Offshore Syndrome: European Union & Tax Loot....Extracts of a study

European Union & Tax Loot....Extracts of a study

Offshore syndrome is a phenomenon of developed world yet it includes elite of developing countries too. EU is trying to resolve it yet Offshore Loot is still very powerful. How Panama explosion exposed it is an interesting study yet people are waiting for Panama 2. In our part of the world elite is in state of denial. As Panama data deals with post 1977 era so we still needs future Panamas. Here are some extracts of a EU Study for informed media, powerful elite and intellectuals of developing world so that they can know the efforts already done against Offshore syndrome. It is advisable for the elite of developing countries to accept the facts and follow EU. By reading such reports one can easily understand that these tax havens are not only bad due to tax evasions but that phenomenon is also helpful for criminals, Non-State actors, money laundering players etc. Offshore loot are modern buffers where you can enjoy more power and weak laws. It is a major concern in combating terrorism. Developing democracies should form a Truth & Reconciliation Commission and pressurize their elite to  accept the facts before people.

Abstract
This study reviews the impact of tax havens, secrecy jurisdiction, and similar structures on
the EU.
It concludes that the availability of these structures constrains the EU budget and
undermines the fiscal recovery of EU Member States. They distort markets by conferring
advantages on large companies that engage in transfer pricing.
The study recommends the development of objectively verifiable criteria to identify high
risk jurisdictions, combined with mandatory country by country reporting by
multinational companies operating in the EU.
Read the Complete report by clicking HERE

European initiatives on eliminating tax havens and offshore financial transactions and the impact of these constructions on the Union's own resources and budget

Extracts

1. Individuals and corporations use tax havens to hide assets and income from the authorities in which they are located in order to evade tax. In Spain, for example, it is estimated that up to 25% of GDP remains untaxed due to tax evasion schemes (see section 5.1.2.1), and €20 billion is estimated to be held by Greeks in secret Swiss bank accounts (see section 5.1.1.1). P 37-8
2. A recent OECD study has concluded that “…some multinationals use strategies that allow them to pay as little as 5% in corporate taxes when smaller businesses are paying up to 30%”, with “…some small jurisdictions act as conduits, receiving disproportionately large amounts of Foreign Direct Investment compared to large industrialised countries and investing disproportionately large amounts in major developed and emerging economies”. P38
3. Research by the TUC in 2009 found that the four major UK banks alone, had between them established them some 1,200 subsidiaries in tax havens. P38
4. State owned development finance institutions use tax havens as locations for intermediate holding funds, and to participate in other funds located in those locations. P38
5. A major worldwide concern is the use of tax havens by transnational criminal organisations (a detailed VAT fraud case study is provided in section 5.5). The United Nations Development Programme’s 1999 Human Development Report estimated that organised crime grossed $1.5 trillion per year. P 39
6. In 2012, the US State Department identified 66 jurisdictions as ‘major money laundering countries.The list includes approximately half of the offshore centres listed by the Bank for International Settlements, and a number of other jurisdictions that have been classified as tax havens, secrecy jurisdictions, etc. by other organisations in the past 15 years. P39
7. The Financial Action Task force currently lists 18 jurisdictions as high risk and uncooperative: Iran; North Korea; Bolivia; Cuba; Ecuador; Ethiopia; Indonesia; Kenya; Myanmar; Nigeria; Pakistan; São Tomé and Príncipe; Sri Lanka; Syria; Tanzania; Thailand; Turkey; Vietnam; and Yemen. P 43
8. The tension present during the London G-20 meeting in 2009 noted above remains present, a point raised in a January 2013 Financial Times article on taxation and tax havens. [The existing rules on international taxation “only take care of the interest of developed countries”, the Indian government told the UN in March 2012, a sign of frustration over multinationals’ ability to siphon off profits through royalties and management fees and deposit them in tax-friendlier locales]. P75
9. The use of tax havens for transfer pricing and tax evasion has a negative impact on EU revenues by reducing the GNI of Member States. Moreover, lower tax revenues are likely to have a negative impact on the willingness of MS to increase or maintain their contributions to the EU. Tax havens facilitate the activities of tax evaders and criminal organisations. Combating these activities consumes resources that could otherwise be used for productive investments. The ability to engage in transfer pricing gives large corporations a significant advantage over smaller companies, and this undermines EU efforts to develop the small and medium enterprise sectors. P106
10. The main international organisations dealing with the issue of tax havens are the OECD, and the OECD Global Forum. The Financial Action Task Force is also important, although it was established to address money laundering, rather than tax havens. Despite strong rhetoric on tax havens from the G-20 in 2009, there has been little concrete action, and there have been fewer references to tax havens in subsequent years. P 107
11. The EU can more readily influence the behaviour of its citizens and the businesses that operate in the EU, and it is perhaps through focusing more on this, that the harmful affects of tax havens can be significantly mitigated, if not entirely removed. The US FATCA is an example of such an approach. P 108

Further Readings

http://punjabpunch.blogspot.com/2016/04/panama-2-specter-of-offshore-political.html

Playing with Offshore locally
http://punjabpunch.blogspot.com/2016/04/civil-military-conflict-who-is-playing.html