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Curated by Chris Bale
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Should Revenue Authorities employ psychologists to deliberately engender guilt and thereby increase tax receipts ?

Should Revenue Authorities employ psychologists to deliberately engender guilt and thereby increase tax receipts ? | Totally Tax | Scoop.it
Danny Alexander, the Chief Secretary to the Treasury, reveals HMRC has subtly altered wording of hundreds of thousands of reminder letters to 'nudge' people into paying up
Chris Bale's insight:

The Chief Secretary to the Treasury revealed that HMRC has subtly altered the wording of hundreds of thousands of letters sent out to the public to encourage people to pay up.


Speaking at the Liberal Democrat party conference, Mr Alexander said: "We are using psychologists and behavioural economists in HMRC to get the money quickly.


"Tax dodgers beware – we know where you live, we know how much you owe, and now we know how you think. Your behaviour is unacceptable, and we are coming for our money."

HMRC said it conducted "large scale" trials involving 100,000 taxpayers to "pinpoint the exact words and concepts" which make people more likely to pay their taxes.


It found that by highlighting the degree to which others are paying their taxes, known as the social norm, people are more likely to pay up.


The change in wording has so far led to an estimated £210 million worth of additional tax revenues each year.

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Bringing the UK tax profession into disrepute: Andrew Meeson and Peter Bradley must repay £5.1 million to HMRC or serve a further 10 years in jail.

Bringing the UK tax profession into disrepute: Andrew Meeson and Peter Bradley must repay £5.1 million to HMRC or serve a further 10 years in jail. | Totally Tax | Scoop.it
A former president of the Association of Taxation Technicians (ATT) and a fellow company director have been jailed for eight and half years each for a £5...
Chris Bale's insight:

 A former president of the Association of Taxation Technicians (ATT) and a fellow company director who were both jailed for a £5 million pension scheme tax fraud have been ordered to pay back a total of £5.1 million.


Andrew Meeson and Peter Bradley must repay the money within six months or serve a further 10 years in jail.


The confiscation follows a financial investigation by HM Revenue and Customs (HMRC) into the assets of the men, who were each sentenced to eight and a half years in jail in March 2013.


Meeson and Bradley, both from Wolverhampton, had conspired to receive £5 million in fraudulent income tax repayments via their company, Tudor Capital Management Limited. The pair claimed that the repayments were due on pension contributions of £25 million made by scheme members, but HMRC investigators found that these contributions did not exist.


Adrian Farley, Assistant Director, Criminal Investigation, HMRC, said:


“Meeson and Bradley committed blatant theft, exploiting their positions of trust and authority. Our priority is to track down tax fraudsters and to confiscate their ill-gotten gains. If they do not pay up, they face a substantial additional prison sentence – and they will still owe the money on release.”


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The Argentinian tax agency is using drones to catch property tax evaders. Will the use of this technology become the norm in tax revenue agencies around the globe ?

The Argentinian tax agency is using drones  to catch property tax evaders. Will the use of this technology become the norm in tax revenue agencies around the globe ? | Totally Tax | Scoop.it
Drones deployed by tax inspectors near Buenos Aires found 200 mansions and 100 swimming pools that hadn't been declared
Chris Bale's insight:

An interesting use of drone technology, as reported in the Daily Telegraph. 


The Argentine tax revenue agency is using drones to catch out wealthy tax evaders who have not declared mansions and swimming pools.


Unmanned aircraft were dispatched over an upper class area of Buenos Aires and discovered 200 homes and 100 pools that had not been detailed on tax returns.


Tax officials said the drones took pictures of luxury houses standing on lots registered as empty.


The evasions found by the drones amounted to missing tax payments of more than $2 million and owners of the properties have been warned they now face large fines.


The unregistered mansions and pools were found in an area about 10 miles south of the city and, according to the tax agency, they appeared to be large and constructed with “premium materials”.


The potential uses of drone technology within the tax world are worrying I think. For example, it is common in the UK for HMRC to stand outside a takeaway Chinese restaurant for 2 nights counting the number of people who enter. From this data an extrapolation is made as to the income and the tax due. Looking ahead, HMRC might position a drone outside every restaurant at regular intervals to more accurately assess customer flow and possible tax evasion through cash transactions.

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Does your Head of Treasury speak to your Head of Transfer Pricing ?

Interesting article from Deloitte. TP is obviously well integrated into most in-house tax functions but I wonder how often the Head of Treasury and Head of TP sit down and talk ?

Chris Bale's insight:

To understand how strategic transfer pricing may relate to cash management, consider a U.S. organization that identifies cash buildup in a subsidiary based in China. While investigating tax-efficient ways to repatriate the cash, executives learn that the subsidiary was regularly using IP that was owned by another subsidiary outside of China.


The organization concludes that part of the reason for the excess cash buildup is the lack of a royalty charge into China. “Once the issue is identified and the transfer pricing problem corrected, it results in a reduction in the rate at which cash builds up going forward,” notes Mr. Yoo. Such an event, he explains, typically leads the organization to reconsider its cash management plans.


Spotting improper allocations is just one reason to consider a strategic approach. “More than a compliance exercise, strategic transfer-pricing also may help identify tax-efficient opportunities,” say Darcy Alamuddin, principal, Deloitte Tax LLP. For example, an organization may have the opportunity to utilize net operating losses in certain countries; deploy excess tax credits; migrate IP to low-tax countries; and clean up so-called de facto cost-sharing.

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Will Jack Lew curb tax inversions on his own?

Will Jack Lew curb tax inversions on his own? | Totally Tax | Scoop.it

The Treasury Department put out the word that Secretary Jack Lew is considering regulatory curbs on corporate tax inversions, a step that may be intended to increase pressure on Congress to act once it returns from its summer recess in September.

Chris Bale's insight:

Great article by Mr Gleckman...


The Treasury Department put out the word that Secretary Jack Lew is considering regulatory curbs on corporate tax inversions, a step that may be intended to increase pressure on Congress to act once it returns from its summer recess in September.


The matter of how much authority Treasury has to limit inversions has generated its own controversy. My colleague Steve Rosenthal and Harvard Law School professor Steve Shay argue that Treasury has broad authority to curb the practice. Others, including USC law professor Ed Kleinbard, are skeptical.


It appears, however, that the Administration may announce a move to limit inversions sometime next month. That could accelerate the pace of deals, as firms and their lawyers rush to beat any curbs. And it surely will increase pressure on Congress to act. Until now, lawmakers have been stuck in the usual partisan mire, unable to respond despite widespread rhetorical concerns from lawmakers of both parties about the practice.


Just by putting out the word that Lew is mulling administrative curbs, Treasury has sent a powerful signal to corporations. If they fear restrictions will be imposed retroactively, it could slow the deal train. But if lawyers don’t take that threat seriously, or write agreements to reflect that contingency, it is more likely to generate a rush to close deals ASAP.




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louise li's curator insight, August 23, 2:36 AM

They should be asking why is this happening and address the cause - being high US corporate tax rates. Lower corporate tax rates assisted the UK.

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Medtronic paid tax lobby group $200,000 to help with Irish tax move via Covidien acquisition

Medtronic paid tax lobby group $200,000 to help with Irish tax move via Covidien acquisition | Totally Tax | Scoop.it
A battle in the US to try to block multinational corporations from shifting their tax base to low-tax countries such as Ireland is heating up.
Chris Bale's insight:

Former US senators Trent Lott and John Breaux have been hired to lobby for companies that want to preserve the option of reducing their corporate tax bills by moving their legal addresses overseas.


Nine US companies that have sought mergers for tax reasons, are considering doing so or are targets of such deals have been pressuring lawmakers since April in regard to legislation to stop the practice, federal disclosure reports show.


They include Medtronic, which is seeking to acquire Dublin-based Covidien. Medtronic paid Breaux-Lott Leadership Group $200,000 (€150,000) in June to try to block legislation from moving forward. Breaux, a Democrat, was once a member of the Senate Finance Committee. Lott, a Republican, is a former Senate majority leader.

US President Barack Obama has ordered officials to find ways to block the deals without congressional action.


To see the full article please click through to the Independent


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Average UK equity partner earnings: Accountants £700k, Lawyers £1.1million

The High Pay Centre has produced a report on Big 4 accounting firms and Magic Circle firms and partner earnings during 2013. 

Chris Bale's insight:

Of the 4,500 equity partners at the firms analysed (2,726 accountants, 1,774 lawyers), average pay in 2013 stood at £700,000 for the accountants and £1,100,000 for lawyers.


Click through to read the report from the High Pay Centre

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Tax directly affects business strategy - Credit Suisse quits commodities trading after US tax settlement

Tax directly affects business strategy - Credit Suisse quits commodities trading after US tax settlement | Totally Tax | Scoop.it
ZURICH (Reuters) - Credit Suisse Group AG will quit commodities trading after chalking up its biggest loss since the financial crisis in 2008, the result of a 1.6 billion Swiss franc ($1.78 billion) fine
Chris Bale's insight:

Credit Suisse Group AG will quit commodities trading after chalking up its biggest loss since the financial crisis in 2008, the result of a 1.6 billion Swiss franc ($1.78 billion) fine from U.S. authorities for helping its clients evade taxes.


The Swiss bank reversed a recent vow to stick with its commodities unit, and thus joins the ranks of trading firms answering regulatory demands for more capital by significantly reducing or even shuttering their natural resource trading arms.

Credit Suisse's fixed income unit outshone both its wealthy client unit and its U.S. rivals with a 4 percent rise in sales and trading, flouting its own downbeat guidance in May. That compares to drops of at least 10 percent at American banks like Goldman Sachs and JPMorgan last week.


Credit Suisse said the commodities cuts, set to save $75 million, would allow resources and funds to be reassigned to its private bank, which disappointed investors with a 39 percent drop in revenue and weaker margins, and swung to a loss due to the fine.

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Macedonia Intends to Set up Tax Haven - further details in October

Government plans to establish a tax haven that will encourage wealthy corporations to move their operations to Macedonia have won a mixed response.
Chris Bale's insight:

Macedonia's Prime Minister Gruevski insisted the plan will not attract criminal money, but will boost employment.

“We aim to open an international financial zone on an area of 10 to 20 hectares where we will copy the financial laws from countries such as the United States, Britain or Germany, which will additionally boost its credibility," he said.


"The regulations will be taken from these top economies and companies that decide to move their HQs here will be offered additional tax and other benefits,” he explained.

The government plans to give more details about the draft law soon after the constitutional changes are adopted by parliament, which should happen by mid-October.

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FTSE 100 Increases Tax Litigation Provisions for next year to £2.39 billion - mainly from Pharma

FTSE 100 companies have had to increase the amount of money they set aside to cover the cost of tax disputes and litigation by an additional £139m taking provisions for tax disputes to £2.39bn in the last year - up from £2.25bn in the previous year.

 

Chris Bale's insight:

FTSE 100 companies have had to increase the amount of money they set aside to cover the cost of tax disputes and litigation by an additional £139m taking provisions for tax disputes to £2.39bn in the last year - up from £2.25bn in the previous year.

 

Thomson Reuters says that with tax authorities around the world continuing their efforts to increase tax revenues, companies continue to find themselves in potentially costly tax disputes which individually can be worth hundreds of millions of pounds.

 

UK listed pharmaceutical companies made the biggest provisions for tax disputes and litigation in the last year, with the three big UK pharmaceutical companies accounting for 79%, or £1.89bn, of the total FTSE 100 provisions for tax disputes and litigation. That was an increase from £1.68bn in the previous year.

 

AstraZeneca made the largest provision for tax disputes out of all FTSE 100 companies, increasing its provision from £1.32bn to £1.53bn.

 

Pharmaceutical companies can come under intense scrutiny by tax authorities over their transfer pricing arrangements - the allocation of the costs of an international business across the different countries in which it operates.

 

Transfer pricing may result in potential profits in higher tax jurisdictions being moved to lower tax jurisdictions. Tax authorities will investigate if they think the company has used artificial arrangements to achieve that result.

 

It is not uncommon for a global pharmaceutical company to be subject to a number of different transfer pricing investigations undertaken by different tax authorities around the world.

 

“Pharmaceutical companies have been at the centre of many of the biggest ever tax disputes. That is partly become the revenues that flow from one part of a pharmaceutical business to another are huge – meaning so much potential tax is at stake,” Raichel Hopkinson, Head of the Practical Law Dispute Resolution Service at Thomson Reuters, explains.

 

“Under pressure from governments to recoup more tax, authorities around the world have been adopting much more aggressive methods and interpretations of tax rules to clamp down on what they see as tax avoidance by businesses.”

 

Thomson Reuters legal business says that as well as facing investigations into their own affairs financial services companies are increasingly at risk of blockbuster fines where they are seen to have assisted their customers in tax evasion or avoidance. For example, at least three FTSE 100 financial services groups have confirmed that they are under investigation by the Department of Justice in the US relating to tax evasion by US clients.

 

Credit Suisse recently agreed to pay a US $2.6billion penalty in relation to possible tax evasion by its US clients.

 

The success of businesses in tax litigation is not only important in terms of avoiding fines but also because successful tax litigation can see tax payments reduced and provisions released back to the company. For example one FTSE 100 company was able to release back £137m in taxes as a result of a successful resolution of a dispute.

 

However, Thomson Reuters adds that becoming involved in a lengthy tax dispute in public may also have considerable effects on the company’s reputation and brand.

 

“The public’s perception of a company is partly based on whether it is a ‘good citizen’ and that includes being seen to pay a fair amount of tax.  Protracted litigation over tax issues may be damaging from a PR perspective,” says Raichel Hopkinson.

 

“That’s especially an issue for a company that is consumer-facing.”

 

 

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A refreshingly frank and unscripted conversation with women of the PwC US Leadership Team.

This is a 5 minute youtube video just released by PwC USA where 4 women from the leadership team talk to a mixed male/female audience about their experiences and offer advice to aspiring female partners.

Chris Bale's insight:

This is a 5 minute youtube video just released by PwC USA where 4 women from the leadership team talk to a mixed male/female audience about their experiences and offer advice to aspiring female partners.


Personally I found the discussion really refreshing. Often these sort of diversity meetings are rather stage-managed and scripted. This is obviously not the case here and it is all the more engaging as a result.



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Is there an internal power struggle at the IRS ? 4 senior resignations in a month does not look random.

Is there an internal power struggle at the IRS ? 4 senior resignations in a month does not look random. | Totally Tax | Scoop.it
There have been disturbing departures from the IRS recently. Are more coming?
Chris Bale's insight:

Two weeks ago it was announced that Michael Danilack, deputy IRS commissioner (international), IRS Large Business and International Division (LB&I), was leaving. Last week brought two other resignations from the same division: Samuel Maruca, director of transfer pricing, and Diana Wollman, director of international strategy. This week we learned Laura Prendergast — acting deputy commissioner (domestic) is leaving as well. 


So what’s going on? Is this an internal war at the tax agency, specifically in LB&I – a power struggle, if you will? Or is it the more predictable result of competent IRS leaders, who could easily make more money in the private sector, deciding to escape an agency that is being treated like a political piñata? Or is this the new IRS commissioner cleaning house? 


No doubt the truth will out very soon, once any gagging restrictions have expired.

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louise li's curator insight, July 10, 1:40 AM

Is this change indicative of a change in international tax policy or something else?


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Offshore secrets of the UK's wealthy political donors revealed by The Guardian today - time for a register of Channel Islands trusts ?

The first in a series revealing the offshore links of the elite, as obtained by the International Consortium of Investigative Journalists, names party donors who have given six-figure sums
Chris Bale's insight:

It reads like a Who's Who of Britain's most prominent political donors; the wealthy elite who have donated six-figure sums – and who happen to manage some of their financial affairs offshore.


Their names have emerged as part of leaked offshore client lists from the "wealth management" firm Kleinwort Benson, obtained by the International Consortium of Investigative Journalists.


All the donations and offshore structures have been perfectly legal, to use a phrase beloved of tax lawyers. But full transparency has been previously lacking, because there is no register of trusts, and has been no automatic disclosure of Channel Islands client details to the authorities.


In the interests of transparency, the Guardian and ICIJ are publishing some of our findings in a register over the coming days, detailing the offshore links of political donors, international celebrities, judges, sportsmen, businessmen, and British aristocrats.

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Glencore unit suspends Zambia copper projects over $200 million tax row

LUSAKA (Reuters) - Glencore-owned Mopani Copper Mines has suspended some of its planned $800 million Zambian copper mining projects after the government withheld $200 million in tax refunds, the company
Chris Bale's insight:

Glencore-owned Mopani Copper Mines has suspended some of its planned $800 million Zambian copper mining projects after the government withheld $200 million in tax refunds, the company said on Wednesday.


Africa's second-largest copper producer is withholding a total of $600 million in VAT refunds owed to mining firms and will only repay the cash when companies produce import certificates from destination countries, the minister of mines said in June.

Zambian Finance Minister Alexander Chikwanda said in August it planned to waive the requirement because it is impractical. The Zambia Revenue Authority says it is still consulting with exporters before implementation.


"I would like to express my concern and distress that the continued withholding of our refunds to the tune of $200 million may force us to slow down progress on these projects," Mopani's chief executive, Danny Callow, said in a statement.

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Former Head of Tax & Treasury at Wm Morrison, Paul Coyle, charged by FCA with insider dealing

The Financial Conduct Authority (formerly known as the FSA) today charged Paul Gerard Coyle (DOB: 20/04/1964), the former Treasurer and Head of Tax at Wm Morrison Supermarket plc (Morrison) with two offences of insider dealing, contrary to Section 52(1) of the Criminal Justice Act 1993.

Chris Bale's insight:

The Financial Conduct Authority (formerly known as the FSA) today charged Paul Gerard Coyle (DOB: 20/04/1964), the former Treasurer and Head of Tax at Wm Morrison Supermarket plc (Morrison) with two offences of insider dealing, contrary to Section 52(1) of the Criminal Justice Act 1993.


The offences relate to trading in Ocado Group plc shares between February and May 2013.


Mr Coyle was suspended from his job in January 2014 in connection with the FCA probe.


Press release here: http://www.fca.org.uk/news/fca-charges-former-treasurer-at-wm-morrison-with-insider-dealing

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French farmers set fire to Brittany tax office as a protest against falling living standards

French farmers set fire to Brittany tax office as a protest against falling living standards | Totally Tax | Scoop.it
Angry French vegetable farmers protesting against falling living standards burn down tax and insurance offices in a Brittany town.
Chris Bale's insight:

French vegetable farmers protesting against falling living standards have set fire to tax and insurance offices in town of Morlaix, in Brittany.


The farmers used tractors and trailers to dump artichokes, cauliflowers and manure in the streets and also smashed windows, police said.


Prime Minister Manuel Valls condemned protesters for preventing firefighters from dealing with the blaze.

The farmers say they cannot cope with falling prices for their products.


A Russian embargo on some Western goods - imposed over the Ukraine crisis - has blocked off one of their main export markets.

About 100 farmers first launched an overnight attack on an insurance office outside Morlaix, which they set light to and completely destroyed, officials said.


They then drove their tractors to the main tax office in the town where they dumped unsold artichokes and cauliflowers, smashed windows and then set the building on fire.

French media said the farmers then blocked a busy main road in Morlaix in both directions.


In a statement, Mr Valls "vigorously" condemned the "looting and destruction by fire" of the buildings.

He said violence was not justified and the perpetrators would be prosecuted.

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Prominent Canadian tax lawyer charged in SNC scandal

Constantine Kyres accused of extortion and obstruction of justice for allegedly plotting to pay for a statement from Riadh Ben Aissa
Chris Bale's insight:

The corporate scandal that has scarred SNC-Lavalin Group Inc. has expanded beyond the company’s Montreal headquarters with the arrest of a prominent tax lawyer who faces criminal charges stemming from an undercover police operation.


Up until the beginning of this year, Constantine Kyres headed the tax group at the Montreal office of Dentons Canada LPP, the multinational law firm that was created when three firms, including Fraser Milner Casgrain, merged in 2013.wfw itax partner london


Click through for the full article in The Globe and Mail


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SMU in partnership with Tax Academy of Singapore launches new Centre for Excellence in Taxation

Chris Bale's insight:

In collaboration with the Tax Academy of Singapore, and with the support of the Inland Revenue Authority of Singapore, the Singapore Management University has launched the SMU-TA Centre for Excellence in Taxation (SMU-TA CET) today.

The SMU-TA CET represents a major new initiative in research addressing international and regional tax issues and taxation policies. It is the first research centre of its kind in Singapore. The aim of the Centre is to produce highly robust research in international and regional tax issues for policy-development and engagement of the international tax community.

SMU President Professor Arnoud De Meyer said, “In its 2010 final report, the Committee to Develop the Accounting Sector (CDAS) envisioned that Singapore should be transformed into a leading global accountancy hub. One of the main recommendations of CDAS was that Singapore should develop a Centre of Excellence in tax. I am extremely happy today that SMU has, with the support of IRAS, entered into a collaboration agreement with the Tax Academy of Singapore to set up this SMU-TA Centre for Excellence in Taxation (SMU-TA CET). I am positive that it will help actualise the vision of CDAS.”

The new Centre will be helmed by SMU Professor of Accounting Sum Yee Loong who has more than 30 years of experience in Singapore and international taxation. Prior to his appointment as SMU Professor, he provided tax advisory services to corporate clients including multi-national companies, financial institutions, international trading companies, manufacturing companies, information technology companies and many international legal firms. His areas of specialisation included corporate structuring & restructuring, restructuring for IPO, mergers & acquisitions and international tax planning.

CEO of the Tax Academy of Singapore, Mrs Eng-Tay Geok Lee said, “The Tax Academy of Singapore has taken a leading role in facilitating the growth of tax expertise. Besides providing the essential building blocks in tax education for the tax professionals, I am heartened that the Tax Academy of Singapore has taken a leap forward by setting up a tax research centre with SMU, a premier university in Singapore, to provide the platform for knowledge exchange and top quality research for tax experts, academics and practitioners from around the world.”

SMU-TA CET will partner members of academia, industry leaders and government officials to produce multidisciplinary research on international taxation, from legal, economic and public policy perspectives. It will receive the support of a soon-to-be established Technical Advisory Panel comprising leading academics and key practitioners, both local and international, with extensive experience and knowledge of global tax trends and issues. The expert advisers will provide technical expertise and guide the SMU-TA CET towards identifying constructive research agenda and producing quality research. 

Centre Director Professor Sum shared that the Centre will first tackle projects on international tax issues that are relevant to Singapore and Asian economies, and look into the impact of the changing global tax landscape on the region’s economic competitiveness. Plans are also in the pipeline for the Centre to develop a post-graduate programme in international tax. 

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R&D Tax market hotting up - boutique firm, HowarthLynch, acquired by Abbey Tax Protection. Who will dominate this market ?

Tax JobsAbbey Tax Protection, the tax fee protection division of the Abbey Protection Group, has acquired Sheffield based HowarthLynch, one of the UK’s providers of
Chris Bale's insight:

The UK R&D market is beginning to get interesting. Today we learnt that one of the boutique firms, HowarthLynch, which was launched only 3 years ago, as been acquired by Abbey Tax. We are also aware of two Law Firms looking to add on R&D tax services to their existing Patent offering.


It is as yet unclear who will dominate this market. On the face of it, very little tax experience is required to build a successful R&D practice, so in theory the market is open to anyone. The margins are not huge for SME clients, so I think the boutiques will service this market and the larger accounting firms will retain their quoted clients. The law firms will probably struggle to make any real in-roads.



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Irish, Dutch and UK law firms now aggressively tarting their tax inversion capabilities to U.S. Corporates

Irish, Dutch and UK law firms now aggressively tarting their tax inversion capabilities to U.S. Corporates | Totally Tax | Scoop.it
NEW YORK (Reuters) - A series of European law firms are aggressively pitching low corporate taxes in their countries to prospective U.S. clients, seeking to tap into the tax inversion frenzy that has seized
Chris Bale's insight:

Article by Reuters. I guess we all knew it must be going on, but interesting to see which law firms are knocking on the doors of US Corporates.


A series of European law firms are aggressively pitching low corporate taxes in their countries to prospective U.S. clients, seeking to tap into the tax inversion frenzy that has seized Corporate America in recent months.


At least eight European law firms are pitching their services to major U.S. law firms and Wall Street banks, hoping that U.S. companies considering an inversion choose Ireland, Britain or the Netherlands for their new tax domicile, according to people with knowledge of the matter.

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Is there a silver bullet for FATCA?

Is there a silver bullet for FATCA? | Totally Tax | Scoop.it

“There are no silver bullets for FATCA” The challenge is that FATCA assumes everyone is an American until there is evidence that they are not.

Chris Bale's insight:

Great article by Haydon Perryman:


I’m going to argue that FATCA is actually quite simple and that there is a silver bullet. I will also argue that there are a few unexploded grenades and if you act quickly you can prevent the pins from being pulled out of those grenades right next to your customers.

(No you can’t pull out the pins and throw the grenades at the regulators.)


FATCA is about four things:


  1. Due Diligence / Documentation
  2. Withholding
  3. Reporting
  4. Governance / Compliance / Certifications

FATCA has been around for more than four years now. Hopefully most of us now fully understand that divesting from US markets and exiting American customers won’t get us “off the grid” for FATCA. Such an approach robs institutions of American revenue streams and leaves the cost of FATCA largely unchanged.


The challenge is that FATCA assumes everyone is an American until there is evidence that they are not – exiting American customers does nothing to help with the burden of evidencing that our remaining clients are not Americans. Again, this would be a subject for another paper – but my hope is that by now no one seriously believes that exiting the US market and US customers is a good strategy.

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U.S. Treasury Secretary Calls for Ban on Tax Inversions - just hot air I think

U.S. Treasury Secretary Calls for Ban on Tax Inversions - just hot air I think | Totally Tax | Scoop.it
Lew wants to "shut down" corporate tax inversions retroactively to May 2014.
Chris Bale's insight:

I think the concern that the rules governing inversions will change is probably overstated, notwithstanding Shire's sudden share plunge.


I am not aware of any US financial policy that has had a retrospective clause to it, and in any case it is extremely unlikely that the Republicans in Congress would allow the necessary legislation to go through. 

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Deloitte believes there is a major transformation going on with in-house tax functions

Deloitte believes there is a major transformation going on with in-house tax functions | Totally Tax | Scoop.it
To learn how Deloitte addresses what transformation means to today’s tax departments and what steps tax executives can take to effectively prepare for and
Chris Bale's insight:

Click through to download the report from Deloitte. Here is an excerpt:


The role of the tax executive can be viewed as having four faces: an operator, who balances tax department costs and service levels to fulfill compliance and planning responsibilities; a steward, who is charged with protecting and preserving organizational assets; a strategist, who provides specific tax direction and aligns tax department activities with broader business strategies; and a catalyst, a driver of action across the business to support financial goals.


In a Deloitte Dbriefs poll on organizational transformation, nearly half of the more than 2,600 non-Deloitte respondents viewed their tax function as spending the majority of its time as an operator or steward of the business. Less than one-third regarded the tax executive as a catalyst or strategist for organizational change and growth. 


Transformation offers tax executives the opportunity to expand their skills in these two vital and challenging roles and increase their value to the organization.


For years, tax departments remained in the shadows as transformation swept across other business functions. Now, it’s the tax department’s turn to step into the spotlight. With a clear view of how the tax function’s role can evolve and expand, and the commitment of the CFO and tax executives, something big can indeed happen. The tax function can enhance operational efficiency at a global level and contribute significantly to decision-making across the business. Its operations can become more transparent to CFOs and other senior executives, from performance and risk management perspectives, in much the same way other business functions have become in the past decade or two. And, importantly, tax executives and other tax specialists – especially those willing to develop a broader understanding of the business and play leadership roles in the transformation – should be able to build eminence within the business and lay the foundation for career growth in the future as the business reaps the rewards of the transformation.

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Salix to Merge With Cosmo in Latest Tax Inversion Deal

Salix Pharmaceuticals Ltd. agreed to buy patents to three gastrointestinal drugs from Cosmo Pharmaceuticals SpA for about $2.7 billion in stock, allowing the U.S. company to move to Ireland and lower its tax bill.
Chris Bale's insight:

Salix Pharmaceuticals Ltd. (SLXP) agreed to buy patents to three gastrointestinal drugs from Cosmo Pharmaceuticals SpA (COPN)for about $2.7 billion in stock, allowing the U.S. company to move to Ireland and lower its tax bill.


Salix, of Raleigh, North Carolina, will merge with an Irish unit of Lainate, Italy-based Cosmo, the companies said yesterday in a statement. Salix shareholders will own just less than 80 percent of the combined company, which will be renamed Salix Pharmaceuticals Plc, and Cosmo will own the rest.


The transaction adds to the wave of U.S. companies gaining an overseas address as a way to lower their tax rates. AbbVie Inc. is bidding for Shire Plc for to execute a similar tax inversion. With the deal, Cosmo is reversing its decision to try to market some products on its own in the U.S.


“It’s a very good deal because first of all you get these shares which are valuable and are real currency, and on the other hand the company retains the rights outside of the U.S.,” said Friedrich von Bohlen, managing director of Dievini Hopp Biotech Holding GmbH, Cosmo’s second-largest shareholder. “It’s a leapfrog into the U.S. market without any incremental costs.” Von Bohlen is also a member of Cosmo’s board.

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How will Juncker handle the embarrassment of continuing with infringement proceedings against his own country, over tax rules introduced during his premiership ?

How will Juncker handle the embarrassment of continuing with infringement proceedings against his own country, over tax rules introduced during his premiership ? | Totally Tax | Scoop.it
Next week we expect Jean-Claude Juncker, the former long-standing prime minister of Luxembourg, to be nominated to the powerful role of President of the European Commission. The man who for many years defended one of Europe’s nastiest and biggest secrecy jurisdictions (or tax havens) now faces an important question. Will he continue discreetly to find …
Chris Bale's insight:

Next week we expect Jean-Claude Juncker, the former long-standing prime minister of Luxembourg, to be nominated to the powerful role of President of the European Commission. 


The Financial Times has reported on a recent European investigation into the tax arrangements of various large multinationals, including practices of individual tax rulings by Luxembourg which are profoundly corrupting of markets and the business environment. The European Commission (EC) has asked Luxembourg to provide information it needs to complete its probe; Luxembourg, recalcitrant as ever, is refusing to co-operate. The EC has launched legal proceedings against the little tax haven to get the information. As the FT puts it:

“Foot-dragging by Luxembourg over an EU probe into questionable tax deals for multinational corporations has created a potential conflict of interest for the Grand Duchy’s former premier who is set to head the EU’s executive branch. . . . If Luxembourg refuses to comply, Mr Juncker could be faced with the embarrassment of continuing with infringement proceedings against his own country over tax rules introduced during his premiership.

This particular probe is going to be very awkward for him, as an EU official explains. But this is just one angle in what is potentially one hefty great long-running conflict of interest.

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