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Tax havens: Any time, any place, anywhere

23rd Aug 2012
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AccountingWEB tax podcaster Anne Fairpo is drawn to an EU report on tax havens that conjures up images of 1970s Martini adverts.

Tax avoidance and tax havens have become big news this summer, and have been moving up the regulatory agenda for some years.

Among the torrent of learned reports and campaigning documents published in recent months, and opinion published in the EU Official Journal from the European Economic and Social Committee caught my eye last month.

The report has some merit in presenting a general overview of current thinking within Europe: tax havens are a bad thing, and a co-ordinated international approach is needed to eradicate abuses through what the committee calls “fictitious residency”.

The European Commission will be bringing forward a new proposal on tax and financial havens before the end of the year, and the committee hoped there would be enough consensus within Europe and beyond to device an effective and incisive response to overcome evasion.

The USA holds the key to global regulation in this area and its Foreign Account Tax Compliance Act is a significant development. The law calls on foreign financial institutions to notify US tax authorities automatically about US citizens with business interests beyond the country’s shores. But any difficulties in agreeing an international plan should not slow the EU’s progress.

This is as you would expect. But the document’s introductory paragraph added a new dimension:

“Tax havens are places where senior executives of the world's largest financial and industrial corporations mix with figures from the artistic or social ‘jet-set’, together with multi­millionaires who combine business with pleasure. They all rub shoulders with somewhat dubious individuals and use the same money that has been gained not only by legal means, but also from crime and economic offences, including even the most serious crimes such as murder, extortion, arms and drugs traf­ficking, counterfeiting, fraud, embezzlement, trafficking in human beings and illicit gaming.”

If I’m not mistaken, the committee insinuated that FT100 executives and their peers are guilty of various crimes, including mingling with members of the “jet-set” - inverted commas and all.

Has anyone used that term seriously since the 1970s?  

If the issue wasn’t so serious, it would be hilarious.

The EESC report was covered by Anne Fairpo in her 13 August podcast, sponsored by CCH. Find out more about her weekly tax digests, which include a feedback service to record up to three hours' structured CPD.

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