Tag Archives: tax haven

Monaco $400 Million Penthouse Secrecy Booms: Real Estate

Monaco, the tax haven on the French Riviera, is experiencing a luxury-housing boom that includes the world’s most expensive penthouse as developers prepare for an influx of millionaires and billionaires escaping higher taxes or a loss of banking privacy.

A “flow” of new residents is emigrating from Switzerland, where financial-secrecy laws are crumbling, said Jean Claude Caputo, managing director of brokerSavills Plc’s French Riviera unit. They’re drawn by the principality’s “security, sophistication and climate,” he said — as well as for financial reasons. The Swiss government signed an accord in May to automatically share bank data across borders.

Continue reading Monaco $400 Million Penthouse Secrecy Booms: Real Estate


Tax haven buyers set off property alarm in England and Wales

LONDON, ENGLAND - OCTOBER 08: A man hangs a property for sale sign in a shop front in Sydenham on October 8, 2013 in London, England. The Government launched their 'Help to Buy' scheme today, which is hoped will enable first time buyers who can afford only small deposits to buy a home with only a 5% deposit. (Photo by Dan Kitwood/Getty Images)

At least £122bn of property in England and Wales is held through companies in offshore tax havens where ownership is difficult to trace, a Financial Times analysis of Land Registry data has found.

The figure – more than the total value of all housing stock in Westminster and the City of London – reveals for the first time the detail of the scale of offshore property ownership in the UK. It raises concern that London property in particular has become a haven for dirty money from around the world.

“Property is a key risk area for the UK,” says Robert Barrington, executive director of Transparency International UK. “From Abacha to Marcos and the Gaddafis, corrupt leaders have used shell companies and trusts to hide their identities and safeguard stolen fortunes, often in property.”

Nearly two out of three of the 91,248 foreign-company owned properties in England and Wales are held via the British Virgin Islands and Channel Island structures. Just under two-thirds of the offshore-owned property by value is in Greater London, with 27 per cent in the City of Westminster. The Land Registry data do not allow a breakdown between residential and commercial property.

When Prime Minister David Cameron last year announced that details of who owned UK-based companies would be made publicly accessible, the government highlighted the need for transparency to tackle tax evasion, money laundering and other crimes.

Yet Land Registry records show only the owner or entity holding a property, not the ultimate owner of the company through which the asset is held.

Transparency International has called for the introduction of a list of beneficial ownership of property to mirror the UK government’s push to reveal the owners behind British companies.

Anti-money laundering regulations require estate agents and lawyers to carry out due diligence on those involved in property transactions, which includes making checks on beneficial ownership. But doing so can be difficult.

“When you have a company hidden offshore, it is I think almost impossible for your average estate agent to find out what on earth is going on,” says Peter Bolton King, global residential director at Rics. “You have to make a professional judgment whether you are satisfied with the information that you are provided with.”

During the 2011 Libyan revolution, it emerged that the late Libyan dictator Muammer Gaddafi’s son Saadi owned a £10m London mansion through an offshore vehicle. Many of London’s “trophy houses”, including Witanhurst, a 65-room mansion overlooking Hampstead Heath, are owned by offshore companies whose ultimate owners are hidden. Witanhurst is registered to Safran Holdings, an offshore company registered in the British Virgin Islands.

You have to make a professional judgment whether you are satisfied with the information that you are provided with– Peter Bolton King, global residential director at Rics

Besides offering privacy to individuals and companies, BVI and the Channel Islands are attractive because of their tax regimes, and because of their strong ties with London’s banking and business community and their robust judicial systems. The 128 jurisdictions of choice for property investors include more unusual ones such as Iran and Niue, the tiny South Pacific island nation.

A Land Registry official said there were no plans to introduce a register of beneficial ownership of property and that it would be “misleading to suggest that registering land or property in a company name amounts to allowing individuals to conceal information on the register for illicit purpose”.

The total value of offshore ownership of property is likely to be considerably higher than £122bn. Limitations on how the Land Registry holds the data mean the true picture is difficult to ascertain. More than a third of the data provided by the Land Registry do not contain a purchase price. The Land Registry does not capture price information when properties change hands through the purchase of an offshore corporate vehicle for example.

Switzerland Discloses Names of Alleged Foreign Tax Dodgers

Bismarck, Steuerhinterziehung, Steuerbetrug, Schweiz

Switzerland has begun revealing alleged foreign tax dodgers that are wanted by tax authorities in their native countries, Swiss newspaper Sonntagszeitung reported.

Names, birth dates and nationalities of people suspected by their countries of origin to have stashed money in the alpine tax haven are being published in Switzerland’s official legal paper Bundesblatt. US nationals will be identified by their initials, Sonntagszeitung said.


Swiss authorities said they had been overwhelmed by requests from Germany, Russia, India and the United States to expose suspected tax cheats. German media have been anxious to find Francisco Jose Ortiz von Bismarck, a descendant of Germany’s first chancellor Otto von Bismarck, among those under investigation.

According to the Swiss newspaper, the move will allow those wanted by their governments a chance to seek legal aid. Switzerland has recently been rolling back its notorious bank secrecy after it came under pressure from tax authorities across the world, specifically from the United States.

Swiss Bank

Since the late 2000s, Washington has been pressuring Swiss banks to provide names of its citizens whose money had been traced to accounts in Switzerland. The US Department of Justice sued the Swiss-based banking firm UBS for hundreds of millions of dollars in 2008 and 2009, and has continually pushed for increased transparency.

Bern is now negotiating a deal with the United States to exchange bank account data in a bid to crack down on tax dodgers. A similar preliminary accord was agreed between Bern and Brussels back in March 2015.

Švicarska počela objavljivati popis mogućih inozemnih utajivača poreza

The disclosures come a month after a team of international journalists unearthed secret bank records that showed that the London-based global banking giant HSBC’s Swiss branch had made large profits between 2005 and 2007 by helping its clients evade taxes.

Row as Barclays promotes tax havens as ‘gateway for investment’ in Africa

British bank criticised after brochure hails Mauritius as offshore financial centre of choice for India and sub-Saharan regionMDG : Fishing boats in Mahebourg, Mauritius

Barclays’ promotion of offshore tax havens such as Mauritius, above, undermines its aim to be a force for good, says ActionAid. Photograph: F. Dubessay for the Guardian

Barclays has come under fire for promoting the use of offshore tax havens as a route for companies investing in Africa.

In a report published on Wednesday, the NGO ActionAid says Barclays’ marketing of offshore tax jurisdictions undermines the bank’s stated ambition to be a “force for good” as these places can be used by companies to reduce the tax paid in the African countries where they work. The report does not directly accuse Barclays, or the companies it works with, of tax avoidance, or suggest any illegal activity. “If people want to put their money offshore, they’ll find a way to do it, but Barclays should stop promoting this. It is inappropriate for a bank looking to be a force for good, and aiming to expand its operations in Africa, to do this,” said Toby Quantrill, tax justice adviser at ActionAid.

He said Barclays should do more to help companies invest directly in African countries. “If you’re going to be a big player in Africa, you should promote and support the development of infrastructure for direct investment in these countries.”

Estimates suggest African countries lose billions of dollars in unpaid taxes each year – and far more than they receive in foreign aid. Tax has risen up theglobal development agenda in light of such figures, with NGOs and high-level officials condemning tax avoidance as putting at risk poor countries’ prospects for development and self-sufficiency.

Barclays said it does not encourage businesses to set up in any particular jurisdiction.

Earlier this year, Kofi Annan, the former UN secretary general, said it was “unconscionable” for companies to use unethical tax avoidance to maximise their profits “while millions of Africans go without adequate nutrition, health and education”.

ActionAid estimates suggest that almost one in every $2 of reported corporate investment in developing countries is routed from or via a tax haven, with Mauritius the largest player.

In a corporate brochure published on Barclays’ website, Mauritius is promoted as “the offshore financial centre of choice for India and the sub-Saharan region” and “the experienced and established gateway for investment into Africa and Asia”.

Mauritius is known for its secrecy, negligible corporate tax rates, and for being a favoured conduit for wealthy individuals and multinationals wishing to avoid tax on African and Asian profits.

Sink or swim? Floating the idea of a sailing tax haven

Sink or swim? Floating the idea of a sailing tax haven

The “Freedom Ship International,” a mile-long, 25-story behemoth, pictured in the artist’s rendering above, is looking for funding. It could house 50,000 to 80,000 people and would have its own casino, hotel, shopping malls and apartments.

The directors say the $10 billion project needs at least $1 billion in funding to get off the ground.

While media curiosity remains high, the company has yet to secure any real financing. Roger M. Gooch, the marketing chief and a director of Freedom Ship International, said he thinks the company has “maybe a 25 percent” chance of getting enough funding to start construction.

“It’s an unproven concept and would have to be heavily capitalized, so potential venture capitalists need to be very forward thinking and visionary to invest,” Gooch said. The company would also be happy to partner with an engineering or maritime firm that had more experience in building large vessels, he said.

How do people and companies avoid paying taxes?

IT IS said that nothing in this world is certain except for death and taxes. For those with clever accountants, however, the latter can be kept to a minimum. Individuals have various ways to avoid tax legally by using structured tax shelters or changing their place of residence. Tax evasion is a different matter, treated as a criminal offence in many countries (though famously dealt with more leniently in Switzerland). The smartest evaders use a combination of bank accounts, shell companies, trusts and foundations—often fronted by nominees—in one or more offshore financial centres. Corporate tax avoidance is a greyer legal area. Companies naturally push the envelope, often betting that the authorities will have neither the wit nor the resources to confront them over their tax-minimisation strategies—or that governments will accept less tax in return for investment by “mobile capital”.

Denis Healey, a former British finance minister, once described the difference between tax evasion and avoidance as “the thickness of a prison wall”. Both grew in line with financial globalisation in the late 20th century. Evasion became easier with the explosion of tax havens, which was tacitly approved by rich countries (especially Britain) that saw them as useful adjuncts to their own financial centres. Today the world has between 50 and 60 tax havens, some of them more accurately described as “secrecy jurisdictions”. Not all are offshore: American states such as Delaware and Nevada peddle corporate secrecy. Multinationals, meanwhile, have found increasingly ingenious ways to exploit loopholes in cross-border tax rules, which were designed for an earlier age, in order to reduce their taxes. International and bilateral tax agreements that were designed to avoid double taxation can be gamed to produce double non-taxation. Companies such as Apple have been able to redefine much of their profit as stateless.

The pushback against such ruses began in the late 1990s, when the Organisation for Economic Co-operation and Development (OECD), a rich-country forum, declared war on “harmful tax competition”. It has waxed and waned since then, reaching a new level of intensity since 2008 as cash-strapped countries, both rich and poor, have fought harder to claw back lost tax revenues—witness America’s assault on Swiss banks. Tax havens are under intense pressure to exchange more information on clients with their home countries. The world appears to be moving towards a system of automatic exchange of data, though there are many bumps to iron out. Some countries are resisting, citing a conflict with their privacy laws. Others complain that they are being bullied into providing data without a guarantee of reciprocation from America and other large economies. Still, life has clearly got a lot harder over the past few years for individuals looking to dodge their tax obligations, and is likely to get tougher still.

Reform of the international rules for companies will prove trickier. Some countries have acted unilaterally, for instance strengthening anti-avoidance laws. But only a truly multilateral solution will work. At the urging of the G20, the OECD is working on a plan to tackle the myriad ways that multinationals massage down their tax bills, including through the use of hybrid securities and the deliberate mispricing of intra-company transactions. However, it is too much to expect the closure of all the loopholes, and new ones are sure to open up. Rich-world governments have long tacitly encouraged certain types of avoidance for fear of otherwise being branded uncompetitive and turning off big investors. That is likely to continue, whatever the political rhetoric or the real reasons why multinationals choose to put operations in one country rather than another, which often have little to do with tax.