Wednesday, November 12, 2008

Why we have the right to interfere in tax havens' affairs

Our title is taken from a blog that Richard Murphy has posted. It responds to routine "how dare you?" comments from tax haven operators indignant about reputable jurisdictions trying to stop these secrecy jurisdictions' deliberate attempts to undermine their tax systems. These sections of the blog distil the essential points:

"the vast majority of trusts and companies that are created in either Jersey, Guernsey or the Isle of Man are not resident in those places. We do, of course, know this true. There is no significant local market for these structures. That is something the British Virgin Islands demonstrates best. They have incorporated more than 800,000 companies, of which no more than 10,000 actually trade in the place.
. . .
It is simply assumed that companies and trusts incorporated in these places and managed by their professional nominees are regulated ‘elsewhere’ but without enquiry being made or record kept as to where ‘elsewhere’ might be
. . .
It is this combination of deliberately creating structures that can only be of benefit outside their own domains, deliberately providing secrecy and being completely indifferent to the regulation of those entities outside their own domains (however well they might be regulated within them) that creates the legitimate basis for attack on the secrecy jurisdictions from places such as the USA, Germany, France and, I hope in due course, the UK. You cannot declare economic warfare on another state, as the secrecy jurisdictions do, and expect there to be no consequence. Nor can you claim that the issues in question are only of your domestic concern when that is clearly not the case. The secrecy jurisdictions have questions to answer."


Anonymous Eric Grobb said...

Why do I see in your articles so many negative references to the British offshore islands but none that I can recall about the state of Delaware where secrecy also prevails.
One wonders what, if anything Obama is going to do about Delaware, especially since the next VP is from there.

1:47 pm  
Blogger TJN said...

TJN does mention Delaware, quite often. Our latest comment is near the bottom of this recent blog:
"We don't know enough about Biden's intentions or role, but it does worry us that he hails from America's own secrecy jurisdiction, Delaware."

12:47 am  

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