What is it?
Summary of the Directive's planned scope
The EU Savings Tax Directive, first proposed back in 1997,
was planned to come into effect on 1st January, 2005, applying mainly to bank
deposits of individuals - the obligation being for banks within the EU to deduct
a with-holding tax, on interest paid, at source.
The tax rate will probably start at 15% climbing to 30% where an EU citizen is
tax resident (or deemed tax resident) of one EU country and has money on deposit
in a bank within another EU country's jurisdiction. It is important to note
"jurisdiction" as the bank does not need necessarily to be in the EU itself.
There are ongoing discussions with Switzerland and others and the Directive are
not finalised as yet but you can be sure that tax changes are coming. We are
recommending that EU tax residents with "offshore bank deposits" consider their
respective situation carefully and seek professional assistance or advice.
Switzerland, also Andorra, Monaco, San Marino and Liechtenstein have all agreed
to put in place equivalent measures to those to be applied by the EU's Member
States regarding the taxation of income from savings.
The EU planning is based on the need for a co-ordinated action to tackle
"harmful" tax competition. The OECD was started at around the same time. In
1998, a "co-existence" model was put forth, requiring each Member State to
either operate a with-holding tax or provide information on savings income to
other Member States, or to operate both systems.
Under the terms of the Directive
as finally adopted :
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All Member States will ultimately
be expected to automatically exchange information on interest payments to
non-resident individuals. All Member States, except Belgium, Luxembourg and
Austria, will immediately introduce a system of information reporting. These
three countries will be entitled to receive information from the other Member
States.
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The Directive will apply from 1
January 2005, provided that agreements with certain third countries
(Switzerland, Andorra, Liechtenstein, Monaco and San Marino), for equivalent
measures and with Member States
dependent or associated territories for the
same measures or the same as those applied by Belgium, Luxembourg and Austria
(see next paragraph), will apply from that same date.
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Belgium, Luxembourg and Austria
will introduce a system of information reporting at the end of a transitional
period, during which they will levy a withholding tax at a rate of 15% for the
first three years and 20% for the following three years and 35% thereafter. They
will transfer 75% of the revenue of this tax to the investor's state of
residence.
Belgium, Luxembourg and Austria
will implement automatic exchange of information:
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if and when the EC enters into an
agreement by unanimity in the Council with Switzerland, Liechtenstein, San
Marino, Monaco and Andorra to exchange of information upon request as defined in
the OECD Agreement on Exchange of Information on Tax Matters (as developed by
the OECD global forum working group on effective exchange of information in
2002) in relation to interest payments, and to continue to apply simultaneously
the withholding tax and
Tax avoidance
The tax system agreed thus far by the recent Ecofin meeting would ensure that EU
residents are taxed on the interest earned on their savings, regardless of where
in the EU their money is deposited.
Currently, many EU residents deposit their savings with banks in Luxembourg
because the Grand Duchy there operates a policy of secrecy similar to that of
Switzerland. Luxembourg will not reveal details about these bank accounts to tax
inspectors from other EU countries.
Since the savers will only have to pay tax on the interest from their savings,
if they are honest persons they will declare it all to the tax authorities in
the country where they live, scope for abuse of the system therefore exists.
Luxembourg's objection
Luxembourg has long been dependent on its banking business, and consequently
fears any "Brussels" legislative changes that may cause that business to
diminish, it is therefore fighting hard against the European Savings Tax
Directive. Some analysts say that such a tax system within the EU would lead to
a flight of capital into non-EU principalities where bank secrecy is maintained,
an argument the Grand Duchy applies.
The Savings Tax mechanism
The mechanism recently agreed by ministers is based on a 15% with-holding tax on
savings income during the first three years, rising to 20% for the remainder of
a 10-year transition period.
The country applying the tax would retain 25% and pay 75% of the amount to the
EU country where the saver lives / works.
After 2010, when the transition period is over, savers will be taxed by the
country in which they live, regardless of where they keep their savings.
By 2010, it is anticipated that standards would be in place for the exchange of
information among EU tax authorities, part of the Agreement reached.
The affect on EU residents
They will need to learn the difference between residence and domicile. It may be
the case that a person is 'temporarily' working abroad, with every intention
that he/she will return 'home' at the end of his/her contract of/for services.
As an example, a British person may currently be deemed to be a 'non-UK
resident' for tax purposes, and accordingly not have any liability to UK taxes,
but may not necessarily absolve him/her, or his/her Bank from making statutory
income tax returns of earnings, or income [deposit interest earned abroad], just
because he/she has been out of the UK for most of the fiscal year.
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Capitol flight?
First signs?
Research conducted by accounting firm KPMG has found that one third of private
banking institutions are planning acquisitions in the next three years, with the
Asia Pacific region identified as a particular hot spot as bankers look
to escape increasing tax and legal burdens in Europe and USA. |
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What is the
OECD?
OECD stands for Organisation for Economic Co-operation and Development,
based in Paris, it comprises 30 countries which share a commitment to democratic
government and the market economy.
What is the
FATF?
FATF stands for Financial Action Task Force on Money Laundering and is a
department within the OECD, also based in Paris, and was founded in 1989.
What is the CFATF?
CFATF stands for Caribbean Financial Action Task
Force being an organisation
of thirty states of the
Caribbean Basin, which have agreed to implement common counter-measures to
address the problem of criminal money laundering and the financing of terrorism.
It was established as the result of meetings convened in Aruba in May 1990 and
Jamaica in November 1992.
Currently, CFATF members are Antigua & Barbuda, Anguilla,
Aruba, The Bahamas, Barbados, Belize, Bermuda, The British Virgin Islands, The
Cayman Islands, Costa Rica, Dominica, Dominican Republic, El Salvador, Grenada,
Guatemala, Guyana, Republic of Haiti, Honduras, Jamaica, Montserrat, The
Netherlands Antilles, Nicaragua, Panama, St. Kitts & Nevis, St. Lucia, St.
Vincent & The Grenadines, Suriname, The Turks & Caicos Islands, Trinidad &
Tobago, and Venezuela.
FATF Plenary Report
July, 2004
New Regulatory Approaches
In Paris, at the conclusion of its latest
Plenary, the Financial Action Task Force (FATF) reported that it is examining
new regulatory approaches to stem the flow of funds to terrorists.
"Since February, the FATF has worked closely with the IMF, World Bank,
FATF-style regional bodies and others, to ensure a common and consistent
approach to the evaluation of a country's AML/CFT regimes," President Norgren
said. Later this year, the FATF anticipates the launch of a new round of
evaluations using this new joint methodology with the IMF and World Bank to
assess compliance with FATF's Revised Forty Recommendations.
Non-Cooperative Countries and Territories
The FATF continues to use the NCCT list to demand that financial institutions
give greater scrutiny to transactions with persons, businesses, or banks in
listed countries or territories with inadequate anti-money laundering and
counter-terrorist financing infrastructure. Announced was the removal of
Guatemala from the FATF NCCT list. The countries remaining as designated NCCTs
are Cook Islands, Indonesia, Myanmar, Nauru, Nigeria and Philippines -- only six
of the 23 jurisdictions designated as NCCTs in 2000 and 2001.
"The NCCT process has been very successful in encouraging countries to take
necessary action to clean up their financial systems," said Mr. Norgren at the
Group's Plenary meeting in Paris.
No new jurisdictions have been reviewed since 2001. The FATF, however, continues
to monitor progress as a priority item at each Plenary meeting.
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The St Vincent and the
Grenadines International Financial Services Authority [IFSA] stated in
late May of this year that offshore agents will henceforth be able to
incorporate companies for their clients online. |
St.Kitts & Nevis
The international financial services sector really
commenced in Nevis in 1984. During the course of the following years, the Nevis
Island Government expended a lot of time and resources aimed at developing
recognised expertise in the financial services sector. The resulting effect is
that Nevis has become known as a viable, reputable jurisdiction from which to
incorporate international business companies, set up limited liability
companies, register international exempt trusts and establish offshore banking
institutions.
The official St.Kitts & Nevis website:
Link.
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Isle of Man and Malta - new markets
Recent changes in the regulatory structure of the e-gaming sector in the Isle of
Man and Malta have been successful in attracting some big name players to these
jurisdictions. |
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Conclusion
It remains to be seen quite how far this with-holding tax on
EU residents' bank interest on savings deposits will go. It is likely that most
EU residents will not be able to do much about it, and for the EU, any country
or countries which have lower tax rates will become very attractive potentially
causing a flight of capital out of the EU.
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