“The proposed General Anti-Avoidance Rule [UK] [...] attacks arrangements with one or more of these qualities:

(a) arrangements that would result in receipts being taken into account for tax purposes which are significantly less than the true economic income, profit or gain;

(b) arrangements that would result in deductions being taken into account for tax purposes which are significantly greater than the true economic cost or loss;

(c) arrangements that includes a transaction at a value significantly different from market value, or otherwise on non-commercial terms;

(d) arrangements, or any element of it, inconsistent with the legal duties of the parties to it;

(e) arrangements including a person, a transaction, a document or significant terms in a document, which would not be included if the arrangement were not designed to achieve an abusive tax result;

(f) arrangements that omit a person, a transaction, a document or significant terms in a document, which would not be omitted if the arrangement were not designed to achieve an abusive tax result; and

(g) arrangements that include the location of an asset or a transaction, or of the place of residence of a person, which would not be so located if the arrangement were not designed to achieve an abusive tax result.” http://www.taxresearch.org.uk/Blog/2011/11/21/making-aggressive-tax-avoidance-illegal-what-a-new-gaar-might-do/

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Cartelizing Taxes: Understanding OECD’s Campaign Against ‘Harmful Tax Competition’:

Formed in 1961 to promote global economic and social well-being, the Organization for Economic Cooperation and Development (OECD) has become the collective voice of rich countries on international tax issues. After an initial focus on improving commerce through addressing double taxation issues, the organization shifted to a focus on restricting tax competition and increasing automatic exchanges of tax information. In this paper we analyze the reasons for this shift in policy focus. After describing the history of the OECD’s work on taxation, we examine the OECD’s project against “harmful tax competition” as it has played out since its launch in the 1990s. We analyze the mechanisms behind the project from a public choice perspective. While typical economic models portray tax competition as a prisoner’s dilemma between governments, a more powerful perspective is of the incentives of politicians and bureaucrats. We conclude that the project against tax competition is an example of the interplay between the interests of politicians and international bureaucrats, which illustrates the role international organizations play in competition among interest groups. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1950627

Cf. Joining the Chorus for Tax Cooperation:

[...] But international organizations aren’t the only ones that are destroying jobs and economic opportunity in the name of tax fairness. The U.S. Treasury and Internal Revenue Service are considering regulations that could cost Americans millions of jobs. One of the regulations being developed stems from the Foreign Account Tax Compliance Act (FATCA), which was passed by Congress in 2010. FATCA would impose a 30 percent tax on the investment in the United States of any foreign financial institution, including a bank, if it had any unreported U.S. citizen or green card holder contributing to the pool of money invested. Furthermore, the foreign financial institution’s officers could be subject to civil and criminal charges for making such an investment. In an era of common dual citizenships, it is impossible for a foreign financial institution to know for certain whether any of its clients is a U.S. taxpayer (i.e., citizen, green card holder, etc.). Thus, foreign financial institutions in Switzerland, Taiwan and elsewhere are pulling their investments out of the United States right at the time when the U.S. needs all of the job-creating foreign investment it can get.

Sen. Carl Levin, Michigan Democrat, and the other economic-know-nothings who proposed these measures claim — without any basis in fact — that the United States is losing $100 billion annually because of foreign account tax avoidance or evasion. Private foreign investment in the U.S. is about $14 trillion. So $100 billion is less than 1 percent of the private foreign investment, yet the mental midgets in Congress and the administration are willing to risk trillions of dollars in job-creating foreign investment in exchange for a phony $100 billion. Well over 10 million American jobs are at risk because of this foolishness.

It gets worse. The Treasury and IRS have yet to do a cost-benefit study of FATCA, but final regulations are being developed. In the private sector, executives who so failed at their fiduciary responsibilities would be fired, perhaps fined or even sent to jail. But members of Congress and the executive branch are most unlikely to pay any penalty for risking perhaps 20 to 40 jobs for each job they might, theoretically, save. By the way, many of the senators and congressmen who brought you FATCA are the same ones who want to continue to fund the OECD. Mr. President, if you really care about jobs in the way you say you do, why are you not calling for the repeal of FATCA and reining in Mr. Levin, his colleagues and your own Treasury secretary, who are in the process of endangering far more existing jobs than any of your questionable jobs proposals could possibly create? http://www.cato.org/pub_display.php?pub_id=13832

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Tax havens and the FTSE100: the full list http://www.guardian.co.uk/news/datablog/2011/oct/11/ftse100-subsidiaries-tax-data

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High Technology, Not Low Taxes, May Drive US States’ Economic Growth http://www.sciencedaily.com/releases/2011/06/110623130751.htm

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4strategies that American companies use 2reduce their taxes (Video 3:35) http://video.nytimes.com/video/2011/06/19/business/100000000870844/inside-the-accountants-playbook.html

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Monitoring the OECD’s Campaign Against Tax Competition, Fiscal Sovereignty, and Financial Privacy: Strategies for Low-Tax Jurisdictions “The Paris-based Organization for Economic Cooperation and Development has an ongoing anti-tax competition project. This effort is designed to prop up inefficient welfare states in the industrialized world, thus enabling those governments to impose heavier tax burdens without having to fear that labor and capital will migrate to jurisdictions with better tax law. This project received a boost a few years ago when the Obama Administration joined forces with countries such as France and Germany, which resulted in all low-tax jurisdictions agreeing to erode their human rights policies regarding financial privacy. The tide is now turning against high-tax nations – particularly as more people understand that ever-increasing fiscal burdens inevitably lead to Greek-style fiscal collapse. Political changes in the United States further complicate the OECD’s ability to impose bad policy. Because of these developments, lowtax jurisdictions should be especially resistant to new anti-tax competition initiatives at the Bermuda Global Forum.” http://freedomandprosperity.org/files/OECD-Bermuda.pdf

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Tax havens: the heart of the global economy “[...] tax havens have grown so fast in the era of globalization, since kind of the 1970s, that they have now become right—they are now right at the heart of the global economy and are absolutely huge. I mean, there are 10—anywhere between 10 and 20 trillion U.S. dollars sitting offshore at the moment. Half of world trade is processed in one way or another through tax havens. It’s all around us, and it’s absolutely huge. [...]” http://www.australia-offshore.com/offshore-banking-and-tax-havens-have-become-the-heart-of-global-economy/

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Download a free version of Policy and Choice – on the impact of behavioral economics on government tax and spending policies. The authors take a stream of research which had highlighted particular ‘nudges’ and turn it into a comprehensive framework for thinking about policy in a more realistic world where psychology is incorporated into economic decisionmaking. http://www.brookings.edu/press/Books/2011/policyandchoice.aspx

Cf. http://www.amazon.com/Policy-Choice-Finance-Behavioral-Economics/dp/0815704984/

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How to Pay No Taxes: 11 shelters, dodges, and rolls—all perfectly legal—used by America’s wealthiest people http://www.businessweek.com/magazine/content/11_16/b4224045265660.htm

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Don’t Tax the Rich “[...] some on the left are better at posturing than thinking.” http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2011/03/the-intelligent-question-posed-by-saturdays-march-is-what-alternative-is-there-to-osbornes-spending-cuts-theres-on.html

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Cross-Country Comparisons of Corporate Income Taxes
“To our knowledge, this paper provides the most comprehensive analysis of firm-level corporate income
taxes to date. We use publicly available financial statement information for 11,602 public corporations
from 82 countries from 1988 to 2009 to estimate country-level effective tax rates (ETRs). We find
that the location of a multinational and its subsidiaries substantially affects its worldwide ETR. Japanese
firms always faced the highest ETRs. U.S. multinationals are among the highest taxed. Multinationals
based in tax havens face the lowest taxes. We find that ETRs have been falling over the last two decades;
however, the ordinal rank from high-tax countries to low-tax countries has changed little. We also
find little difference between the ETRs of multinationals and domestic-only firms. Besides enhancing
our knowledge about international taxes, these findings should provide some empirical underpinning
for ongoing policy debates about the taxation of multinationals.” http://www.nber.org/papers/w16839.pdf

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Common tax rules for companies operating in EU: “How it works
Corporate tax rates in the EU will not change. EU countries will continue to decide on their own corporate tax rates.
When calculating their taxes, companies would have a choice of using the different national systems or the single set of rules.
For example, a company may have operations in four EU countries – three with profits and one with a loss.
The company would be able to file one tax return instead of four. It would add up its profits, subtract its losses and use the common rules to calculate deductions and exemptions – arriving at a single taxable sum.
Each of the four countries would collect taxes on a portion of the taxable sum – based on their national rates. The portion would be calculated through a formula set out by the rules.
For the proposal to become law, the EU’s governments must agree to it after consultation with the European Parliament.” http://ec.europa.eu/news/economy/110318_1_en.htm

http://ec.europa.eu/taxation_customs/taxation/company_tax/common_tax_base/index_en.htm

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“[...] tax policy coordination.

Direct taxation remains a national competence. Pragmatic coordination of tax policies is a necessary element of a stronger economic policy coordination in the Euro area to support fiscal consolidation and economic growth. In this context, Member States commit to engage in structured discussions on tax policy issues, notably to ensure the exchange of best practices, avoidance of harmful practices and proposals to fight against fraud and tax evasion.
Developing a common corporate tax base could be a revenue neutral way forward to ensure consistency among national tax systems while respecting national tax strategies, and to contribute to fiscal sustainability and the competitiveness of European businesses.

The Commission intends to present a legislative proposal on a common consolidated corporate tax base in the coming weeks. [...]”

“[...] The Heads of State or Government agree that the introduction of a financial transaction tax should be explored and developed further at the Euro area, EU and international levels. [...]”

CONCLUSIONS OF THE HEADS OF STATE OR GOVERNMENT OF THE EURO AREA
OF 11 MARCH 2011 https://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/119809.pdf

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Tax competition at work: Amazon vs Illinois

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of Illinois residents. Unfortunately, a new state tax law signed by Governor Quinn compels us to terminate this program for Illinois-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by Illinois-based affiliates like you – even if those retailers have no physical presence in the state.

We had opposed this new tax law because it is unconstitutional and counterproductive. It was supported by national retailing chains, most of which are based outside Illinois, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that its enactment forces this action.

As a result of the new law, contracts with all Illinois affiliates of the Amazon Associates Program will be terminated and those Illinois residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, or SmallParts.com. Please be assured that all qualifying advertising fees earned prior to April 15, 2011 will be processed and paid in full in accordance with the regular payment schedule. Based on your account closure date of April 15, 2011, any final payments will be paid by July 1, 2011.

You are receiving this email because our records indicate that you are a resident of Illinois. If you are not currently a permanent resident of Illinois, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after April 15, please contact us for reinstatement into the Amazon Associates Program.

To be clear, this development will only impact our ability to continue the Associates Program in Illinois, and will not affect the ability of Illinois residents to purchase online at http://www.amazon.com from Amazon’s retail business.

We have enjoyed working with you and other Illinois-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Illinois residents.

Regards,

The Amazon Associates Team

http://directmatchmedia.com/amazon-terminates-illinois-affiliates.php

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USA: It’s Official: You Must Report Offshore Insurance, Annuity, and Gold Accounts “The proposals were retroactive to 2009.” http://www.lewrockwell.com/nestmann/nestmann21.1.html

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