#60 Trusts and ownership avoidance
#59 Tax Inspectors Without Borders
#61 Public contracts: tax dodger free zones
Guests

In the December 2016 Tax Justice Network podcast: In trusts we trust? We look at the new game in town: beneficial ownership avoidance, the booming industry in alternative escape vehicles from public registers and why we must shine the spotlight on all of them. Plus: we discuss two big stories we think will define 2017: the race to the bottom between nations on tax aka a transfer of wealth to the corporate community, and how the world’s biggest havens are increasingly having to account for the devastating effect their tax and/or financial secrecy policies are having on human rights around the world…

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Jargon
Beneficial Owner

The person who actually benefits from the income or capital associated with owning something, and/or on whose behalf a transaction is being conducted. They are often different from legal or nominee owners, who may just be proxies who get no benefit from the asset, whose identity is used to hide the real beneficial owner.

Secrecy Jurisdiction

A tax haven or secrecy jurisdiction is a place that deliberately provides an escape route for people or entities who live or operate elsewhere. They shield them from whatever taxes, criminal laws, financial regulations, transparency or other constraints they don’t like. Ordinary people whose lives are affected by tax haven laws are not consulted on these laws because they live in other countries: they have no say in how those laws are made, thus undermining their democratic rights.

Tax Haven

A tax haven or secrecy jurisdiction is a place that deliberately provides an escape route for people or entities who live or operate elsewhere. They shield them from whatever taxes, criminal laws, financial regulations, transparency or other constraints they don’t like. Ordinary people whose lives are affected by tax haven laws are not consulted on these laws because they live in other countries: they have no say in how those laws are made, thus undermining their democratic rights.

Offshore

A tax haven or secrecy jurisdiction is a place that deliberately provides an escape route for people or entities who live or operate elsewhere. They shield them from whatever taxes, criminal laws, financial regulations, transparency or other constraints they don’t like. Ordinary people whose lives are affected by tax haven laws are not consulted on these laws because they live in other countries: they have no say in how those laws are made, thus undermining their democratic rights.

Tax Avoidance

Tax evasion is an illegal – usually criminal – activity, by which a taxpayer escapes tax through deception. Tax avoidance, on the other hand, means getting around (or avoiding) the spirit of the law without actually breaking the law. There is a large grey area between the two poles of avoidance and evasion.

Trusts

A trust is an arrangement that separates out ownership of an asset. Under a standard trust a person gives up an asset for the benefit of someone else (the beneficiary) under a set of rules (the trust deed.) These rules are enforced by a third person, the trustee. Trusts are used extensively in tax havens, whose laws provide secrecy which allows the original owner to pretend to have given away the asset while in reality still controlling it. This allows them to potentially escape the tax bill on its income, or hide links to money laundering or other criminal activity.

5 Rs of Tax

Revenue, to fund public services, infrastructure and administration.
Redistribution, to curb inequalities between individuals and between groups.
Repricing, to limit public “bads” such as tobacco consumption and carbon emissions.
Representation, to build healthier democratic processes, recognising that higher reliance of government. spending on tax revenues is strongly linked to higher quality of governance and political representation.
Reparation, to redress the historical legacies of empire and ecological damage.

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