EU sides with Americans in Europe in fight against US tax schemes

For years the Accidental Americans Association (AAA) has battled to be exempt from a tax scheme imposed by the US requiring that all Americans file annual tax returns to the US Internal Revenue Service (IRS) - even when the person has not lived on US soil since they were a child.

In a letter addressed to US Treasury Secretary Steve Mnuchin, the EU Council - the union's main decision body - asked the US government to dilute costs for European residents who wish to renounce their American citizenship to avoid filing tax returns to the United States.

EU-Digest

EU-US Relations: Trump escalates fight over tax on tech giants - by Naomi Jagoda and Emily Birnbaum

The long-running fight between the U.S. and Europe over how to tax American tech giants is heating up.

The Trump administration on Monday proposed retaliating against France for a tax on digital services, floating $2.4 billion in tariffs, and Paris is vowing to hit back. 

The dispute is raising pressure on international negotiators to develop a framework for taxing tech companies whose businesses span the globe. But as the complicated talks unfold, the U.S. is threatening to launch more investigations.

 Read more at: Trump escalates fight over tax on tech giants | TheHill

EU probes Nike tax deals in the Netherlands

The EU on Thursday launched an in-depth probe into Nike's tax affairs in the Netherlands, following revelations in the "Paradise Papers" scandal that exposed low tax deals for multinationals.

The investigation of one of the world's most iconic brands, with its "Just Do It" moniker, follows a series of other tax probes targeting the Netherlands, including into Starbucks and Ikea.

A similar investigation of Apple's tax affairs in Ireland resulted in a order by Brussels that the iPhone maker repay Dublin an extraordinary 14.3 billion euros in back taxes.

The commission, the EU's powerful anti-trust enforcer, "will investigate carefully the tax treatment of Nike in the Netherlands, to assess whether it is in line with EU state aid rules," Competition Commissioner Margrethe Vestager said in a statement.

The investigation will try to determine whether a series of tax agreements over almost a decade gave Nike an "unfair advantage over competitors" in the Netherlands, she added.

The investigation will focus on two Dutch-based units of Nike that the EU suspects paid tax "that may not reflect economic reality", a statement said.

Read more: EU probes Nike tax deals in the Netherlands

The Ideal Nation State: Free Universal Health Care, Free Quality Education and a Fair Share Tax System-does it exist?

Sounds too far fetched - not at all.

When we look at Unversal Health care there are thirty-two of the thirty-three developed nations have universal health care, with the United States being the lone exception . The following list, compiled from WHO sources where possible, shows the start date and type of  system used to implement universal health care in each developed country .

Note that universal health care does not imply government-only health care, as many countries implementing a universal health care plan continue to have both public and private insurance and medical providers.

If we look at Free Quality education and live in a country where it is not free but costly, like in the US, or if you fail to qualify for fully-funded university scholarships, consider enrolling in universities that are tuition free or universities that charge low tuition fees. Countries like Finland, Austria, Norway, Germany, and Sweden offer different types of free/low tuition schemes for international students.

scholars4dev.com has compiled information and provided links to tuition-free Colleges and Universities in these countries.

According to studyinfinland.fi: There are currently no tuition fees charged in Finland, regardless of the level of studies and the nationality of the student however tuition fees for non-EU/EEA students will be introduced from autumn 2017 onwards for English-taught Bachelor’s or Master’s programmes. Doctoral level studies will remain free of tuition fees.

Updates concerning the forthcoming non-EU tuition fees and related new scholarships options can be found at www.studyinfinland.fi/tuitionfees2017.

Remember that even when there are no tuition fees, you still need to plan your finances – you are expected to independently cover all your everyday living expenses during your studies in Finland.

At the moment, scholarships there are mainly available only for Doctoral level studies and research.

There are now a number of Universities also offering online degrees/courses for free.  The first such University is University of the People which is a tuition-free, non-profit, accredited online university dedicated to opening access to higher education globally.  University of the People offers online Associates and Bachelors Degrees in Business Administration and Computer Science.

This was followed by an initiative of MIT and Harvard called edX which is a learning platform that gives students from any country the opportunity to take free online courses offered by three premier Universities in the US – Harvard, MIT, and UC Berkeley and about 50+ Universities and institutions.

Following this trend, Coursera was introduced which is an online learning platform that partners with the top universities in the world to offer online courses in many fields of study for anyone to take, for free.

Last but not least: which countries have a Fare Share Tax System? For the US one place to turn for factual information on who pays how much percent of the total in income taxes is a report posted on the American Spectator’s blog on May 6, 2015. The data come from 2014, and are reported by the Tax Policy Center, which is the creation of the Urban Institute and the Brookings Institution, two entities not known for right-wing sentiments. According to the IRS, in 2014 the top 1% of all income earners paid 45.7% of all federal income taxes, but earned 17.1% of all income in the U.S. The top 20% paid 83.9% of all federal income taxes, after earning 51.9% of all income in America. The middle 20% of income earners – who the American Spectator claims are the true middle class in America – paid 5.9% of all federal income taxes, but earned 14.8% of all income.

In Europe The EU Commission suggests that tax policy should be geared towards meeting more general EU policy goals. Tax policy must contribute to achieving the goal established at the Lisbon European Council of March 2000 and confirmed at the Stockholm European Council in March of this year of making the Union the most competitive and dynamic knowledge-based economy in the world by 2010. This means that efforts must be made to achieve a durable reduction in the overall tax burden in the EU, by ensuring a balance between cutting taxes, investing in public services and sustaining fiscal consolidation. At the same time, tax policy must be fully consistent with other EU policies such economic, employment, health and consumer protection, innovation, environmental and energy policies. But in particular tax systems must allow individuals and businesses to benefit fully from the Internal Market. This implies a need to focus on eliminating the inefficiencies due to the co-existence of 15 different tax systems within the EU and on making those tax systems simpler and more comprehensible to taxpayers.\

At the recent European Commission’s “Debate on the Future of Europe” event in Luxembourg there was a comment from the audience arguing that corruption and tax evasion in some European countries was one of the root causes of the economic crisis in Europe, and it should be up to individual member states to solve their own problems:

One thing the people can do to promote changes on any of the issues listed above is to use their voting power and their brains to vote in gthose politicians who are in favor of Free Unversal Health Care, Free Quality Education and a Fair Tax System, and vote out those who do nothing else than give you promises and more promises.

It is high time for voters around the world to clean-up those political systems which have brought us non of the above, but instead, constant warfare, environmental disasters, while they empowered corporate entities to infiltrate and manipulate prevalent political systems. 

© EU-Digest  

Corporate Fraud: Accountancy firm PwC accused of promoting tax avoidance

The UK Government has been called on to take urgent action after MPs accused one of the UK's largest accountancy firms of promoting "tax avoidance on an industrial scale" to several multinational companies.

In a damning report, the Commons' influential Public Accounts Committee censured

PriceWaterhouseCoopers(PwC), whose promotion of tax arrangements, it said, "based on artificially diverting profits to Luxembourg through intra-company loans, bear all the characteristics of a mass-marketed tax avoidance scheme".

A political row over tax avoidance broke out between the Conservatives and Labour this week over hedge funds and donors but one Labour backbencher also hinted that Smythson, the luxury stationers for which Samantha Cameron, the Prime Minister's wife, acts as an adviser, had shifted its headquarters to Luxembourg to lessen its tax burden.

In a speech, Justin Welby, the Archbishop of Canterbury, touched on the subject, calling on firms to pay more tax in the countries where they made their profits.

Read more: Accountancy firm PwC accused of promoting tax avoidance | Herald Scotland

Brazil • EU Takes Aim at Brazilian “Tax Advantages” in WTO Dispute

The EU filed a formal WTO complaint against Brazil in late December, targeting a series of tax measures that it claims provide unfair advantages to the South American country’s manufacturing sector.

In the request for consultations (DS472) - the first stage of WTO dispute settlement proceedings - the EU highlighted a series of tax measures and charges that Brazil has imposed in the automotive sector over the past two years.

This began in September 2011 with a 30 percent tax increase on motor vehicles, with an exemption for domestically produced cars and trucks. This was then followed by a new tax regime called “Innovar Auto,” launched in 2012 and set to expire in 2017. The EU also flagged tax measures affecting the electronics and technology industry, along with goods produced in Free Trade Zones, and tax advantages that Brasilia provides for exporters.

Brussels claims that these measures impose a higher tax burden on imported goods than on their domestic equivalents, while conditioning tax advantages to the use of locally produced goods. These policies have, the EU says, harmed their exporters while providing Brazilian producers with unfair advantages.

For their part, Brazilian officials say that their policies are in line with WTO obligations, with Foreign Minister Luiz Alberto Figueiredo insisting that his government has “solid arguments” in its favour.

The EU filed a formal WTO complaint against Brazil in late December, targeting a series of tax measures that it claims provide unfair advantages to the South American country’s manufacturing sector. - See more at: http://ictsd.org/i/news/bridgesweekly/182324/#sthash.zYUxn8fL.dpuf

Read more: ICTSD • EU Takes Aim at Brazilian “Tax Advantages” in WTO Dispute

Sweden - Taxation Policies: In Sweden, TV Tax Comes to Smartphones

Sweden's public broadcaster, feeling pressure as streaming heavyweights like Netflix NFLX +0.69% and HBO gain ground with their newly-founded Nordic services, is taking the nation's television license fees to a new level by asking smartphone and tablet users to pay up.

License fees have been in place for years as state-backed broadcasters look to fund commercial-free programming, including the BBC. In Sweden's case, anyone owning a television is forced to pay a SEK173 ($27) tab per month for Sveriges Television, Sveriges Radio and educational broadcasting known as Utbildningsradion.

That fee hardly looks like a bargain compared with the SEK79 ($12) monthly fee that Netflix Inc. and Time Warner Inc.'s TWX +0.85% HBO each charge subscribers in Sweden.

The good news for Swedes is no matter how many televisions one owns, they only need to pay the fee once.

The bad news is times are rapidly changing and in order to keep up with the increasing use of nonconventional ways to access Sweden's public broadcasting, Sweden's Radiotjänst collection agency is expanding its reach to computers and mobile devices with an Internet connection. That means people ditching televisions for tablets and smartphones are no longer able to ditch the TV fee.

Read more: In Sweden, TV Tax Comes to Smartphones - WSJ.com

Turkey welcomes new year with tax hikes as cigarette prices jump

Philip Morris has become the first company to announce cigarette price hikes after recent tax hikes introduced by the Turkish government.

Tobacco producer Philip Morris/Sabancı announced yesterday an increase of one Turkish Lira in the retail prices of all their products regardless of their previous prices. With the hikes, the price of a pack of cigarettes that had cost eight liras is now nine liras, while a pack that had previously cost five liras will now be six liras.

Another tobacco company, British American Tobacco (BAT) revealed they are set to increase their prices as well within a week. “Because the tax hike is not too much, cigarette prices won’t increase much either. While we haven’t made a decision, it won’t be around 20 to 30 percent as it was thought before,” Rıza Tuna Turagay, the BAT Turkey corporate communications director and a board member, told daily Star.

The government yesterday announced that the graduated state tax rate on one pack of cigarettes will rise to 81.6 percent from 80 percent. With the change, the amount of state tax on an 8-lira pack increased to 6.53 liras from 5.22 liras.

Read more: ECONOMICS - Turkey welcomes new year with tax hikes as cigarette prices jump

Protecting the less fortunate: French Premier Runs Europe’s Most Left-Wing Policy - by Helene Fouque

French Prime Minister Jean-Marc Ayrault said President Francois Hollande’s socialist government is implementing Europe’s most leftist agenda, Journal du Dimanche quoted him as saying today. ’’We run Europe’s most left-wing policies,’’ JDD cited Ayrault as saying. “It’s true. We must accept it. I am not a social-liberal.”

The newspaper did not say which policies Ayrault was referring to.

The Prime Minister, one of the least popular in France’s modern history, told JDD he will revamp his communications strategy next year to explain how he wants to create a “new French model.”

The government, composed of Socialist and Green party members, has increased school staff to bolster education and implemented a 75 percent tax on millionaires as well as pledged to protect France’s welfare system. In his 2013 budget law, Ayrault plans to add 10 billion euros ($13.2 billions) worth of taxes on private people and as much for companies.

Read more: French Premier Says He Runs Europe’s Most Left-Wing Policy: JDD - Bloomberg

Tax Evasion: EU must combat 1 trillion euro tax dodging - by Bejamin Fox

 EU countries must apply common tax rules to combat tax havens and loopholes allowing businesses to avoid corporation tax, according to new proposals released on Thursday (6 December) by the European Commission.

The Commission estimates that around 1 trillion euros is lost each year to tax evasion and avoidance in the EU, The situation is particularly acute at a time when governments across Europe are implementing austerity budgets and attempting to increase taxes to plug budget deficits and rebuild public finances.

Launching the proposals, the EU Tax commissioner Algirdas Semeta said tax evasion was "a scandalous loss of much-needed revenue" and "a threat to fair taxation".

Read more: EUobserver.com / Headline News / Commission - EU must combat 1 trillion euro tax dodging

Portugal: Zero tax on expat retirement pensions - by Brendan de Beer

The Portugese Parliament this week approved legislation making a series of alterations to the existing IRS Code, including a stipulation which allows retired expats who spend part of the year in Portugal, to be free of any income tax.

The move is born from an apparent and urgent need to provide clarity on the functionality of existing legislation, while observers have also expressed the view that the reform will further highlight Portugal, and especially the Algarve, in the bid to be recognised as the “Florida of Europe.”

The new regime unveiled this week foresees an exemption of a foreign occupational pension so long as its beneficiary qualifies for a special tax regime for non-habitual residents.

A recent publication by Deloitte in Lisbon explains that one of the requirements is that the pensioner be a non-habitual resident for Portuguese income tax purposes while the second is that the pension is an occupational pension, paid from a foreign source.

Should these requirements be met, the pension will not be taxed in Portugal and depending on the provisions of the applicable tax treaty, it is also usually non-taxable in the source country for the duration of residence in Portugal.

Read more: Zero tax on expat pensions - The Portugal News

Austerity: an international backlash against the wealthy is reshaping politics from Europe to the US to China

The well-off in Europe invest in bonds issued by banks, property companies and states, like Ireland, Portugal, Greece and Spain, which offer attractive rates of interest. In so doing, they have financed ill-judged investment on an enormous scale – the construction of housing and motorways that remain unused and other foolhardy infrastructure projects – that these countries would never have been able to undertake on their own.

As it stands, the sole purpose of the bridging loans provided by eurozone bailout funds is to aid states and their banks to remain solvent so that they can continue to pay their debts to misguided investors. As a result, we now have a situation in which it is not a matter of Germans, or the Dutch or the Finns etc, being obliged to bail out the Greeks, the Irish and the Spanish, but rather of middle class European taxpayers being forced to provide the funds required to save the fortunes of Europe’s wealthiest citizens.

As it stands, the EU debt collectors are urging crisis stricken countries to cut social services and increase taxes on the middle classes, while Greek shipping tycoons, Irish property barons and the Spanish super-rich pay hardly any income tax and invest their money in tax havens.

The priority for those who wish to save the euro should be to fight against such dysfunctions. If they do, the representatives of the unpopular European troika might still be perceived as heroes.

It is a mistake to portray the French Hollande administration as Socialist dinosaurs. The truth is that the new French government is at the extreme end of a new global trend: an international backlash against the wealthy that is reshaping politics from Europe to the US to China.

US President Barack Obama has been making political capital ahead of the November election with his pledges to tax “millionaires and billionaires”, while branding his Republican rival Mitt Romney as representing of the tax-dodging elite. Eventually that kind of shift is liable to spark a political backlash.

Western politicians, from Barack Obama to François Hollande are seeking to capture and channel this new mood... If this new mood hardens, it could mark the end of an era of lower taxes, deregulation and rising inequality that began in the late 1970s, with the rise of Margaret Thatcher and Ronald Reagan in the west and of Deng Xiaoping in China.

EU-Digest

Occupy Wall Street and the Catholic Church Agree: It's Time to Tax Speculators

The Catholic Church has for many years raised objections to the patterns of globalization, concentration of wealth and economic equality that have encouraged the massive redistribution of wealth upward that has made the rich richer, the poor poorer and the middle class more vulnerable than at any time in generations.

And, now, as the Occupy Wall Street movement raises the issue of economic inequality, the church is stepping up with a proposal to begin to address the extreme injustice of a system that taxes working people for necessities but allows speculators to avoid even the most basic responsibilities.

EU-Digest

47% In The US Favor Candidate Who Would Raise Taxes on Wealthy

More voters support a candidate who promises to raise taxes only on the rich over one who opposes all tax hikes, but roughly half feel tax increases of any kind would hurt the nation’s economy.

A new Rasmussen Reports national telephone survey of Likely Voters finds that 47% say they’d vote for a candidate for office who promises to only raise taxes on the rich, while 36% favor a candidate who opposes all tax increases. Another 18% are not sure.

For more: 47% Favor Candidate Who Would Raise Taxes on Wealthy - Rasmussen Reports™

US Economy: It Stinks, But The Only Way To Fix The Economy Is To Squeeze The Middle Class

This election is about stark differences on economic policy, but one of the few fiscal issues on which Democrats and Republicans agree — surprisingly — is how to tax corporations. Every Republican presidential candidate, and even the guy who currently has the job they're after, wants to lower rates. Raising them, or even maintaining them, might satisfy the anti-corporate angst of protesters and populists, but it won't come anywhere near paying off our debt.

Most people who study the issue agree that the top federal corporate tax rate (35 percent of profits) is simply too high. The cardinal rule of taxation is that whatever you put a levy on, you'll inevitably get less of. Taxing corporate activity means less investing, less hiring, fewer jobs and a smaller economy, which hurts the rich, the poor and the middle class alike. While this may seem like Republican propaganda, NPR's Planet Money ... polled many leading progressive policy groups and academics, all of whom told us that they would support lowering the top corporate tax rate.

In his 2011 State of the Union address, President Obama agreed. Republican candidates are even talking specifics: Mitt Romney proposes dropping it to 25 percent; Rick Perry wants to lower it to 20 percent; Herman Cain, of course, is pushing 9 percent. ...

EU-Digest comments: It ain't necessarily so if it doesn't go together with an increase in taxes for individuals earning more than $100.000....

For more: It Stinks, But The Only Way To Fix The Economy Is To Squeeze The Middle Class : Planet Money : NPR

US economy: Tax cuts for all but the wealthiest 2 percent of taxpayers will benefit the US economy

The Treasury Department estimates that extending all the tax cuts would deny the Treasury almost $3.7 trillion in revenues over the next decade, swelling the national debt.  Allowing the reductions for the wealthiest 2 percent to expire would narrow that loss to just under $3 trillion by raising $679.6 billion in new revenue from the wealthy, the Treasury estimates.

Based on president Obama's and his advisers calculations, the very small increase in the top tax bracket isn't going to harm the rich or the economy, since that was the rate that was in effect during the booming 1990s, the longest sustained economic expansion in U.S. history.

Unfortunately the "always say no" Republicans warn of disaster if all the tax reductions aren't extended,  while  at the same time some of the "sponsored" Democrats in Congress appear increasingly wary of the administration's approach.

For more news go to EU-Digest

EU regrets US electronic visa fee

EU home affairs chief Cecilia Malmstrom said on Friday (6 August) that a US plan to introduce a €10.50 fee for an entry application is regrettable and inconsistent with its goal to increase numbers of transatlantic visitors.

The criticism came after the US Homeland Security Customs and Border Protection department announced an interim rule under which from 8 September all applicants for electronic visas using the Electronic System for Travel Authorization (ESTA) would have to pay a €7.50 ($10) "travel promotion fee" and a €3 ($4) administrative fee.

"I regret very much the fee established by the interim rule," Ms Malmstrom said in a statement, adding that she had "repeatedly raised concerns about the introduction of this fee." The commissioner also warned the new requirements "are inconsistent with the commitment of the US to facilitate transatlantic mobility and will be an additional onus for European citizens travelling to the US."

For more: EUobserver / EU regrets US electronic visa fee

Foreigners visiting the US will now have to pay a $ 10.00 tax for the "priviledge"

President Barack Obama signed a bill Thursday that imposes a $10 fee on foreign travelers to the U.S. The funds will be combined with a $100 million private-sector fund raising campaign to market and advertise international tourism.

U.S. Rep. Harry Mitchell, a Democrat representing Scottsdale and Tempe, and the U.S. Travel Association backed the Travel Promotion Act. They hope the foreign tourist tax and private-sector contributors will help market the U.S as a tourist destination.

Post-9/11 travel rules, anti-American sentiment stemming from the Bush administration and the poor global economy all have discouraged travel to the U.S. in recent years.

Note EU-Digest: the name this bill carries does not reflect its main purpose which is to collect money up front from foreigners for the "priviledge" to visit the USA. It certainly will not be considered an incentive by foreign tourists.

For more: Obama signs Travel Promotion Act - Phoenix Business Journal:

CBS News: | - CBSPoll: 74 Percent Support Higher Taxes On The Rich

For the complete report from CBS News click on this link

Poll: 74 Percent Support Higher Taxes On The Rich - by Kevin Hechtkopf

Almost three-quarters of Americans think it is a good idea to raise taxes on people making more than $250,000 per year, according to the latest CBS News/New York Times poll. In fact, two-thirds of Americans think the tax code should be changed so that middle-class Americans pay less than they do now, while "upper income" people pay more. As for President Obama's overall budget plan, a majority - 56 percent - say it sets the right priorities for the country. Thirty-two percent say it doesn't, and twelve percent don't know.

Times Online: What do cars and cows have in common? No, not horns - Carl Mortished

For the complete report from the Times Online click on this link

What do cars and cows have in common? No, not horns - Carl Mortished

Proposals to tax the flatulence of cows and other livestock have been denounced by farming groups in the Irish Republic and Denmark. A cow tax of €13 per animal has been mooted in Ireland, while Denmark is discussing a levy as high as €80 per cow to offset the potential penalties each country faces from European Union legislation aimed at combating global warming. The proposed levies are opposed vigorously by farming groups. The Irish Farmers' Association said that the cattle industry would move to South America to avoid EU taxes.

Livestock contribute 18 per cent of the greenhouse gases believed to cause global warming, according to the UN Food and Agriculture Organization.