The background for the European Union (EU) assessing a $14.5 billion tax on Apple for its sales in Ireland is a rather complex maze of laws, treaties, and politics. It is not my purpose here to delve into those complexities. I am attempting a simple explanation of the issues involved and why the EU levied the tax, even though Apple and Ireland were both very content with thing the way there were.
Tax Commissioner Chris Jordan addressed the ATAX 11th International Tax Administration Conference in Sydney on Monday. At the tail-end of his address, he touched on International “secrecy haven” issues.
He says the data revolution “…is one reason why secrecy havens are failing”. Referring to Australia’s “…network of over 100 treaties and agreements”, he said that access to account data from domestic and international banks had enabled the ATO to initiate over 3,000 enquiries over the past six months.
Already completed enquiries and investigations into undeclared offshore income and assets meant that “…the Australian Federal Police and Australian Crimes Commission have Read More
This continues my blog of 28 March titled: “Australian Tax Office Announces Terms of Foreshadowed Offshore Income Amnesty!“.
The recently announced Australian Taxation Office (ATO) offshore income amnesty is available to “All individuals, companies, corporate limited partnerships, partnerships and trusts (including superannuation funds and executors or administrators of deceased estates)” that are residents of Australia for taxation purposes. However, the amnesty is not available to individuals and entities-
1. Already being audited by the ATO
2. That have received a compulsory information gathering notice relating to offshore income Read More
The ATO yesterday announced the terms of its amnesty for Australian resident individuals with undisclosed offshore income.
The terms of the amnesty are reasonably generous. In simple terms, the amnesty (with a window open until 19 December) includes-
1. A 4-year cap: back-taxes will only be imposed on offshore income for the previous four years.
2. Non-disclosure penalties will be capped at 10%.
3. Nil penalties for low-level disclosures (<$20,000 pa). Read More
Nassim Kadem reports in today’s Australian Financial Review that recently appointed Commissioner Chris Jordan has mooted a new amnesty for disclosure of hidden offshore assets and income. A Tax Office official has confirmed the proposal and apparently, Treasurer Joe Hockey has indicated support for the idea.
The amnesty would cap the retrospective tax and penalty period to four years, making it relatively attractive for Australian taxpayers wanting to come clean and avoid later criminal prosecution and unlimited back taxes. It would be particularly attractive to second and third generation members of wealthy families who have “inherited” the problem of secret offshore caches. Read More
Moshe Asher: The Tax Authority plans to provide information to relevant countries about foreign residents’ capital in Israel.
“We won’t be a tax haven for foreign residents,” said Israel Tax Authority director general Moshe Asher at the conference of the CPA Association of Jerusalem conference on December 17, 2013.
He said that the Tax Authority planned to provide information to relevant countries about foreign residents’ capital in Israel, and that these countries will reciprocate about the foreign assets of Israelis. Read More
Recently, the OECD ramped up its conflict with tax havens by issuing a report titled, Action Plan on Base Erosion and Profit Sharing. Obviously, the purpose of this report is to provide a set of options that OECD countries can enact to counter the negative impact of tax base erosion, or the shifting of tax revenue away from developed/higher tax countries to lower tax/tax havens. But before I get to the report, a bit of background is necessary to provide some context to the conflict.
First, how did tax havens develop? As I noted in a post I wrote on my economic blog about the Cyprus situation:
It may be too late for 7,000 Australian holders of accounts with the tax haven branches of Australian based banks to make voluntary disclosures of their as yet untaxed offshore tax haven interest income.
Writing in the Australian newspaper today Susannah Moran reports that as part of the Australian Tax Office’s (ATO) ongoing Project Wickenby tax evasion investigations, Australian banks have handed over “…information on a large number of people with bank accounts in offshore jurisdictions”.
The banks conceded this information following a decision of the Full Federal Court in the Read More
A Practical Guide to Perfecting Your Tax Research Techniques and Achieving Sustainable Tax Return Filing Positions
In order to maximize your accounting firm’s overall efficiency, effectiveness, and productivity in connection to researching and resolving a tax issue and determining the sustainability of the tax return filing position, the appropriate tax research processes must be meticulously designed, implemented, and executed. The subsequent five comprehensive steps will guide you in establishing an all-inclusive tax research effort on behalf of your entire client base while properly ascertaining the likelihood of success Read More
An effective operational offshore company often used is the leasing company. Leasing has been utilized in the acquisition of assets and there is a split benefit gained through a leasing company. Tax benefits accrue in the way of substantial depreciation deductions reducing taxable income to one party, while the other party may also be entitled to amortization benefits. This is a cross-border effect of the virtues of depreciation. (1)
The leasing company in the United States context is governed by the Foreign Base Company Income category of Foreign Personal Holding Company Income. (See TaxConnections/TaxBlogoshere/September 20, 2013/Foreign Corporations and Subpart F Income-Part III). Foreign Personal Holding Company Income consisting of rental income Read More