Tag Archives: tax havens

Part 14: What God Hath Wrought – The #FATCA Inquisition (Review, Identify and Report on “U.S. Persons”) – FATCA and the rise of @TaxHavenUSA



The USA as the world’s number one tax haven? Well, FATCA does play a role in making it harder for other countries to operate as tax havens. FATCA most certainly operates to assist the U.S. in preventing competition to the USA in the tax haven industry. As a recent article from the Tax Justice Network notes:

Bloomberg is running a story entitled The World’s Favorite New Tax Haven Is the United States, which closely follows the line that TJN has been taking, particularly since our big Loophole USA blog a year ago, and our subsequent USA Report for the Financial Secrecy Index last October.
Expanding on a quote we used in our USA report and in our more recent call for Europe to apply withholding taxes to counter the new global threat emanating from the United States, Bloomberg cites:
“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”
The article is a most useful contribution to the debate. It does quote people spouting the usual claptrap about confidentiality peddled by wealthy wealth-extractors, tax evaders and market riggers:
“Rokahr and other advisers said there is a legitimate need for secrecy. Confidential accounts that hide wealth, whether in the U.S., Switzerland, or elsewhere, protect against kidnappings or extortion in their owners’ home countries.”

You will find the article by Peter A. Cotorceanu here:
Trusts & Trustees-2015-Cotorceanu-tandt_ttv178
See also my complete series: “Tax Haven or Tax Heaven” here.

Tax Haven or Tax Heaven 2: Tax Havens and the "poaching" of capital – theft or competition?

Introduction …

On the campaign, I used to talk about the outrage of a building in the Cayman Islands that had over 12,000 business — businesses claim this building as their headquarters.  And I’ve said before, either this is the largest building in the world or the largest tax scam in the world.
President – Barack Obama – May 4, 2009

What about Nevada, Delaware, Wyoming and S. 871 of the U.S. Internal Revenue Code?
“Tax Haven” or “Tax Heaven” – it’s a question of perspective …

This is the second of my posts about the “Panama Papers” and the question of “Tax Havens”. The first was:
Tax Haven or Tax Heaven 1: Fran Hendy and Barrie McKenna see “Panama Privacy Leak” as about more than #offshore witch hunt
The “Panama Papers” has generated discussion about “tax havens”, “tax evasion” and “international tax policy”.  The revelations included (“surprise, surprise”) that many of the accounts were NOT held by residents of Panama, but by residents of other nations. There is nothing that is “per se” illegal about having “offshore accounts”. In fact “offshore accounts” are (even for U.S. citizens) perfectly legal. U.S. citizens are required to report these accounts (FBAR anyone?) to the U.S. Government. The failure to report these accounts may (but not must) result in the imposition of draconian penalties.
Given that the “offshore accounts” are (in general) legal, the problems arising from “offshore accounts” are NOT the result of a lack of compliance with the law, but rather WITH compliance with the law. In other words, “For Good and Evil“, the use of offshore accounts  is the result of compliance with existing law. Perhaps the problem (if you agree that there is one) is the result of the system itself and NOT with bad actors in the system.
The system, the participants and participants in the system

The above tweet references an article that appeared in the Globe and Mail on April 9, 2016 by University of Montreal Professor Peter Dietsch. The article is interesting (whether you agree with the author or not) because the author equates the concept of a “Tax Haven” with the concept of “capital poaching” (the attempt to attract capital).
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