Amid another leak of documents revealing large-scale international tax avoidance, the secretary-general of the Organisation for Economic Co-operation and Development (OECD) said Monday that tax avoidance was fast becoming a thing of the past. “When we’re talking about the ‘Panama Papers’ or ‘Paradise Papers’we’re talking about a legacy that is fast disappearing,” Angel Gurria said. Speaking at the Confederation of British Industry (CBI) conference in London, Gurria said governments were working hard to stop tax avoidance and evasion.
The truth is that for all of the tough talk from Li Xinping about stopping the massive outflows of capital from China, some of it probably dark money obtained from dubious enterprises and kickbacks, nothing has changed in China or in the Western cities eager to share in the wealth. Rich, Young “Fuerdai” Chinese Are Buying Overseas Properties on Their Smartphones. Millennials acquire real estate in other countries as hedge against a weakening currency, homes for their own children when they study abroad
Despite all of the revelations of the sources and methods of the Vancouver housing bubble over the last two years, the situation remains largely unresolved. Ditto in Toronto. The foreign buyers’ tax has had only a limited effect and has problems. Fueled by dark foreign money housed in anonymous offshore shell companies like those disclosed in the Panama Papers, the money is managed by local financial manipulators at the behest of unidentifiable persons overseas. The foreign buyers continue to enjoy the weakest enforcement jurisdiction in Canada
How many shell companies exist in Canada? How many legal trusts? Who are the beneficial owners protected by such unnecessary veils of secrecy? No one knows because in most cases there is no legal requirement to disclose actual ownership even to regulators. In fact, more information is required to get a library card than to set up a company in most jurisdictions in Canada. What we do know is that Canada ranks near the bottom among our OECD partners in terms of corporate disclosure requirements to fight money laundering and tax evasion. A recent report from Transparency International detailed the dismal situation and why our country has become a haven for dubious offshore property speculation.
This is a metaphorical essay on personal ethics, worthy of a serious read and contemplation. When I saw the title I was intrigued but suspected it had something to do with Andy Grove’s adage, “sewage flows downhill,” which means “if anything bad happens it will eventually flow down to you.” This is about ethics. The points made here are particularly apt in light of the huge number and sheer scale of recent business frauds: the Volkswagen fraud, LIBOR, Lehman Brothers, Bernie Madoff’s pyramid scheme, Conrad Black in Canada, Olympus in Japan, Bernie Ebbers and Worldcom, Tyco International, stretching back all the way to Enron, Michael Milken’s junk bonds, and the 1980’s savings & loan debacle.
Pfizer’s announcement this week of its intricate $160 Billion merger/acquisition with Irish pharmaceutical company Allergan, revealed that Pfizer will be moving the new corporate headquarters to Dublin. Essentially, Pfizer, the much larger company, is providing a bridging loan to Allergan to purchase Pfizer so that it may move to Ireland. This enables Pfizer to avoid paying U.S. taxes, even after receiving massive support for R&D from U.S. government programs.
UBS has confirmed it is being investigated by US authorities into whether it helped Americans evade taxes through investments banned in the US. The Swiss bank said US regulators were investigating potential sales of so called “bearer bonds”. These bonds can be transferred without registering ownership, enabling wealthy clients to potentially hide assets. The fresh investigation by the US Attorney’s Office for the Eastern District of New York and from the US Securities and Exchange Commission comes after UBS paid $780m (£512m) in 2009 to settle a separate Justice Department tax-evasion probe.