More than 130 countries and jurisdictions have now signed up in principle to outline proposals to reform international corporate tax rules. These proposals—and in particular, the global minimum corporate-tax rate envisaged—would represent the biggest change for a century. But the reforms, now driven by the United States under Joe Biden, are also proving highly divisive, globally and within the European Union. That has potentially important implications for the tax rules and EU-US relations.
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The long and winding road to global corporate tax justice – Alex Cobham
Showing posts with label Tax System. Show all posts
Showing posts with label Tax System. Show all posts
12/29/13
Taxation France:: French ‘millionaire’s tax’ given constitutional green light
France’s Constitutional Council gave the green light on Sunday to a ‘millionaire’s tax’, to be levied on companies that pay salaries of more than 1-million euros (US$1.38-million) a year.
The measure, introduced in line with a pledge by President Francois Hollande to make the rich do more to pull France out of crisis, has infuriated business leaders and soccer clubs, which at one point threatened to go on strike.
It was originally designed as a 75 percent tax to be paid by high earners on the part of their incomes exceeding 1 million euros, but the council rejected this, saying 66 percent was the legal maximum for individuals.
The Socialist government has since reworked the tax to levy it on companies instead, raising the ire of entrepreneurs.
Under its new design, which the Council found constitutional, the tax will be an exceptional 50 percent levy on the portion of wages exceeding 1 million euros paid in 2013 and 2014.
Including social contributions, its rate will effectively remain roughly 75 percent. The tax will, however, be capped at 5 percent of the company’s turnover.
Read more: French ‘millionaire’s tax’ given constitutional green light - The Globe and Mail
The measure, introduced in line with a pledge by President Francois Hollande to make the rich do more to pull France out of crisis, has infuriated business leaders and soccer clubs, which at one point threatened to go on strike.
It was originally designed as a 75 percent tax to be paid by high earners on the part of their incomes exceeding 1 million euros, but the council rejected this, saying 66 percent was the legal maximum for individuals.
The Socialist government has since reworked the tax to levy it on companies instead, raising the ire of entrepreneurs.
Under its new design, which the Council found constitutional, the tax will be an exceptional 50 percent levy on the portion of wages exceeding 1 million euros paid in 2013 and 2014.
Including social contributions, its rate will effectively remain roughly 75 percent. The tax will, however, be capped at 5 percent of the company’s turnover.
Read more: French ‘millionaire’s tax’ given constitutional green light - The Globe and Mail
12/1/13
The Netherlands - while poor segments of Dutch population suffer Government still legally allowing 20,000 letter-box companies to circumvent taxation
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| The Netherlands harboring more than 20.000 letter box companies |
A White House factsheet in 2009 reported. "Nearly one-third of all foreign profits reported by US corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands, and Ireland."
Like the Queen in Shakespeare's 'Hamlet' who protested that 'The lady doth protest too much, methinks,' the Dutch government hypocritically objected to the Netherlands being dubbed "a tax haven" and the White House agreed and deleted the line.
The Dutch tax haven, has now more than 20,000 letter-box companies and in recent years even Facebook joined U2, the popular Irish rock group, to circumvent the tax system..
The Netherlands also hosts thousands of foreign financial vehicles. Bloomberg reports that a bookkeeper’s home office in Amsterdam also doubles as the headquarters for a Yahoo! Inc. offshore unit.
It is a scandal that deficit-strapped Holland is raising retirement ages and taxes on the working classes while the Netherlands’ Government of PM Rutte and coalition partner Samson continues to allow their country to be a €10.2trillion conduit on the global tax-avoiding network.
Bloomberg says that attracted by the Netherlands’ lenient conservative policies and and an extensive network of tax treaties, companies such as Yahoo, Google, Merck & Co and Dell have moved profits through the Netherlands
Using techniques with nicknames such as the “Dutch Sandwich,” multinational companies routed €10.2trillion in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank. Such units often only exist on paper, as is allowed by Dutch law.
Google, IBM and Italian oil and gas group ENI head the list of companies using letter-box companies to cut their Dutch tax bills to between 0 and 5%, the Volkskrant daily said in an article.
According to theDutch Financieele Dagblad , French state companies are also among those using the Netherlands to cut their tax bills.
In the meantime the Dutch Governmen has been dancing around the subject.
Frans Weekers, Dutch deputy finance minister, said the controversy over the letterbox companies had damaged the Netherlands’ investment climate. “Over the past 10 years the trend has been for the number of letterbox companies in the Netherlands to keep growing. I want to turn that trend around,” Weekers told The Financial Times. “I see the Netherlands being portrayed in a bad light. I don’t want to be portrayed in a bad light."
Recently the Dutch government said tax treaties with Zambia and 22 other poor countries will be revised to allow the incorporation of anti-abuse clauses where necessary, but has not said a word about the major players which have letter box companies registered in the Netherlands and are involved in these tax evading schemes
The European Commission has now said it will attempt to close a loophole that allows companies to cut their tax bill, a top official said on Monday, but the EU executive will first need to persuade member countries to back the change.
The commission wants rules to prevent companies setting up “letter-box subsidiaries” in countries solely to qualify for a softer tax regime and cut their bill.
Algirdas Semeta, the EU’s taxation commissioner, wants to insert an anti-abuse clause by the end of next year, allowing authorities to target artificial “parent-subsidiary” schemes that flout the spirit of the tax code.
“When our rules are abused to avoid paying any tax at all, then we need to adjust them,” he said. “Today’s proposal will ensure that the spirit, as well as the letter, of our law is respected.”
Semeta declined to name countries or companies that exploited the loophole but said that billions of euros were at stake.
EU-Digest
In the meantime the Dutch Governmen has been dancing around the subject.
Frans Weekers, Dutch deputy finance minister, said the controversy over the letterbox companies had damaged the Netherlands’ investment climate. “Over the past 10 years the trend has been for the number of letterbox companies in the Netherlands to keep growing. I want to turn that trend around,” Weekers told The Financial Times. “I see the Netherlands being portrayed in a bad light. I don’t want to be portrayed in a bad light."
Recently the Dutch government said tax treaties with Zambia and 22 other poor countries will be revised to allow the incorporation of anti-abuse clauses where necessary, but has not said a word about the major players which have letter box companies registered in the Netherlands and are involved in these tax evading schemes
The European Commission has now said it will attempt to close a loophole that allows companies to cut their tax bill, a top official said on Monday, but the EU executive will first need to persuade member countries to back the change.
The commission wants rules to prevent companies setting up “letter-box subsidiaries” in countries solely to qualify for a softer tax regime and cut their bill.
Algirdas Semeta, the EU’s taxation commissioner, wants to insert an anti-abuse clause by the end of next year, allowing authorities to target artificial “parent-subsidiary” schemes that flout the spirit of the tax code.
“When our rules are abused to avoid paying any tax at all, then we need to adjust them,” he said. “Today’s proposal will ensure that the spirit, as well as the letter, of our law is respected.”
Semeta declined to name countries or companies that exploited the loophole but said that billions of euros were at stake.
EU-Digest
11/19/13
France: French PM announces plan to simplify tax system
French Prime Minister Jean-Marc Ayrault said on Monday he wanted to simplify the tax system, announcing a consultation process with the aim of proposing a broad tax reform to parliament by 2015.
The Socialist government has suffered criticism over tax increases introduced to shore up public finances, with business leaders saying an excessively complex and costly system is driving away investors.
"I think the time has come for a transparent overhaul of our tax system," Mr Ayrault told Les Echos business daily. "The objective is to come up with rules that are fairer, more efficient and easier to understand." "This overhaul will obviously require in-depth dialogue. I will meet all social partners in the coming days," he said, referring to business groups and labour unions.
Frustration over tax and unemployment stuck at 11 per cent, have dragged President Francois Hollande's approval rating to 20 percent, the lowest score for a postwar president, an Ifop poll showed.
A planned tax on heavy road transport provoked violent protests in western France where demonstrators torched toll gates, leading Mr Hollande to suspend the policy.
Read more: French PM announces plan to simplify tax system
The Socialist government has suffered criticism over tax increases introduced to shore up public finances, with business leaders saying an excessively complex and costly system is driving away investors.
"I think the time has come for a transparent overhaul of our tax system," Mr Ayrault told Les Echos business daily. "The objective is to come up with rules that are fairer, more efficient and easier to understand." "This overhaul will obviously require in-depth dialogue. I will meet all social partners in the coming days," he said, referring to business groups and labour unions.
Frustration over tax and unemployment stuck at 11 per cent, have dragged President Francois Hollande's approval rating to 20 percent, the lowest score for a postwar president, an Ifop poll showed.
A planned tax on heavy road transport provoked violent protests in western France where demonstrators torched toll gates, leading Mr Hollande to suspend the policy.
Read more: French PM announces plan to simplify tax system
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