EEC and tax avoidance
Date: Tuesday 4th September, 2012
Author: Cathy Corns
Profile: Cathy Corns
The official journal of the EU has recently published an opinion on tax and financial havens, i.e. tax havens. I have to say the journal is worth reading, primarily for the rhetoric. Whilst it is accepted that governments to do not normally like tax havens, some of the phraseology is interesting, for example:
“2.1 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 multi-millionaires 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. These territories display a number of common features, such as the lack of transparency on how they function and the low levels of taxation for non-residents who, in fact, do not carry out any activity there. This gives rise to harmful competition with a hidden structure, creating a legal status entirely lacking in transparency.”
I have to say, with attitudes such as this, it is no wonder that we are having problems with legitimate avoidance schemes when this is the view of jurisdictions where, essentially, businesses can perfectly legally base operations. There are tax rules to prevent the benefit accruing where businesses are owned from, for instance, the UK but nonetheless basing businesses abroad is itself not a crime.
Please note that the opinions expressed in this blog represent the views of the author and not the views of Mercer & Hole.