Tax haven Feed

In case you missed it as the 113th Congress wrapped up its frantic lame duck days, it did manage to keep Internet access for most folks safe from taxation for another fiscal year. One of the provisions packed into the $1.1 trillion federal spending package passed in mid-December was an extension of the moratorium on local and state taxes for Internet access through October. A quick note for all y'all logging on in Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Wisconsin and alongside me here in Texas. We'll still see taxes on our Internet providers' bills because the taxes... Read more →

Domenico Dolce and Stefano Gabbana, founders of the high-end Italian fashion label Dolce & Gabbana, are no longer convicted tax evaders. Italy's highest court on Oct. 24 overturned two lower court convictions that the duo had participated in what Italian prosecutors called a "sophisticated tax fraud" scheme. Dolce and Gabbana had been found guilty in April 2013 of using a Luxembourg holding company to avoid paying taxes of €200 million ($253.39 million U.S. as of this morning's exchange rate) on royalties for sales in 2004 and 2005. That sizable chunk -- I'm going with the more than $253 million U.S.... Read more →

Fashionistas are wrapping up a month of shows that have taken them from New York to London to Milan and now Paris. One big name designer, however, might not be paying as close attention as usual to the City of Light's catwalks this week. A couple of Prada executives have taxes instead of tailleur on their minds. A month of global fashion weeks, during which designers preview their coming spring and fall clothing lines, concludes this week in Paris. Click the image for a glimpse of what the rich and famous might be wearing in early 2015. Prada chairwoman Miuccia... Read more →

The biggest complaint about the U.S. tax system is that it gives Uncle Sam too much of our money. There are lots of contenders for the next biggest tax complaint. One, however, is getting special attention right now. It's the dissatisfaction with the Internal Revenue Code's worldwide reach. The ability of Uncle Sam to tax money earned all over the world has come under scrutiny thanks to the recent rash, Walgreens notwithstanding, of corporate tax inversions. An inversion is an administrative process by which a U.S. company buys a foreign subsidiary and then on paper makes that overseas business the... Read more →

Walgreens, the Deerfield, Illinois-based drugstore chain that's been around for more than a century, is buying the remaining 55 percent of the British pharmacy Alliance Boots. Walgreens had purchased 45 percent of the European pharmacy/retailer in 2012. But unlike many other U.S. companies who've been scooping up overseas operations, Walgreens will not make Great Britain it's official headquarters. The company announced today that Walgreens Boots Alliance, the company that will exist when cash-and-stock deal is finalized sometime next year, will be based in the Chicago area. No corporate inversion planned: Many business, finance and tax watchers had expected Walgreens to... Read more →

The debate on the use offshore tax havens has been heating up. On the individual side, the Internal Revenue Service on July 1 got a new tool, the Foreign Account Tax Compliance Act (FATCA), to track down international accounts the tax man says are used to avoid paying Uncle Sam his due. On the corporate side, the conversation about offshore tax havens went off the charts when the iconic, 114-year-old pharmacy chain Walgreens -- the inventor of the malted milkshake, for heaven's sake! -- announced it was considering moving its headquarters from Deerfield, Illinois, to Switzerland to lower its tax... Read more →

U.S. residents' tax focus this past week was the Internal Revenue Service's latest crackdown on offshore accounts. The dreaded Foreign Account Tax Compliance Act, or FATCA, took effect July 1, giving the IRS another tool to track down international accounts that U.S. citizens use to avoid paying Uncle Sam his due. But one person's tax hell is another person's tax haven. Do you know what tax haven country is home to this ancient castle? That's right. The good old U. S. of A. is considered a fine tax haven for Oz residents looking to pay a little less to the... Read more →

Today is the one day that residents of drought-stricken Texas don't want rain. We want our July 4th fireworks! Of course, we ostentatious celebration loving Texans still realize that one errant spark can ignite a whole swath of dehydrated vegetation. That fiery possibility is probably why we don't object to paying the Lone Star State's tax on fireworks. Limited sales, added tax: Texas fireworks retailers have been collecting a 2 percent fireworks tax in addition to the state and local sales taxes since 2001. Specifically, the tax applies to "small fireworks in the U.S. Department of Transportation's 1.4G category that... Read more →

It's a busy weekend, what with Flag Day and Father's Day and some personal things to take care of, so I'm cutting to the chase with my regular look at noted last week at my other tax blog. First came the news that the Internal Revenue Service has officially adopted a Taxpayer Bill of Rights. This has been a long-time goal of National Taxpayer Advocate Nina Olson, who joined IRS Commissioner John Koskinen to announce the move. Both also used the opportunity to send a message to Congress. The IRS can do a better job of providing customer, i.e., taxpayer,... Read more →

The ability of some major U.S. corporations to avoid domestic taxes by setting up subsidiaries in offshore tax haven countries has gotten a lot of attention of late. But not every company can pull that off. A recent New York Times analysis found that for every Apple, with its 14 percent tax rate on $135 billion in earnings (that comes to a tax bill of just less than $19 billion), there's a KeyCorp, with its 150 percent effective tax rate on $1.33 billion in earnings, resulting in $1.99 billion taxes paid. The newspaper put the corporate tax data into a... Read more →

Taxes, tax havens and how Uncle Sam deals with folks who don't pay what they owe is always a good topic for a lively exchange. This last week was full of such discussions. While federal lawmen were wrapping up some individual tax haven evasion cases, another battle in the corporate tax haven war broke out. Growing offshore businesses: The first volley in the corporate tax scuffle was fired on May 19 by Citizens for Tax Justice (CTJ), a nonprofit research and advocacy organization whose goal is "to give ordinary people a greater voice in the development of tax laws." A... Read more →

The Swiss women's Olympic hockey team took home a bronze medal today, but in the eyes of the Internal Revenue Service, that country is the gold standard for offshore accounts. For years, the IRS has been encouraging U.S. taxpayers who have foreign accounts to 'fess up about where they keep their money. The Offshore Voluntary Disclosure Program, or OVDP, and related efforts offer incentives for taxpayers to disclose their offshore accounts. As long as they pay their delinquent taxes, interest and slightly reduced penalties, they won't face criminal prosecution. They IRS doesn't like the term tax amnesty, but that's essentially... Read more →

Italian fashion designers Domenico Dolce and Stefano Gabbana have officially filed an appeal of their tax evasion conviction. Both men were sentenced in June to one year and eight months each in prison after being found guilty of contributing to tax declaration omissions in the 2004 sale of some of their clothing lines to Gado, a Luxembourg-based holding company. The sale, argued prosecutors, allowed Dolce & Gabbana, as their brand is known, to avoid Italy's high rate by paying a lower tax in Luxembourg. D&G have consistently denied the charges. Their 90-page appeal document, filed this week at Milan's courthouse,... Read more →

"Stay (Faraway, So Close)" isn't just the title of a U2 song. It's a good description of the popular Irish rock band's tax situation. The band, fronted by Bono and The Edge, has sold more than 150 million records and is estimated to be worth around €805 million ($1.1 billion U.S.). And like lots of businesses and their wealthy owners, U2 found a way to reduce its taxes. U2 moved part of its operation from its native Ireland just across the North Sea to Holland in 2006 to take advantage of that country's lower tax rate. The reason? Ireland capped... Read more →

"You now have a Swiss bank account if anybody asks. Crédit Nationale Du Génève code name 'PADDY.' Lavish awkward gesture; all of 15 Swiss Francs in it. But if you ever want to impress anybody, they can find out you have a Swiss account. But Swiss law prohibits the bank from revealing the balance. Thus are all men made equal." Jimmy Dell, a character in the 1997 movie "The Spanish Prisoner," offered that description of the secrecy afforded an owner of a Swiss bank account. Jimmy's words are no longer true. Opening up accounts: Thanks to the Foreign Account Tax... Read more →

French actor Gerard Depardieu is now Belgian actor Gerard Depardieu. The award-winning actor raised eyebrows last year when he decided to take up residency in Belgium after the Socialist government in his native France sought to impose a 75 percent tax rate on annual incomes over 1 million euros, or around $1.34 million U.S. Depardieu decided to move 800 yards across the French border to the village of Nechin, Belgium. It already had earned a global reputation as being the spot for French nationals disillusioned with their country. On Saturday, Aug. 24, those expatriate French got a taste of home... Read more →

Tax avoidance, which by some estimates costs nations worldwide around $3 trillion a year, will be a major topic at the meeting of leaders of the G8 nations -- United States, United Kingdom, Canada, France, Germany, Italy, Japan, Russia -- which began today at the Lough Erne Resort in Northern Ireland. With taxes taking a top spot on the two-day international agenda, the eight world leaders get the honor of being this week's By the Numbers pick. G8 host United Kingdom Prime Minister David Cameron has made no secret that "fighting the scourge of tax evasion" is one of his... Read more →

It's no secret that the United States desperately wants money from taxpayers who have tried to shield their taxable income by putting it into foreign accounts. First, the Internal Revenue Service used information provided by a UBS whistleblower to obtain information about U.S. money hidden in secret Swiss bank accounts. Then the American tax agency continued its offshore voluntary disclosure program, what you and I call a tax amnesty, which has brought in more than $5 billion in previously uncollected taxes. Tougher foreign income reporting requirements also were enacted. And now Switzerland and the United States reportedly are close to... Read more →

The U.S. Supreme Court hasn't always been too keen on taking tax cases. That's changed in 2013. After hearing arguments last week in the Defense of Marriage Act (DOMA) case, which was prompted by a widow's federal estate tax bill because she was married to a woman, the country's highest court then agreed to hear arguments on steep tax penalties assessed tax shelters. The case, United States v. Woods, involves a 1999 transaction undertaken by Gary Woods and his business partner, Texas billionaire Billy Joe "Red" McCombs. The transaction was known as "current options bring reward alternatives," or COBRA. Federal... Read more →

One of the first foreign language films I ever saw was The Return of Martin Guerre. Gérard Depardieu was so great that I made it a point to see every movie he made. Heck, I even dragged the hubby to Green Card. Crazy fans like me have made the actor a very rich man. So rich, in fact, that he recently decided it was time to leave his native France for a nearby tax haven. And by nearby, I mean nearby. Depardieu has settled in Nechin, Belgium, a village just 800 yards from the French border. Not only is Nechin... Read more →