Should offshore financial centers be banned worldwide?

[davepoth]

Ayahuasca said:

One of the largest offshore financial centres is London - why do you think so many rich foreigners keep their money there, they're not doing it for fun - would you ban London too?

Rich foreigners keep their money here for safety as much as the tax regime. Russians like that the government here doesn't often try to poison you, Greeks like that our banks don't tend to collapse very much, the French like that our government doesn't hate success. We charge a low corporation tax here compared to our direct rivals, but the proper tax havens have much lower levels.

The issue of tax havens isn't so much that they are there but rather that the companies that use them are being a bit naughty in transferring all of their profits away to them. I think that globally we probably aren't too far away from accounting rules requiring profits in a country to be taxed in that country.

I can certainly see something happening to reduce the abuse of licencing agreements between associated companies, since that's really the crux of the problem.

[Ayahuasca]

davepoth said:

Ayahuasca said:

One of the largest offshore financial centres is London - why do you think so many rich foreigners keep their money there, they're not doing it for fun - would you ban London too?

Rich foreigners keep their money here for safety as much as the tax regime.

Funny that, exactly the same reasons that many people use 'offshore financial centres'. If you are in the UK you might imagine some tropical island to be the archetypal offshore centre, but if you live in a lot of the rest of the world, the UK is your offshore centre of choice. As well as security it offers such benefits as: fairly easy to open a bank account without too many questions being asked, not much tax for non-residents, no IHT on assets for non doms, all classic markers of 'offshore financial centres'.

[Dominicc01]

davepoth said:

I think that globally we probably aren't too far away from accounting rules requiring profits in a country to be taxed in that country.

But that is already the case.

And it's tax rules, not accounting ones.

[davepoth]

Dominicc01 said:

davepoth said:

I think that globally we probably aren't too far away from accounting rules requiring profits in a country to be taxed in that country.

But that is already the case.

And it's tax rules, not accounting ones.

Tax rules can be avoided though. Going one step up the chain to have those profits accounted for as profits in that country rather than being accounted away as invented "costs" is what I mean.

[Nikolai Petroff]

toppstuff said:

Another example where offshore companies are useful..

Many companies listed on the Hong Kong stock exchange are registered in Cayman Islands.

Why? Because Cayman Islands law is very similar in structure and operation to UK law. Investors like this.
Cayman makes it easy and fast to set the company up.

Does it save tax? Not a bean. None at all. This is because Hong Kong collects taxes on local listed companies and it doesn't matter where they are registered.

Thousands of companies are set up in this way. There is no tax evasion.

But you won't read this in the media.

Just because some owners of numbered accounts are law abiding citizens, doesn't change the fact that many are not. Hence they were banned.

[anonymous-user]

Nikolai Petroff said:

Just because some owners of numbered accounts are law abiding citizens, doesn't change the fact that many are not. Hence they were banned.

You seem to imagine loads of billionaires have their money hidden on the beaches of the bwi. I'm not sure why because they simply don't. The banks in most offshore jurisdictions are not secretive, in fact in order to not get shut down they go above and beyond most onshore. You should look up fatca for a start. I'm still intrigued as to how you think you are going to ban Delaware or why you think you or anyone else should tell countries what tax rates they should have or how the hell that would be a good idea for those onshore taxpayers!

Edited by fbrs on Saturday 6th April 21:16