The End of Banking in Tax Havens?
Tax Havens were put on the ‘comply to break your banking secrecy’ or face sanctions dictum. Compliance with the new OECD demands is either agree to breaking your banking secrecy or face spectre of sanctions.
On the blacklist are Costa Rica, Malaysia, and the Philippines – as you’d expect, Malaysia has already protested and the Phillipines, so dependant on foreign aid is taking steps to comply.
Financial centres that have committed to – but not yet fully implemented – the standard include Switzerland, Singapore, Chile and three EU countries – Belgium, Luxembourg and Austria.
Tax havens that have committed to – but not yet fully implemented - include Andorra, Monaco, Gibraltar and Lichtenstein.
What seems apparent is the ’standard’ tofollow are led by the big nations who are also the biggest taxers or are the wealthiest in terms of productive capacity and technological advancement such as Britain, the US, France, Germany and China.
The Devil is in the Details
What is not made clear is the implementation – how are they going to do it all and when? There are already probable obstacles to a very solid standard for a level playing field.
Already during the final hours of the G20 Summit, China had been in some heated debate with France (Nicolas Sarkozy) over Tibet and the exclusion of Hong Kong and Macau from the bad list – at least for the time being.
The financial centers so named for their agreed to compliance such as Singapore and Switzerland still need to develop and implement their new strategies and laws which had taken generations to cultivate. Change won’t come easily.
It will be interesting to see what the time table will be and what will be adequate compliance.
The reason is simple, many experts on tax havens have already made mention of 2 very important issues:
1) Tax Holiday Competition. The practice of Tax Havens for individuals and corporations is also being conducted in part by the G20 countries themselves in their thirst for investment dollars.
2) Tax Competition. If Tax Havens are to survive, I do envisage their switch from no tax to low tax jurisdictions – or perhaps to become jurisdictions of convenience where they are offered citizenship and therefore get another tighter layer of protection for their assets.
How all these issues will play out is very interesting to bear watching in the future.
To read more about the G20 2009 Summit Summary – click here.
To read about and understand Tax Havens – click here.
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This is hypocritical, as the USA has tax havens in Nevada and Delaware.
Costa Rican tax havens are not subject to G20 pressure.
Wellington III’s last blog post..Expats, ISAs and Tax Saving Investment Options
shit lah just admit that we have corrupt leader legislating a corrupt law! just admit except u’re all Be end dictator party symphetizer, stupid and outdated.
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