Amazon vs Walmart in the internet sales game. Even Walmart is feeling the heat. Aivars Lode
Thursday, April 11, 2013
Sunday, April 7, 2013
As I have discussed many times over the years, the tax havens will fall and the structure’s that have been established will cost those that relied on them a pretty penny. Aivars Lode
BERLIN—A German campaign against banking secrecy is having an impact: Luxembourg said over the weekend that it could give up opposition to sharing information about cross-border accounts with other European countries.
"There is an international trend towards an automatic exchange of information," Luc Frieden, the Luxembourg finance minister, said in an interview with the weekly Frankfurter Allgemeine Sonntagszeitung. "In contrast to the past, we no longer strictly reject doing this."
Finance Minister Luc Frieden said Luxembourg's stance has changed.
Only Austria and Luxembourg still refuse to disclose the identities of holders of bank accounts in their countries owned by residents of other European Union countries.
The small gesture by Luxembourg could be a big step forward in making it easier for European authorities to track money that some wealthy citizens are shuttling across national borders into accounts in countries that don't comply with rules, set by the Organization for Economic Cooperation and Development, on international disclosure of information about bank accounts.
Germany has been pressing European Union members and neighboring countries to share information about bank accounts owned by foreigners. A bilateral tax treaty with Switzerland that would have committed Swiss banks to share some information about accounts held by German citizens was blocked by Germany's main opposition parties, who said the deal still allowed German taxpayers to maintain anonymous accounts in Swiss banks.
Germany has recently stepped up its campaign. German Finance Minister Wolfgang Schaüble has praised the international rescue plan for Cyprus, which includes a move to tap bank deposits larger than €100,000 ($129,000), calling it a blow against a banking business that Germany has said has relied on stringent secrecy rules, and arguing that the time had come to standardize the international exchange of account information.
Last week, the Washington-based International Consortium of Investigative Journalists published a list of 120,000 offshore companies and trusts it alleged were being used by 130,000 individuals in more than 170 countries to hide billions of dollars in income from local tax authorities.
Mr. Schaüble welcomed the publication.
"We need to increase the pressure, and I think such things becoming public increases the pressure internationally, and will also increase the readiness to cooperate of some who have been hesitant," Mr. Schaüble told German radio on Friday.
Germany's current government, led by Chancellor Angela Merkel, has taken steps to crack down on tax avoidance by both individuals and companies. Together with France and the U.K., Germany is calling for harsher laws to prevent companies from shifting profits from country to country to avoid taxes.
At a recent meeting of finance officials from the Group of 20 industrial and developing nations, finance minister from the three nations closed ranks, calling on the world's leading industrial and developing economies to better coordinate tax rules.
The move followed publication of a report by the OECD that found that multinational corporations exploit varying tax rates by declaring their profits in the countries with the lowest tax rates.
Although such moves by companies or individuals aren't necessarily illegal, they can erode tax income in the country where a company is based. German authorities have gone to lengths to recoup tax losses, including black-market purchases of compact discs containing details of accounts with Swiss banks owned by thousands of German citizens. Tax authorities in states such as North Rhine-Westphalia have been using the acquired data to pursue citizens suspected of tax evasion.
Germany, which borders Switzerland, Liechtenstein, Luxembourg and Austria, countries with relatively strong banking-secrecy regimes, tried to pass a pact with Switzerland earlier this year aimed at stemming losses from tax fraud.
The treaty called for a one-time levy of between 21% and 41% on the value of assets held by German citizens in Swiss accounts. In addition, the treaty would have introduced a flat withholding tax of 26.4% on those accounts beginning in 2013.
The opposition Social Democrat Party branded the deal as too lenient on tax evaders and rejected it in the upper house of parliament.