“Rumours of my death are greatly exaggerated”
So exclaimed Mark Twain on reading his evidently premature obituary. And we can similarly characterise the hopelessly inept Economist article of 1st June 2021 “Twilight of the Tax Haven”, in similarly suggesting that the effect of the new G7 minimum tax initiative will be the demise of the Cayman Islands and other offshore financial centres. The confusion evidenced in The Economist’s analysis is entirely predictable.
A global pandemic and the economic strain that many nations face as they struggle to contain the virus has not deterred the Organisation for Economic Cooperation and Development (OECD) from its quest to reorganise the entire international tax system.
Through a series of steadily escalating demands, paired with coercion and threats targeting low-tax jurisdictions, the OECD has spent the last two decades seeking to eliminate tax competition. With a much more ideologically sympathetic partner in US President Joe Biden and his administration, they may finally be close to their goal of global tax harmonisation.
Recognising its importance for global economic growth, the OECD began over half a century ago with a goal of facilitating trade and addressing problems like double taxation that can arise from cross-border economic activity. But thanks to ideological capture by European tax collectors and the steady march of mission creep, today’s OECD is now concerned primarily with extracting as much “revenue” as possible from the productive sector of the economy.
The last year has been marked by an upheaval in global mobility, prompted by the COVID-19 pandemic and a wave of regulation and infringement procedures. Our special focus includes comment and analysis from the Investment Migration Council, Henley & Partners and Arton Capital; plus case studies outlining the key features and benefits of citizenship programmes offered by Greece, Dominica and Antigua & Barbuda.
In this feature, we look at the challenges posed for ethical finance in the post-COVID environment; while also considering trends and developments in jurisdictions such as Ireland and Luxembourg; as well as ESG investment risks in Southeast Asia.
The challenge for data governance in the 21st century is to bridge aspirations to share data for personal or public benefit with concerns about the harms to individuals, communities and society that can emerge from data (mis)use.
Achieving these aspirations requires governance structures that enable data access, while managing the rights and responsibilities associated with different data types. In this article, we explore the role that data trusts can play in bridging this governance gap.
Sharing data can bring a range of benefits for individuals, organisations and society. It can help tailor products or services, make business processes more efficient, and improve public services from healthcare to transport and more. However, while digital technologies have great potential to boost economic growth and enhance our wellbeing, as our daily activities – at home, at work, or in public – become increasingly digitally-mediated, these novel patterns of data use can leave us vulnerable in new ways.
In our latest Big Debate, experts weigh in on how the COVID-19 pandemic has changed global finance, and how IFCs have adapted in response to the unprecedented events of last year.
Over the last decade, there has been a remarkable shift in attitudes about structures that private wealth practitioners have long regarded as normal and ordinary.
Offshore companies, family trusts, and the use of offshore financial centres have increasingly come under intense scrutiny from the public, the media, and governments alike.
Typical tax planning and succession planning structures likewise have been thrust into the public eye (and in respect of the former, perhaps deservedly so). The perception is that such structures are used only by the wealthy and only for some nefarious purpose such as tax evasion or other criminal activity.
Official HMRC figures show that the amount of private wealth being passed on to themselves is growing a lot faster than the amount being passed to loved ones.
This is almost certainly due to lack of planning rather than a sudden change amongst the moderately wealthy to contribute extra taxes to the Exchequer over and above those they paid throughout their lifetime.
This apparently startling example of philanthropy might be very welcome to the government but is unlikely to please relatives who might have otherwise benefitted. It is almost certainly not deliberate. But it is avoidable.
Inheritance Tax (IHT) has often been described as a voluntary tax. Despite recent efforts by HMRC to tighten up the rules, it remains quite easy to avoid with relatively simple planning but there are traps which will catch the unwary or ill advised.
Mark Pragnell, Director of Pragmatix Advisory, interviews Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration on the issue of financial transparency versus privacy, the impact of COVID-19 on fiscal policy, and the future of a digitalised global economy.
MP: Pascal, thank you for making the time to answer our questions.
It’s an understatement to say that a lot has happened in the world since your last interview for IFC Review, in December 2018 with the respected Irish corporate tax lawyer Mark O’Sullivan. There’s a lot to cover ……
MP: Let’s start with one of the OECD’s greatest achievements.
Twenty years ago, few would have anticipated the mass exchange of private financial information between different jurisdictions’ tax authorities. But first, the OECD’s Tax Information Exchange Agreements and more recently its Common Reporting Standard (CRS) have created a new world order in tax cooperation and transparency. Last year, information regarding 84 million accounts with assets of €10 trillion were shared – double that of 2018.
This feature looks at the past, present and future of IFCs, considering what their reputation is built on, what factors aﬀect or inﬂuence choice of IFC, and how IFCs can ensure survival in the face of ongoing legislation and policy restrictions.
Increasing consideration has been given…
In the past few years, international fin…