Sunday, June 4, 2017
Art. 5 [The Amnesty will be granted under the following conditions]:
I - presentation of a Statement of Exchange and Tax Regularization (Dercat), in electronic format;
II - full payment of income tax at the rate of 15% (fifteen percent) levied on the total amount in real of the resources subject to regularization; and
III - full payment of the fine of regularization in a percentage of 135% (one hundred and thirty five percent) of the tax on the income calculated in the form set forth in item II.
Thursday, June 1, 2017
Texas Woman Pleads Guilty to Using Offshore Accounts in Panama to Conceal More than $1.3 Million from the IRS
A resident of College Station, Texas, pleaded guilty today to conspiring to defraud the United States by using offshore accounts in Panama to conceal more than $1.3 million in royalty income that she earned from oil wells, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents and information provided to the court, Joyce Meads, 73, admitted that she filed false 1997 through 2009 individual income tax returns, omitting more than $1.3 million in royalty income that she received from oil wells. From approximately April 1997 through April 2010, she conspired with offshore promoters to disguise this income, setting up nominee companies in Delaware and Panama in the name of W.G. Holdings Corporation and transferring her interest in the oil wells to the nominee entity in Delaware. Meads’s monthly royalty checks were issued to W.G. Holdings. For approximately a decade, Meads had her royalty checks sent to a Miami post office box where they were picked up, couriered to Panama and deposited into her nominee accounts. Meads repatriated funds by disguising them as scholarships or loans from W.G. Holdings to herself. She later transferred the funds to bank accounts in her own name or her mother’s name. Meads admitted that she caused a tax loss of more than $250,000. Two of the promoters who assisted Meads, Marc Harris of The Harris Organization, Republic of Panama, and Boyce Griffin of Offshore Management Alliance Ltd., Republic of Panama, have also been convicted of conspiracy and other charges and were previously sentenced to prison.
“For more than a decade, Joyce Meads attempted to conceal her income from the Internal Revenue Service (IRS) by assigning it to a nominee entity and stashing it offshore,” said Acting Deputy Assistant Attorney General Goldberg. “As today’s plea makes clear – the days of safely hiding your money offshore are over – the Department continues to work with its law enforcement partners to find and hold accountable those who seek to evade paying their fair share of taxes.”
“Joyce Meads’ attempt to use complex offshore schemes to evade paying her fair share of income taxes was no match for the skills of IRS Criminal Investigation special agents,” said Chief Richard Weber of IRS Criminal Investigation (CI). “IRS CI and the Department of Justice’s Tax Division share the same vision when it comes to investigating those who attempt to hide their income; whether it’s through offshore holdings or state-side entities, we are determined to put an end to this type of fraudulent activity.”
Sentencing is scheduled for Aug. 4. Meads faces a statutory maximum sentence of five years in prison, a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant Chief Greg Tortella of the Tax Division, who is prosecuting the case.
Sunday, May 7, 2017
The Independent Commission for the Reform of International Corporate Taxation is hiring. As part of the coalition that initiated ICRICT, we’re sharing the details with you below. Please see the job description below for full details and if you want to apply, please send your CV and a covering letter to: email@example.com by the closing date of 21 May 2017. Please put “ICRICT media” as the subject of the e-mail when applying. ICRICT Media Relations officer
Application deadline: 21st May 2017 before midnight Central European Summer Time.
Employment Type: Part-time/Full time
The Independent Commission for the Reform of International Corporate Taxation is a unique body of prominent and influential thinkers, from both developing and developed nations which promotes international corporate tax reform from the perspective of global public interest. ICRICT is seeking to recruit a Media Relations officer to support the Secretariat and the Commissioners in their work.
Background: The Independent Commission for the Reform of International Corporate Taxation (ICRICT) is a unique body of prominent and influential thinkers that promotes international corporate tax reform and a more inclusive discussion of corporate tax rules. Its perspective is that of the global public interest, rather than national or corporate interest, and it promotes tax reforms which support sustainable development, the reduction of poverty and inequality, good-quality public services and fulfilment of states’ human rights obligations.
ICRICT has become an influential global voice in the corporate tax debate, often challenging official orthodoxy and calling for the deeper reforms which are set out in its Declaration and subsequent statements. Its audience includes international institutions, national governments, business, trade union and civil society organizations and the public. The Commission makes statements and undertakes advocacy: it is governed by a Steering Committee (SC) of interested global organisations and individuals committed to a fairer, more inclusive global tax system.
For the next two years, ICRICT’s aim is to expand and deepen its influence on global debates about corporate taxation, focusing on two priorities: advocating its current policy positions and facilitating technical work to further build on those positions. The advocacy work will take the form of high-level influencing by the Commissioners, public and private events convened by ICRICT itself, participation in events convened by others and securing media coverage for ICRICT. This will require the creation of a regular media presence for ICRICT in a wide range of countries as well as building credibility with national governments and international institutions, with a particular emphasis on developing countries and key OECD countries. The technical work will bring together experts to elaborate and deepen the central issues raised by the ICRICT Declaration. ICRICT will aim to work closely with other coalitions and organizations which share its objectives.
As the media/public relations officer, you will be responsible for increasing the profile and exposure of ICRICT’s key messages to policy makers, the media and the wider public. A specific focus will be to increase ICRICT’s profile in the Global South.
Through regular dialogue with the Head of Secretariat, the Steering Group members and the Commissioners you will proactively identify media opportunities and you will pitch (and in some cases write or co-write) comment pieces, interviews and other features for international print, broadcast and online media in order to maximize media coverage.
You will also ensure a flow of regular and high-quality written content for the ICRICT website and other ICRICT media platforms, some of it written by you and some by others. The successful candidate will have substantial experience as a journalist and/a press officer and excellent network of worldwide contacts in the specialist and general media, especially in the Global South. You will be confident and experienced in devising and implementing creative media campaigns, and generating extensive coverage across a wide range of worldwide press/broadcast and online media.
- Developing and implementing a communications strategy for ICRICT which includes: identifying and making connections to relevant media in key countries (including developing countries and major OECD countries , notably Commissioners’ countries of origin); identifying key moments during the year which offer media potential for ICRICT, drafting and placement of publications and statements in the media; working with individual Commissioners to write and publish op-eds and commentaries in the media; managing the content of the ICRICT website, including ensuring a flow of fresh content and setting up a blog to be written by Commissioners or other experts associated with ICRICT.
Pitching to the media and developing relationships with key journalists in key countries, maintaining an active presence on social media platforms, responding to appropriate media enquiries, updating the media area of the ICRICT’s website and other ICRICT platforms and keeping accurate records of media engagement.
Support the work of the Secretariat in overseeing the organisation of ICRICT events in collaboration with partners.
You must have significant experience of working in or with the media especially in developing countries, excellent communication skills, the ability to plan and deliver results and the desire to work in a fast-paced team committed to making a difference. You will need:
- Excellent written and oral communication skills in English and, ideally, at least one other language;
The ability to write and support the writing of high quality press releases, opinion pieces, interviews and features in a way that establishes a consistent and authoritative voice for ICRICT;
Several years of working experience in journalism and/or international public relations or communications, with specific experience in a developing country context;
Experience working with social justice, trade union, human rights organizations and campaigns.
A strong network of key journalists and media contacts, particularly in developing countries and the international media;
Ability to deal quickly and confidently with media inquiries and an awareness of media-related legal and reputational risks for ICRICT;
Commitment to the importance of online media, including social media;
Creativity and open-mindedness. We are looking for a very good team player with excellent organisational skills;
Personal interest in tax justice and commitment to ICRICT’s mandate and values;
Proven experience in consistently meeting deadlines.
Willingness to travel to ICRICT events around the world.
The contract is for a fixed term (subject to a probationary period) that concludes at the end of the current funding agreement: 31st December 2018.
The position can be located anywhere in the world. However, the successful candidate will be required to work with the Head of Secretariat, who is based in the UK, and the ICRICT Chair, who is currently based in New York, and the position is administered via a UK organisation. Thus a demonstrated ability to work with people in these locations and time zones will be amongst the factors used in the selection. Reliable broadband connectivity will also be a key requirement.
Remuneration is competitive and to be determined in line with the funding and mode of engagement. Travel and accommodation expenses related to participation in meetings will be provided.
ICRICT is committed to a recruitment process based on the values of equity, diversity and inclusion. The position will be formally contracted to Tax Justice Network (either as employee or consultant) who will administer the contract on behalf of the ICRICT Steering Group. It is envisaged that the position will be offered on an ongoing full time or part time basis, subject to the incumbent maintaining the confidence of the Steering Committee and there being no change to the funding situation.
Thursday, May 4, 2017
Forgive the alarmist headline. But I just read Citizens for Tax Justice Network (CTJ)*/ITEP defending FATCA because it can raise $40 billion to $70 billion tax revenue a year for the U.S. Enough already. I hope that Citizens for Tax Justice/ITEP are correct and that $70 billion a year remains to be recovered by the IRS from non-reported foreign income. I work for a public taxpayer-funded academic research institution. If all the FATCA digging can discover a $70 billion treasure chest that can be spent on higher education support (instead of the Great Southern Wall) then I'm first in line with my hat out for further research funding. While there may be supportable reasons for Tax Justice / ITIP to argue for requiring foreign institutions to submit the equivalent of the 1099 series to the U.S. Treasury, the collection of an additional $70 billion in tax revenue is likely not one of them. So let's look at the $70 billion of hidden tax revenue waiting to be discovered....
The article states that "it is estimated that the United States loses $40 to $70 billion in revenue annually due to individual income tax evasion." Its citation of this data is the September 2016 Congressional Research Service report: FATCA Reporting on U.S. Accounts: Recent Legal Developments. However, I read the CRS report and it is primarily about the status of IGAs and protection (I argue lack thereof) of taxpayer information shared. I could not find in the CRS the $40 - $70 billion figure or even a discussion about the calculation of revenue annually lost to individual income tax evasion.
And that term implies "all" tax evasion (domestic and foreign-based nonreporting) which is quite different from previous claims of $150 billion tax revenue lost from nonreporting of foreign income.
I think what the CTJ / ITEP commentator meant to citation is a Congressional Research Service (CRS) Memorandum of July 23, 2001 referencing an inquiry made by the House Majority Leader as to the method used by attorney Jack Blum, an IRS contract consultant, to construct the then estimate of $70 billion of illegal tax evasion losses due to tax havens. This figure was contained in his affidavit submitted in support of the government’s request from the federal court for a John Doe summons for records from MasterCard and American Express. However, according to the CRS Memorandum: “Mr. Blum’s estimate was contained in a declaration filed in connection with a petition the Internal Revenue Service filed with the U.S. District Court for the Southern District. In response to your request, we contacted Mr. Blum and discussed his estimate; he was not able to send us a written discussion of his estimating procedure … We did not discuss these particular aspects of the estimating process in our initial conversation with Mr. Blum and our attempts to contact Mr. Blum on a follow-up basis have not been successful.” (see my 130-page SSRN article for footnotes ad nauseum)
On March 4, 2009 the IRS Commissioner Charles Shulman testified before the Subcommittee that there is no credible estimate of lost tax revenue from offshore tax abuse. Treasury Departments have often stated large figures of unreported annual taxable income in foreign jurisdictions, and a huge asset base from which that income percolates. By example, the IRS has stated that underreporting and underpayment of tax liabilities account for more than 90 percent of the $450 billion tax gap dollars. While the IRS has not estimated the size of the international tax gap, the Treasury Inspector General for Tax Administration reported in 2012 that estimates range from $40 billion to $123 billion annually.
I fancy myself a two-bit political economist of sorts and thus understand the difficulty in measuring an unseeable "black hole" (I recall Dutch Prof. Dr. Brigitte Unger of Utrecht referring to her measuring of the opaqueness of the money laundering industry in this way, but it may have been my crime fighting friend Prof. Dr. Dionysios Demetis of Hull). However, just like with 'proving' the existence of a black hole, we can research for and analyze data of 'measurable' surrounding circumstances. In 2000, the U.S. State Department estimated that assets 'secreted' in offshore jurisdictions totaled $4.8 trillion. In 2007, the OECD estimated the total at $5 trillion to $7 trillion. If banks, like UBS, had such significant 'secreted' assets in 2007, then I wonder why it is that these same banks required capital bailouts in 2008 from sovereign wealth funds, direct governments intervention, and central banks? Seems to me a disconnect. Several academics and economists with various motivations have sought to measure the AUM of international financial centers, naming just two examples from many: the IMF and Brook Harrington. I welcome a research grant and a collaborative team (without a political opinion to express in its findings) to undertake an exhaustive research and analysis.
The CTJ/ITEP article then points to the egregious UBS conduct wherein the bank assisted clients in evading U.S. tax on $15 billion of assets (I recall it being $20 billion but I'll go with Citizen's for Tax Justice's figure). I also recall that after the full investigation of Credit Suisse's international clients that more than half of the clients turned out to be 'tax compliant', or so the bank testified under oath about the findings of a robust audit of its international client base by a respected outside U.S. law firm. See my commentary of 2014 Of about $10 billion of Credit Suisse AUM initially identified as potentially non-compliant with U.S. tax laws, it turned out that $5 billion were compliant and another $2 billion had lost a U.S. tax during the time in question.
Still, $4 or 5 billion of non-compliant AUM is $ 4 or $5 billion of AUM. Not something that should go unnoticed by a reputable bank. Not excusing Credit Suisse or UBS in any way. The bank and its employee(s) should be held accountable for assisting individuals in committing a crime against the U.S. government. The other governments of the world may not like the U.S. jurisdictional criminal reach into their business' affairs, but that's the reality they live in for exposing themselves to the U.S. market. Especially banking institutions that are both subsidized and protected by U.S. taxpayers, or take advantage of the U.S. financial markets (UBS had significant U.S. exposure during the time of its non-compliant behavior).
Let's say it all of UBS was non-compliant dollars hidden from the IRS though probably some portion was compliant. 5% return on $15 billion is $750 million. Take an average 15% tax rate on portfolio income and that gives is $112.5 million. UBS, the biggest wealth manager for foreign assets under management, I recall reading in industry reports back when the UBS case broke, had 10% of the market. Let me cut that figure in half for sake of argument. So if UBS is representative of only 5% of the market, we are still in the $2 billion range of lost tax revenue - a very far cry from the articles $40 - $70 billion, or previous $150 billion. More likely, it's a lot less. (see my previous commentary on Kluwer's Tax Blog)
See Background and Current Status of FATCA (March 1, 2017). LexisNexis® Guide to FATCA & CRS Compliance (5th ed., 2017) . SSRN: https://ssrn.com/abstract=2926119
Byrnes’ Lexis Guide to FATCA & CRS Compliance – NEW 2017 edition expanded to two-volume set!
Since the first edition written in Spring of 2012, the industry leading 2,000 page analysis of the FATCA and CRS compliance challenges, 79 chapters by FATCA and CRS contributing experts from over 30 countries. Besides in-depth, practical analysis, the 2017 edition includes examples, charts, timelines, links to source documents, and compliance analysis pursuant to the IGA and local regulations for many U.S. trading partners and financial centers. Byrnes’ Lexis Guide to FATCA Compliance, designed from interviews with over 100 financial institutions and professional firms, is a primary reference source for financial institutions and service providers, advisors and government departments. This treatise also includes in-depth analysis of designing a FATCA internal policy, designing an equivalent form to the W-8, reporting accounts, reporting payments, operational specificity of the mechanisms of information capture, validation for fit for purpose, data management, and exchange by firms and between countries, insights as to the application of FATCA, CRS, and the IGAs within BRIC, SEA and European country chapters. This fifth edition provides the financial enterprise’s FATCA compliance officer the tools for developing and maintaining a best practices compliance strategy. No filler of forms and regs – it’s all Texas beef folks!
* In an earlier version this morning I inadvertently swapped TJN for CTJ. I am separately examining a TJN post of yesterday citing to a Finish government sponsored Global Financial Integrity report measuring illicit flows (see here) based upon matched-trade methods to estimate misinvoicing. Trade misinvoicing is calculated by comparing a country’s reported trade statistics with those of its “advanced economy” trading partners (see p. 46 of the GFI report).
Saturday, April 29, 2017
United Arab Emirates is 109th jurisdiction to bend to OECD will and sign OECD treaty against offshore tax evasion and tax avoidance
His Excellency Muadid Hareb Mughair Al-Khaili, Ambassador of the United Arab Emirates to France, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in the presence of the OECD Deputy Secretary-General, Rintaro Tamaki. The Convention is the most powerful instrument for international tax cooperation. It provides for all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers' rights.
The Convention's impact grows with each new signatory; it also serves as the premier instrument for implementing the Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries. The Convention will enable the United Arab Emirates to fulfil their commitment to begin the first of such exchanges by 2018.
The Convention can also be used to swiftly implement the transparency measures of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project such as the automatic exchange of Country-by-Country reports under Action 13 as well as the sharing of rulings under Action 5 of the BEPS Project. The Convention is also a powerful tool in the fight against illicit financial flows.
The Convention was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information and to open it to all countries, thus ensuring that developing countries could benefit from the new more transparent environment.
The 109 jurisdictions participating in the Convention can be found at: www.oecd.org/ctp/exchange-of-tax-information/Status_of_convention.pdf
Thursday, April 13, 2017
The Government has announced that from 1 July 2017 it will allow the Australian Taxation Office (ATO) to disclose debt information to credit reporting bureaus of taxpayers that are not effectively engaged with the ATO to manage their debts.
Taxpayers are encouraged to pay taxation debts in a timely manner to avoid it affecting their credit rating.
Providing transparency of tax debts owed by disengaged taxpayers aims to influence taxpayer behaviour and reduce the unfair financial advantage gained by taxpayers that do not pay their tax on time. It will also help to provide visibility of tax debt information to other businesses (such as suppliers) and credit providers.
Taxpayers who effectively engage with the ATO to resolve their debt will not have it reported.
While the specific circumstances and exceptions for disclosure are being confirmed through the consultation and design process, tax debts will only be reported where:
- the debt is for a taxpayer that has an ABN
- the debt is over $10,000 and unpaid for over 90 days
- the debt is not in dispute
- no payment plan has been established or an existing payment plan has defaulted.
The ATO will notify a taxpayer that it intends to refer its tax debt to a credit reporting bureau before it passes on the information.
The ATO will establish agreements with credit reporting bureaus to manage the reporting and administration of tax debt information.
In conjunction with Treasury, the ATO is consulting with the community, including business, industry groups and associations (including the Australian Small Business and Family Enterprise Ombudsman), to ensure that the measure is implemented and administered effectively.
Legislation and supporting material
This measure is not yet law and is subject to the normal parliamentary process.
Subject to passage of the law, the ATO will issue further details on how the measure will be implemented and administered.
Wednesday, April 12, 2017
Reuters reports: Argentina's government said on Tuesday $116.8 billion in assets were declared, mostly from abroad, in a record tax amnesty it hopes will help spur domestic investment and economic growth. The government collected 148.6 billion pesos ($9.652 billion) in taxes and fees from the amnesty, revenue that will help the government meet its target for a fiscal deficit of 4.2 percent gross domestic product this year. read the full story here
Tuesday, April 11, 2017
note: free download of 2017 edition expanded chapter of two-volume FATCA-CRS set
F15. We are a reporting Model 1 FFI. We maintain preexisting accounts that are U.S. reportable accounts where we have been unsuccessful in obtaining a U.S. TIN from the account holder. May we continue to use nine zeroes in place of a U.S. TIN when we report information in 2018 on that account with respect to the 2017 year?
No. Prior to 2017, Article 3(4) of the Model 1 IGA provided that a reporting Model 1 FFI was not required to report a U.S. TIN for the account holder of a preexisting account if the TIN was not in the FFI’s records; instead, the FFI could report the account holder’s date of birth if the date of birth was in the FFI’s records. The IRS published an FAQ to explain how to report an account holder for which the FFI did not have a TIN (i.e., either entering nine zeros or omitting the TIN and receiving an error message that should be ignored). See ICMM FAQ Q9 for updated rules for complying with Article 3(4) for reporting in 2017 with respect to the 2016 year.
Article 6(3)(b) of the Model 1 IGA provides that by January 1, 2017, the Model 1 jurisdiction commits to establish rules requiring reporting Model 1 FFIs to obtain U.S. TINs for preexisting accounts for reporting with respect to 2017 and later years. Beginning January 2018, the IRS will update its record validation rules so that error notifications will be sent if a reporting Model 1 FFI reports nine zeros as the TIN for an account holder.
If you have questions regarding the obligations under the IGA between the U.S. and your jurisdiction, or any domestic legislation passed to implement the provisions of the IGA, please contact the office of the Competent Authority in your jurisdiction.
C25. In 2016, I submitted a new Form 8966, FATCA Report, using the XML Schema v1.1. In 2017, I need to amend or correct a record on that report using XML Schema v2.0. What version of the schema do I need to use to amend or correct the record?
Beginning January 16, 2017, FATCA Reporting will only support the XML schema v2.0. All new, nil, amended, corrected, and void reports should use version 2.0. The two versions of the FATCA XML schema are not backwards compatible and files submitted using schema version 1.1 will not validate against version 2.0. Example: In November 2016, a user submits Report2015 and receives a notification to correct record level errors within 120 days. In February 2017, the user should make all corrections using XML schema version 2.0.
C29. When may the AccountClosed element be used?
The AccountClosed element permits financial institutions to declare the account status as closed or transferred during the calendar year. Do not report the account closed if an account holder rolls over the amounts in one account into another account with the same FFI during the calendar year. Withholding agents should not complete this element.
The AccountClosed element is optional. The AccountClosed element should not be used for 2014 or 2015 tax years.
C30. When may the AccountNumber element be used?
The AccountNumber element provides the account number assigned by the financial institution to uniquely identify the account holder. The account number can be any of the following:
- A custodial account or depository account
- Code related to a debt or equity interest, not held in a custody account.
- Identification code of a cash value insurance contract or annuity contract.
Enter a “NANUM:
- Enter a “NANUM” for the element if the financial institution does not have an account numbering system.
- Enter a “NANUM” if the reporting FI is a withholding agent reporting a withholdable payment made to a payee that is not an account holder.
- Enter a “NANUM” if the reporting FI is a Direct Reporting NFFE.
The AcctNumberType attribute allows financial institutions to declare the uniquely used account number format. The value of the AcctNumberType attribute should be from the list below:
|Values||Description of Account Number format|
|OECD601||IBAN||International Bank Account Number used in some countries to uniquely identify a customer's bank account|
|OECD602||OBAN||Other Bank Account Number|
|OECD603||ISIN||International Securities Identification Number uniquely identifies securities, such as bonds, commercial paper, stocks and warrants.|
|OECD604||OSIN||Other Securities Identification Number|
|OECD605||Other||Any other type of unique identifier codes or account number, i.e. insurance contract.|
The AcctNumberType attribute is optional and is not required for FATCA reporting. The AcctNumberType attribute should not be used for 2014 or 2015 tax years.
F14. I am filing a Form 8966 on behalf of a Passive NFFE. As a NFFE, it does not have, and is not required to obtain, a US TIN. How do I report a TIN for this entity if they don’t have one?
A Reporting FI that is not obligated to have a US TIN or GIIN should leave the Reporting FI TIN element blank. This will cause a Record-Level Error Notification; however, because the absence of a TIN in this NFFE example is correct, the Notification does not require a Correction. Do not substitute any other characters for the TIN in this case.
If the TIN element was left blank due to the transition rule for Model 1 IGA filers reporting on pre-existing accounts, please see IDES FAQ A17 for more information.
To further support the consistent implementation of the Common Reporting Standard (CRS), the OECD released:
- a series of additional Download CRS-related-FAQs;
- the second edition of the Standard for Automatic Exchange of Financial Account Information in Tax Matters which expands the last part on the CRS XML Schema User Guide. It also sets out additional technical guidance on the handling of corrections and cancellations within the CRS XML Schema, as well as a revised and expanded set of correction examples. The other parts remain unchanged relative to the first edition that was issued in 2014.
- OECD CRS Implementation Manual Download Implementation-handbook-standard-for-automatic-exchange-of-financial-information-in-tax-matters
- OECD CRS Scheme Manual Download Common-reporting-standard-status-message-xml-schema-user-guide-for-tax-administrations
- OECD CRS Schema Download CrsStatusMessageXML_v1.0 and Download Isocsmtypes_v1.0
Free download from the industry leading 2,000 page analysis of the FATCA and CRS compliance challenges, 78 chapters by FATCA and CRS contributing experts from over 30 countries. Besides in-depth, practical analysis, the 2017 edition includes examples, charts, timelines, links to source documents, and compliance analysis pursuant to the IGA and local regulations for many U.S. trading partners and financial centers.
Monday, April 3, 2017
May the Netherlands pry open the U.S.' offshore status as a secrecy jurisdiction? Netherlands Using IRS and U.S. Courts to Uncover Its Tax Cheats Hiding U.S. Accounts
May the Netherlands pry open the U.S.' offshore status as a secrecy jurisdiction?
The Netherlands Offshore Credit Card Pilot Study
The Netherlands’ request for information stems from the Netherlands Tax and Customs Administration’s (“NTCA”) Payment Card Project, in which information on the use of payment cards (debit and credit cards) issued by foreign financial institutions are used to identify noncompliant Netherlands taxpayers. The NTCA conducted a pilot project using data obtained from four acquirers/processors to identify Dutch taxpayers with undisclosed foreign bank accounts by analyzing payment transactions in the Netherlands with cards issued by financial institutions outside the Netherlands. The pilot project successfully identified the cardholders of approximately 75 percent of the cards and approximately two-thirds of the identified cardholders confessed to undisclosed offshore bank accounts linked to the payment cards in question, resulting in the NTCA’s collection of several million euros in additional tax, interest, and penalties from the noncompliant taxpayers.
The pilot project analyzed transactional data related to a sample of 51 payment cards drawn from a pool of all cards used in the Netherlands more than 75 days from 2009 through 2011 issued by financial institutions outside the Netherlands deemed likely to shelter these accounts from disclosure to the Netherlands. 75 percent of the 51 cards owners were identified of which approximately 25 (two-thirds) of the card owners admitted to not disclosing the underlying foreign bank account from which the card is paid. Some of the accounts held non-reported earnings on savings and some accounts held nonreported business income.
The Netherlands has advised the IRS that the NTCA has been unable to obtain transaction records pertaining to American Express Card products in the same manner as it did from four other acquirers/processors (i.e. using information sources in the Netherlands) because American Express has informed the NTCA that transactions are processed exclusively on computer systems maintained in the United States by American Express Travel Related Services Company, Inc. The NTCA has informed the IRS that, in the absence of information sought from American Express, it will not be able to identify Dutch taxpayers using undisclosed foreign accounts to avoid tax. Based upon the linking of these payment cards to accounts outside the Netherlands, without leaving an identifiable record of the transactions in those accounts, the Netherlands has reason to believe that the holders of the payment cards may have failed to report foreign financial accounts or income on the tax returns they were required to file under the revenue laws of the Netherlands.
Examples of Netherlands Non-Compliant Taxpayers Caught
Examples include a Dutch medic with a credit card linked to a €700,000 bank account in Luxembourg was discovered as undisclosed in the medic’s tax return. In another case, a Dutch entrepreneur was found to have a credit card linked to an unreported bank account in Malta that held at least €60,000 not reported on the entrepreneur’s tax return. The Netherlands has now expanded its Payment Card Project with an additional 1,000 cards currently under investigation.
The John Doe Request on Behalf of Netherlands Revenue Authority
A federal court in Texas authorized the Internal Revenue Service (IRS) to serve a John Doe Summons on American Express Travel Related Services Company, the Justice Department announced. The IRS John Doe summons seeks information about persons residing in the Netherlands that have American Express debit or credit cards linked to bank accounts located outside of the Netherlands. The summons is referred to as “John Doe” summonses because the IRS does not know the identity of the person being investigated.The IRS is in receipt of a request from the Kingdom of the Netherlands for information pursuant to Article 30 of the Convention Between the Government of the United States of America and the Kingdom of the Netherlands.
The request states that the information is to be used to determine the correct income tax liabilities of certain as-yet-unidentified taxpayers under the laws of the Netherlands. This “John Doe” summons relates to the investigation of a particular person or ascertainable group or class of persons, that is, Dutch taxpayers, who at any time during the period January 1, 2009 through December 31, 2016, held an American Express payment card linked to a bank account located outside the Netherlands. There is a reasonable basis for believing that such person or group or class of persons may fail, or may have failed, to comply with one or more provisions of the internal revenue laws of the Netherlands. The information sought to be obtained from the examination of the records or testimony (and the identity of the person with respect to whose tax liability the summons has been issued) is not readily available from other sources.
download for free the LexisNexis® Guide to FATCA & CRS Compliance (5th ed., 2017) chapter 1: https://ssrn.com/abstract=2926119
Thursday, March 23, 2017
Swiss Supreme Court Rules Tax Request Required Even If Based Upon Stolen Bank Data if Stolen From Foreign Bank
The convention on double taxation with Paris does not exclude the possibility to grant legal assistance, as the Swiss law does not apply to cases of stolen banking data in France, the Supreme Court said. A former employee with UBS France in 2010 forwarded a stolen list with about 600 bank clients to the French authorities, which filed two requests for legal assistance with the Swiss tax authorities. read the Swiss Info story :
Saturday, March 18, 2017
In September 2014, Hong Kong indicated its support for implementing automatic exchange of financial account information (AEOI) on a reciprocal basis with appropriate partners with a view to commencing the first exchanges by the end of 2018. In order to exchange financial account information with a jurisdiction, Hong Kong (China) needs to have or enter into a double tax convention or tax information exchange agreement that allows for AEOI and to sign a competent authority agreement (CAA) with that jurisdiction.
Today, six treaty partners of Hong Kong (China) signed a competent authority agreement with Hong Kong (China) bringing the total number of CAAs to nine. Jurisdictions included Belgium, Canada, Guernsey, the Netherlands, Italy and Mexico (joining Japan, Korea and the United Kingdom). More agreements are expected in the coming months so that Hong Kong (China) will be able to exchange data with all interested and appropriate partners.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is monitoring the implementation of tax transparency standards to ensure the effective and timely delivery of the commitments made, the confidentiality of information exchanged and to identify areas where support is needed. It is also assisting its developing country members to ensure that they can also receive the benefits of the ongoing global move to automatic exchange of financial account information.
Belgium, Canada, Guernsey, the Netherlands, Italy and Mexico sign competent authority agreement with Hong Kong (China).
In addition, Panama today deposited its instrument of ratification for the Convention on Mutual Administrative Assistance in Tax Matters ("the Convention"). By doing so, Panama underlines its commitment to fighting tax evasion and avoidance and has put in place an important pre-condition for delivering on its commitment to start exchanging Common Reporting Standard information in 2018. The Convention will enter into force for Panama on 1 July 2017.
Tuesday, March 14, 2017
New FATCA foreign partnership (WP) agreement and withholding foreign trust (WT) agreements released, 2014 agreements expire
The IRS released Revenue Procedure 2017-21, which contains the updated withholding foreign partnership (WP) agreement and withholding foreign trust (WT) agreement.
These WP and WT agreements allow a foreign partnership or foreign trust to assume the withholding and reporting obligations under chapters 3 (provisions relating to withholding of tax on nonresident aliens and foreign corporations) and 4 (provisions under the Foreign Account Tax Compliance Act, or FATCA) for certain payments of US source income (such as interest, dividends, and royalties) made to its direct partners, beneficiaries, or owners, and in some cases, persons holding interests in the partnership or trust through one or more foreign intermediaries or flow-through entities (indirect partners).
The revenue procedure also provides information on submitting an application or request for renewal of a WP or WT agreement.
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Sunday, March 5, 2017
Canadians work hard for their money and the majority pay their taxes, but some wealthy individuals participate in complex tax schemes to evade paying their fair share. The Government of Canada is working hard to crack down on offshore tax evasion and aggressive tax avoidance in order to ensure a tax system that is more responsive and fair for all Canadians.
The Honourable Diane Lebouthillier, Minister of National Revenue, this week tabled the Government of Canada’s response to the House of Commons Standing Committee on Finance’s report entitled: The Canada Revenue Agency, Tax Avoidance and Tax Evasion: Recommended Actions. In doing so, Minister Lebouthilier accepted all the recommendations in the report, and reiterated the Government’s commitment to combat tax cheating at home and abroad and to keep Canadians apprised of these efforts.
With the Government of Canada’s investment of $444 million in the Canada Revenue Agency (CRA), the Agency is delivering concrete results.The Agency has already started the work to reassure hard working Canadians that wealthy taxpayers can’t buy their way out of paying their fair share:
- The CRA is on track to recover over $13 billion this fiscal year alone from audit efforts.
- The CRA has increased the number of teams focused on large multinational corporations and increased the number of auditors assigned to detect offshore non-compliance.
- The CRA has set up a team to focus exclusively on promoters of offensive tax schemes.
- Audits of the highest risk taxpayers for four offshore jurisdictions are underway. The first two jurisdictions targeted were the Isle of Man and Guernsey. Two other jurisdictions of concern cannot be named at the moment, in order to avoid compromising these audits. So far, a total of 41,000 international financial transactions, equaling over $12 billion, have been analyzed.
This announcement reinforces the Government of Canada’s commitment to continue to build its capacity to crack down on tax evasion and aggressive tax avoidance. The Government has the tools to correct non-compliant behaviors as well as when appropriate, impose serious penalties; and, communicate transparently its activities and results to Canadians.
"The Government of Canada is taking action to crack down on tax cheats. When some choose not to pay their share, it places an unfair burden on the tax system. We are sending another strong signal to tax cheats: that this behaviour will not be tolerated and they will face the full force of the law. Our Government will continue to update Canadians on these important actions to ensure a tax system that is responsive, fair and meets the needs of all Canadians."
-The Honourable Diane Lebouthillier, Minister of National Revenue
- In April 2016, the Offshore Compliance Advisory Committee (OCAC) – an independent committee composed of experts with significant legal and tax administration experience – was created to advise the Minister and the CRA on strategies to combat offshore tax evasion and avoidance. On December 5, 2016, the Minister of National Revenue received the OCAC’s report on the Voluntary Disclosures Program (VDP), which contains recommendations to enhance the VDP and improve it for the benefit of Canadians. The insight provided by the OCAC will help inform the CRA’s next steps to ensure that the VDP is delivered in a fair and effective manner. The OCAC’s report is available on the CRA website.
- In June 2016, the CRA published a first conceptual study on the tax gap. The CRA will build on this report and has committed to publishing a series of additional papers on other aspects of the tax gap over the next two to three years.
- The Agency has been tracking international electronic funds transfers (EFT) of over $10,000. Based on the information collected, the Agency is currently reviewing over 41,000 transactions, worth over $12 billion, in four jurisdictions of concern. Four additional jurisdictions will now be reviewed every year and every EFT of over $10,000 will be analyzed to identify high risk taxpayers.
- Between April 1, 2011 and March 31, 2016, the CRA convicted 42 taxpayers with offshore links of tax evasion, involving $34 million in federal taxes evaded, court fines of $12 million, and 734 months of jail time.
- Overall, the CRA is currently conducting audits of over 820 taxpayers and criminally investigating 20 cases of tax evasion related to offshore accounts.
Wednesday, February 22, 2017
European Commission Finds Spain Penalties for Non Reporting of Foreign-Held Assets are Discriminatory and Not Proportionate
While the Commission takes the view that Spain has the right to require taxpayers to provide its authorities with information on certain assets held abroad, the fines charged for failure to comply are disproportionate. As fines are much higher than penalties applied in a purely national situation, the rules may deter businesses and private individuals from investing or moving across borders in the single market. Such provisions are consequently discriminatory and in conflict with the fundamental freedoms in the EU. In the absence of a satisfactory response within two months, the Commission may refer the Spanish authorities to the Court of Justice of the EU.
Thursday, February 2, 2017
Thailand has joined the Global Forum on Transparency and Exchange of Information for Tax Purposes as its 139th member. Its membership reinforces its commitment to implement both the international standard of exchange of information on request and the standard of automatic exchange of financial account information.
Thailand is now part of the international community in the fight against tax avoidance and evasion and will be working closely with all members of the Global Forum as well as the Global Forum Secretariat to reach its goals in implementing the standards on exchange of information on request and automatic exchange of financial account information.
The Global Forum's aim is to ensure that all jurisdictions adhere to the same high standard of international co-operation in tax matters. This is done through a robust monitoring and peer review process which Thailand will also be subject to.
For more information on the work of the Global Forum, visit:
Tuesday, December 27, 2016
Monaco strengthens international tax co-operation – ratifies the Convention on Mutual Administrative Assistance in Tax Matters
Monaco today deposited its instrument of ratification for the Convention on Mutual Administrative Assistance in Tax Matters ("the Convention"). By doing so, Monaco underlines its commitment to fighting tax evasion and avoidance and takes another important step in implementing the Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries as well as automatic exchange of Country-by-Country Reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.
Monaco committed to implement automatic exchange of financial account information in time to commence exchanges in 2018 and was amongst the first signatories of the CRS Multilateral Competent Authority Agreement (the "CRS MCAA") and the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (the "CbC MCAA"), which are both based on Article 6 of the Convention.
The Convention will enter into force for Monaco on 1 April 2017.
Friday, December 23, 2016
Another important step to implement the OECD Common Reporting Standard (CRS) was taken, with a further 350 bilateral automatic exchange relationships being established between over 50 jurisdictions committed to exchanging information automatically pursuant to the OECD Common Reporting Standard (CRS), starting in 2017.
There are now more than 1 300 bilateral relationships in place across the globe, most of them based on the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (the CRS MCAA). The full list of automatic exchange relationships that are currently in place under the CRS MCAA and other legal instruments can be accessed on the Automatic Exchange Portal. With respect to the jurisdictions exchanging as of 2017, 1133 out of the 1459 possible bilateral exchange relationships are now established. The 326 non activated exchange relationships are mainly due to the fact that 6 jurisdictions were not yet in a position to provide a full set of notifications.
Two more rounds of activations are scheduled to take place in March and June 2017 which will allow the remaining 2017 and 2018 jurisdictions to nominate the partners with which they will undertake automatic exchanges in the coming months. The next update on the latest bilateral exchange relationships will be published before the end of March 2017, with updates to follow on a periodic basis. In total, 101 jurisdictions have agreed to start automatically exchanging financial account information in September 2017 and 2018, under the CRS.
The 2017 second wave of activations of bilateral exchange relationships is a further crucial step towards the timely implementation of the OECD-developed international standard for the automatic exchange of financial account information, the CRS, and reflects the determination of jurisdictions around the world to deliver on their political commitment to fight tax evasion.
Saturday, November 12, 2016
The following OECD publications are hot off the press!:
Wednesday, November 9, 2016
The Global Forum on Transparency and Exchange of Information for Tax Purposes held its annual meeting in Tbilisi, Georgia on November 2-4, bringing together 220 delegates from 84 jurisdictions and 12 International organisations to further their shared goal of improving tax transparency and achieving a level playing field.
The meeting marked the completion of the first round of the Forum’s peer review process, with the release of 17 new reports assessing the level of compliance with the international standard for exchange of information on request (EOIR). Click here to read the details of the reports.
Many jurisdictions which received less than satisfactory ratings announced that they had already taken or were taking steps to address recommendations made in the review process. Marshall Islands agreed to its report but highlighted recent progress made. Panama reminded the group of recent significant action taken, both in terms of amending legislation, reorganising its competent authority and signing the multilateral Convention on Mutual Administrative Assistance in Tax Matters on 27 October 2016. Trinidad and Tobago also informed the members of their intention to address outstanding issues at the earliest.
A special fast-track review procedure was agreed at the meeting to enable Global Forum to recognise, by mid-2017, progress made and to assess changes being made in various jurisdictions.
A second round of peer reviews now underway will include an assessment of the availability of and access by tax authorities to beneficial ownwership information of all legal entities and arrangements.
Global Forum members took stock of the tremendous progress being made in the implementation of the standard for automatic exchange of information (AEOI), with 97% of jurisdictions committed to exchanging information in 2017 ready for these exchanges. They noted progress and some challenges for jurisdictions committed to launching exchanges in 2018, and agreed to implement tighter monitoring of the delivery of key milestones as well as providing support for implementation. Governance arrangements for a Common Transmission System for exchanging data were also agreed.
Against a backdrop of calls for preparation of lists of non-cooperative jurisdictions, a constructive discussion was held to ensure that all converge around the Global Forum’s transparency standards in their respective transparency initiatives.
The Global Forum strongly reaffirmed its commitment to help its developing country members to meet the international standards and benefit from improvements in international tax transparency. It encouraged them to move towards implementing the AEOI Standard as soon as practicable.
In the margins of the Global Forum meeting, Saudi Arabia and Uruguay took an important step towards implementing automatic exchange of financial account information in 2018 by signing the Multilateral Competent Authority Agreement.
For additional information on the Global Forum:
- 9th Global Forum meeting Statement of outcomes
- Global Forum peer review process, and to read all reports to date: http://www.oecd-ilibrary.org/taxation/global-forum-on-transparency-and-exchange-of-information-for-tax-purposes-peer-reviews_2219469x.
- Website of the Global Forum: www.oecd.org/tax/transparency
- Exchange of Information Portal: www.eoi-tax.org – Follow the latest news on exchange of information networks.