Pedestrian bridge in north Phoenix could be completed by August - Arizona Republic

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by Betty Reid - Jun. 25, 2012 07:49 AM
The Republic | azcentral.com

A north Phoenix pedestrian bridge may be ready for use in August when the structure is expected to be completed.

The weathered-looking bridge, which was installed this month, remains under construction on Interstate 17 north of Jomax Road, according to Arizona Department of Transportation officials. The $1.8 million structure, which spans the freeway, aims to connect parts of trails alongside the canal aqueduct.

Work that includes pouring concrete to make "sections of the bridge deck that trail users will walk on" is under way, said Doug Nintzel, ADOT spokesman.

"Lights for the bridge's walkway will also be installed," Nintzel said. "We anticipate the bridge being ready to open as soon as August. We'll work with the city and Central Arizona Project on final plans for an opening, since Phoenix will be maintaining the structure."

Work on the bridge nearly hit a road block in April when a Deer Valley Village Planning Committee member criticized the bridge saying it lacked artistic appeal.

The Federal Bureau of Reclamation, Transportation Department, ADOT and Phoenix partnered to complete the project.

The complaint prompted District 1 Councilwoman Thelda Williams to inquire about adding decorations to the bridge. She found the structure could only hold lightweight features, which could include a coat of paint.

Williams said Tuesday she continues to look at enhancing the bridge visually. She wants to know what type and how much paint would be adequate.

Ray Dovalina, the Phoenix Street Transportation assistant director, said the bridge was not engineered for additions.

Dovalina said Williams' plans to paint the bridge might not be a good idea because "it's (color) just going to weather." He said this type of bridge does not need a lot of maintenance.

Williams said people are inquiring about whether horses would be allowed to cross the pedestrian bridge.

Dovalina said horse riders would be required to dismount at the ramps because the encased bridge is not high enough to accommodate riders.

Arizona Diamondbacks Sweep Chicago Cubs as Wade Miley Continues to Shine - Phoenix New Times (blog)

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mlb.com/dbacks

Wade Miley struck out seven and earned three hits en route to his ninth win of the season against the Chicago Cubs this past weekend.

There were a slew of scowling faces populating the stands at Chase Field this past weekend, but -- for once -- none of 'em were belonged to Arizona Diamondbacks fans. Nope, it was members of the Chicago Cubs nation who were glowering as they watched their team get swept by the D-Backs during their weekend series.

And believe us, Cubbies fans had a lot to frown about. Arizona defeated Chicago quite handily during all three games, winning by at least four runs in each contest. As a result, they increased their current winning streak to four games, got above the .500 mark, and gained ground on both the San Francisco Giants and Los Angeles Dodgers in the National League West standings.

Despite earning a sweep at home, there were a couple of bits of bad news coming out of Diamondbacks land this past weekend.

Joe Saunders was scratched from starting Friday night's game due to a stiff shoulder, and Ian Kennedy's woes continued on Saturday night when he earned 10 hits and five runs in only four innings. (There's also been some recent drama regarding D-Backs play-by-play announcer Daron Sutton, who was mysteriously yanked from the broadcast booth in the days leading up to the weekend series.)

Arizona (37-25) was able to overcome these issues and secure three victories in a row thanks to a combination of poor play by the hapless Cubs (24-48) and strong pitching by both the bullpen and such starters as Wade Miley, who continues to shine.

Josh Collmenter (0-2, 5.27 ERA) filled in for Saunders during Friday's 6-1 win, striking out six and earning only three hits and one run in four innings of work. He may not have earned the victory, but was competent enough to keep the Cubbies in check until the D-Backs bullpen could take over in the fifth. The combo of Brad Ziegler, Craig Breslow, David Hernandez, and Bryan Shaw kept the Cubs scoreless for the rest of the game.

They also got some serious support from Arizona's lineup: Jason Kubel knocked a two-run homer in the fourth, Aaron Hill provided an RBI single in the fifth, and Miguel Montero coughed up a two-run triple in the sixth. Justin Upton continued to rebound from his recent hitless streak with a run-scoring ground rule double in the seventh.

The Snakes were even more productive offensively when they walloped close to a dozen runs off 16 hits on Saturday night, winning 10-5 and roughing up Chicago's pitching staff in the process. A Justin Upton homer kicked things off in the third and was following by six-run fourth inning that saw RBI hits by Kubel, Montero, and Paul Goldschmidt (who came damn close to hitting for the cycle during the game, lacking only a single).

The trio of would each rack up another rib-eye in the later innings. The D-Backs were also aided by a throwing error by Luis Valbuena to catcher Geovany Soto, which allowed Ryan Roberts to score.

And while the Diamondbacks' sluggers were having a night to remember, Kennedy (5-77, 4.42) was experience an evening he'd probably like to forget. The erstwhile ace gave up 10 hits and five runs to Chi-Town over 4.1 innings before he was pulled by manager Kirk Gibson and spent the rest of the game scowling in the dugout.

In a reversal of fortune that only the baseball gods (or many sports wags) would appreciate, Kennedy's struggles were once again contrasted by the continuing success of Wade Miley (9-3, 2.19). On Sunday afternoon, the 25-year-old lefty went eight innings and only notched three hits and one run as Arizona completed their sweep with a 5-1 win. He not only fanned a total of seven during the game (and retired 20 of the first 21 Cubs batters he faced), but also worked his way out of a few jams.

For instance, after walking Soto and giving up a double to Darwin Barney in the eighth, Miley kept his cool and forced Luis Valbuena into a line out and David DeJesus into a soft grounder to escape the inning. Upton also had a great afternoon with RBI hits in both the first and eighth.

If Upton and the rest of the D-Backs can continue their recent scoring streak, they might just keep raking up the victories when they head back east this week for a six-game roadtrip. Their first destination will be Turner Field for a showdown with the middling Atlanta Braves (38-34).

Daniel Hudson (3-1, 6.60) is slated to pitch against the ATL's Tim Hudson (5-3, 3.88) when the three-game series kicks off on Tuesday night. Despite their similar surnames, the two hurlers aren't kin, but will duke it out on the mound like the Hatfields and McCoys when the D-Backs go down to Georgia and try to pick up their fifth straight win. First pitch on Tuesday is at 4:10 p.m. TV: Fox Sports Arizona. Radio: KTAR 620 AM. More info: www.dbacks.com.

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Coyotes make entry draft selections - Glendale Star

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The Phoenix Coyotes acquired right wing Henrik Samuelsson as their first selection (27th overall) in the 2012 NHL Entry Draft June 22 and 23 from the Consol Energy Center in Pittsburgh. Samuelsson, who played for Edmonton of the Western Hockey League, is rated as the No. 75 skater in North America and is known for his physical play.

The Coyotes had seven additional picks in the Entry Draft. Beginning with the 58th selection in the second round, Phoenix took Jordan Martinook, who played for the Vancouver Giants of the Western Hockey League. Martinook scored a career-high 40 goals with 24 assists last season. In two seasons with Vancouver, he scored 51 goals with 41 assists in 144 regular season games.

In the third round (81st overall), Phoenix took defenseman James Melindy, who had nine goals and 18 assists playing in 61 games for the Moncton Wildcats of the Quebec Major Junior Hockey League in 2011-12. He also scored two goals and had an assist in four postseason games.

With the 102nd pick in the fourth round from the Colorado Avalanche, Phoenix took defenseman Rhett Holland. Holland spent last year with the Okotoks Oilers of the American Junior Hockey League, and had three goals and seven assists in 47 games. The Coyotes acquired the Avalanche’s fourth-round selection in a 2010 trade for Daniel Winnik.

In the fifth round (148th overall), the Coyotes chose defenseman Niklas Tikkinen of Espoo of the Finnish Juniors. Tikkinen had goals and 15 assists with the Juniors last season in 39 games with the Under-20 team. He also skated in seven games with Espoo’s Under-18 club, recording three goals and nine assists. Tikkinen represented Finland at the 2012 U-18 World Junior Championships where he had two assists. He was ranked 17th among European skaters in Central Scouting’s final rankings.

In the sixth round (178th overall), the Coyotes took left wing Samuel Fejes of Shattuck St. Mary’s Sabres of Minnesota (high school). Fejes recorded 14 goals and 14 assists in 49 games.

In the seventh round, the Coyotes had two picks. The 184th selection was goaltender Marek Langhamer from the Czech Republic’s Pardubice Juniors. Langhamer posted a 3.29 goals-against average and .909 save percentage in 33 games. The Coyotes picked up Langhamer when they acquired the Montreal Canadiens’ seventh-round pick (184th overall) in exchange for Petteri Nokelainen in 2011. Also in the seventh round (208th overall), the Coyotes took defenseman Justin Hache from the Shawnigan Cataractes of the Quebec Major Junior Hockey League. Hache had two goals and 16 assists in 60 games with the Cataractes this season. He scored one goal in 11 postseason games.

Coyotes acquire Penguins defenseman for players, draft pick

The Phoenix Coyotes acquired former Pittsburgh Penguins defenseman Zybnek Michalek (Z-big-nehk Mih-khal-ihk) in exchange for defenseman Jarrison Ruopp, goalteneder Marc Cheverie, and the 81st selection in the 2012 NHL Entry Draft.

Michalek scored two goals and 11 assists in 62 games with Pittsburgh during the 2011-12 season. He led the team with 144 blocked shots and had an assist and nine blocked shots in six postseason games.

Michalek, 29, had 26 goals and 87 assists in five seasons (2005-06 to 2009-10) with the Coyotes. In eight NHL seasons with the Penguins, Coyotes and Minnesota Wild, the defenseman has 34 goals 113 assists. Michalek has collected four assists in 20 postseason games with the Penguins and Coyotes.

Ruopp had two goals and seven assists in 62 games with Prince Albert of the Western Hockey League this season. He was selected by the Coyotes in the third round (84th overall) in the 2011 Entry Draft. Cheverie split the 2011-12 season between Gwinnett of the East Coast Hockey League and Portland of the American Hockey League. He was acquired by the Florida Panthers in exchange for Justin Bernhardt in 2011. The Coyotes had acquired the 81st overall selection in the Entry Draft from the Philadelphia in exchange for the negotiating rights to Ilya Bryzgalov June 7, 2011.

Group: Court ruling on Ariz. law invites lawsuits - MyFox Phoenix

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By JACQUES BILLEAUD
Associated Press

PHOENIX (AP) - Arizona Gov. Jan Brewer says the U.S. Supreme Court's decision to uphold part of the state's illegal immigration law is a victory for all Americans.

Despite the court striking down key provisions of the statute Monday, Brewer says the heart of the law can now be enacted.

The court ruled that one part of the law requiring police to check the status of someone they suspect is not in the U.S. legally could go forward. However, the court ruled against provisions, including arresting people on minor immigration charges.

Brewer says law enforcement that use the law to violate a person's civil rights will be held accountable.

Critics of the law say it allows police officers to racially profile people.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

FOX 10 News - Phoenix, AZ | KSAZ-TVSuspect dead, 5 wounded in Ky. Shootings - MyFox Phoenix

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By BRUCE SCHREINER
Associated Press

LOUISVILLE, Ky. (AP) - A shotgun-wielding man opened fire on a vehicle passing by his house in rural eastern Kentucky, wounding two people and later injuring three law enforcement officers in a shootout that ended when the gunman was fatally shot on his front porch.

"It was like Vietnam for a few minutes," said Breathitt County Sheriff Ray Clemons, whose department assisted Kentucky State Police after the gunman shot at the two travelers on a highway near his residence close to the Breathitt-Owsley county line.

Authorities took cover behind squad cars in the Sunday evening shootout.

The gunman, identified as Danny Johnson, 59, of the Houston, Ky., community, died of a gunshot wound, Coroner George Griffith said.

Authorities didn't know what sparked the shootout about a dozen miles west of Jackson, Ky., Clemons said.

"He'd shoot four or five times and quit, then start shooting again," the sheriff said in a telephone interview Monday. "They'd try to holler at him to get him to surrender and he'd fire up again."

Clemons said he didn't know the gunman, and said his office hadn't had problems with him before.

Two sheriff's deputies and a state police trooper were shot but didn't have life-threatening wounds, state police Trooper Tony Watts said.

Trooper Joey King was struck in the face with buckshot, he said. Deputy Marvin Reed was hit with buckshot in the shoulder, and Deputy Steve McIntosh was struck with buckshot in the arm and upper chest, Clemons said. Both deputies had minor injuries.

The two people in the vehicle also were hit with buckshot but weren't hurt seriously, Watts said.

Johnson's residence is about 30 yards from the road, Watts said. Johnson fired from inside the house and from the porch, Watts said.

State police said they were alerted at about 8:10 p.m. EDT Sunday that Johnson had fired shots from his house at the vehicle traveling on Route 30.

Authorities sent to the scene made contact with the gunman, asking him to talk to them and he responded by opening fire on them, Watts said. Officers fired back when the gunman refused to stop shooting at them, police said.

Police blockaded the stretch of highway to keep other motorists away from the residence. The standoff ended when Johnson was found shot on his porch, the sheriff said.

Watts said the investigation is continuing.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Grave Secrecy: new Global Witness report fingers UK

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Global Witness has a new report out called Grave Secrecy: how a Dead Man can Own a UK Company and other Hair-Raising Stories about Hidden Company Ownership: which shows how companies can be used as cover to launder the proceeds of corruption, tax evasion and other crimes.

"It is so easy to set up a company in a way that hides the owner’s identity that criminals, terrorists and corrupt politicians can easily move money around the world with impunity. Hidden company ownership facilitates state looting, denying the citizens of poor countries the chance to lift themselves out of poverty and leaving them dependent on aid."

And various jurisdictions including the UK (and New Zealand, which we've been blogging again recently), are collared:

"It is possible to set up a company in the UK (and elsewhere) without even the most basic of checks being carried out on the identities of the supposed owners."

there are plenty of egregious examples of wrongdoing:

"In one example from the report, we found that a Russian shareholder of a UK company died three years before the company was incorporated with someone apparently using his identity to move US$700 million around the world."

There are some very useful explanations of the nuts and bolts of creating secrecy - and we will park this on our permanent Mechanics of Secrecy page on our website as a result. For instance:

"Nobody intending to launder money attempts to do so by opening bank accounts in their own name these days. Instead, they open an account in a company’s name and ensure that it is extremely difficult to find out who is behind the company.

There are two main ways of doing this: registering the company or the parent company in a secrecy jurisdiction (which we address in this section), and using nominee shareholders to disguise the real owners. Registering a company in a secrecy jurisdiction, and thus hiding who owns it, could, to some observers, make the company appear suspicious.

However there is an easy way around this: set up a company in a major financial centre – somewhere with an open shareholder registry, such as the UK – but ensure that this company is in turn owned by companies that are themselves registered in secrecy jurisdictions. So it looks reputable on the surface, but the owner is still, in reality, hidden. This makes the distinction between what are typically thought of as being ‘offshore’ and ‘onshore’ jurisdictions break down: it is extremely easy to hide the ownership of companies wherever they are incorporated, and all jurisdictions, whether ‘onshore’ or ‘offshore, are effectively part of this global system of secrecy."

And it looks in more detail at the multi-jurisdictional nature of secrecy structures, with some examples (such as this one, which is one of the simpler ones):

"Grave Secrecy details how companies which were registered in the UK each had a shareholder in the British Virgin Islands, a secretary in the Marshall Islands and a director in Panama."

Global Witness have also produced an Idiot's Guide to Money Laundering, which will also be lodged permanently on our Mechanics of Secrecy page.

An extremely useful contribution to the literature. There is also a policy summary here.

OECD Admits its Transfer Pricing Guidelines are flawed

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Following our highly successful seminar in Helsinki last week, Transfer Pricing Week (TPW) has reported that the OECD agrees with TJN that their transfer pricing guidelines are too complex and need simplification, and, crucially, that the OECD's supposedly "Arm's Length" method for determining cross-border transactions inside multinational groups -- which we argue is fatally flawed in theory and practice -- is not the only tool in the toolbox.

Addressing the seminar in Helsinki, Marlies de Ruiter, newly appointed head of the OECD's tax treaty, transfer pricing and financial transactions division, admitted that the arm's length method "provides a tool to counteract base erosion and profits shifting, but it wouldn't be effective alone."

We, and many of the delegates in Helsinki, would go a whole lot further than that. While the "Arm's Length" method has been promoted by the OECD for over fifty years, and the OECD claims that over 100 non-OECD countries have now adopted the method, delegates to the Helsinki seminar heard from country officials from around the world that the method is impractical in application and is widely being replaced by profit split arrangements such as unitary taxation.

Delegates from the China, Dominican Republic, India, Indonesia, Nigeria and Tanzania spoke about their experiences of being pushed by OECD officials into adopting the arm's length method, but finding that in practice the data needed to make the method work is of poor quality, expensive, information sharing processes are weak, and in worst case scenarios, comparable data simply doesn't exist. Chennai-based transfer pricing practitioner Vikam Vijayraghaven spoke for the majority of delegates when he lamented: "Comparables - whither art thou?"

De Ruiter also seemed to agree with TJN's assertion that the arm's length method fails to prevent multinational companies from using offshore structures to erode the tax base. As TPW reports:

"Among the core issues she identified were the use of hybrid entities and low tax jurisdictions (tax havens), shifting intangibles, transfer mispricing and a lack of information and resources to tackle it."

This appears to be a damning indictment of fifty years of the OECD failing to get to grips with the issue, and even de Ruiter was forced to concede that the evidence of aggressive tax avoidance by prominent global brands does little to instill confidence in the current method:

"The public opinion is that multinational enterprises such as Apple and Google are not paying their fair share. In these examples it is clear that they are trying to shift their profits and its not fair."

Not fair indeed, but we would argue that MNCs take these steps precisely because the current rules, set by the OECD, are quite simply not fit for purpose, which is why the time has come to look beyond the "Arm's Length" method towards other methods which give primacy to economic reality over the legal fictions that MNCs create in offshore secrecy jurisdictions to squirrel their profits away taxes due.

You can read the full TPW article here.

Closing Remarks at TJN's Transfer Pricing Seminar in Helsinki, 15th June 2012

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TJN is delighted to publish the closing remarks made by Erkki Tuomioja, Minister for Foreign Affairs of Finland, at our seminar on Transfer Pricing in Helsinki last week.

Ladies and Gentlemen,

I have learnt that the seminar proceedings and deliberations have been successful, reflecting the complex mix of issues at stake, as well as its multi-stakeholder set-up that has brought together academic experts, government representatives, tax and development practitioners and well as civil society activists from both North and South. Many important conclusions have been drawn and will be further developed while working towards publishing the results.

In fact, this public event today has on its part already reflected one of the most important conclusions that was taken in the expert seminar: the current dysfunctional tax system is not changed by experts inside conference hall, but by mobilizing the common people on the streets– the tax payers - here in the North and especially in the South, where the implications of tax evasion and loss of compensation for their natural resources is felt most severely. I find it very important that experts and activists take an active role in popularizing the consequences of tax evasion and convert the problems and its consequences into a simple but powerful message for the people to take action. I congratulate TJN and Kepa for organizing today’s event.

As for the actual expert seminar deliberations, I understand that the seminar here in Helsinki has been a very good start. It has created a solid base and gathered a network to continue addressing the problems arising from transfer pricing and its application in different countries. You have been engaged in an intensive, even sometimes - I hear - heated debate about the technicalities of tax legislation but as well about the political opportunities there exist to fix the problem everyone seems to agree with, even if disagreeing the solutions. The commonly identified objective thus being the introduction of a global tax system that would reflect the current realities of global trade and financial markets and result in transparent, equal and socially acceptable new regulations. It seems to me that the seminar has built towards global momentum to make either small or even bigger leaps towards that target.

So, what is there then to take home from here:

Firstly, we need new international guidelines to tackle transfer mispricing as it seems evident that the current rules are not sufficient and have not been developed inclusively. By the words of one seminar participant: we need to make sure that both the future standard and the standard setting process would be inclusive and democratic to all of those concerned. The imbalances of the current set-up need to be corrected.

Secondly, tax issues should be increasingly profiled on the international agenda and in the development policy. As the Millennium Development Goals come to an end in 2015, we need a new development paradigm where considerable importance is given to tax issues that allow better utilization of domestic resources for development, especially now when the nature of development financing is changing drastically.

Thirdly, the capacity of tax administrations both at home and abroad especially in developing countries needs much more attention. The seminar has given voice to our partner country representatives in the South, whom have given their approaches to tax issues, that are of utmost importance in reducing poverty and inequality. Yet, at the same time their knowledge and capacity to comprehend the complexities and consequences are weak and subject to manipulation. We should all look for possibilities to support south-south co-operation on this issue, and in finding best local solutions for each country’s problems – yet keeping global perspective.

The same applies, by the way, to our own country too, where more policy coherence at the inter-ministerial level is needed to bring the global development perspective to tax arena.

Fourthly, facts and figures are powerful messages: therefore we need more independent quality research on transfer pricing and its application on the country level as well as in different groups of industries, not to forget the financial sector MNCs. This request was coming very clearly from our Southern partners, thus we need to be ready to respond their needs.

As for Finland this has been an important event towards more active implementation of our government programme where combating tax evasion is highly emphasized. There are some future steps which my government could consider to play role:

1) Advocate EITI to encompass issues concerning transfer pricing and tax evasion during our upcoming presidency of the Nordic group in EITI. Transfer pricing issues should become part of EITI reports.

2) Joining the UN committee and giving it more profile and capacity to bring together all member states to take forward its recommendations.

3) Looking for possibilities to support studies on the consequences of transfer pricing and the gathering of reliable data and evidence on multinational companies' tax policies.

4) Pursuing automatic exchange of information between states in tax matters and developing the system more developing country friendly.

5) Positioning ourselves at the forefront in advancing the recent EU-directive on country-by-county reporting for mining and forest companies. The future legislation should extend to cover broader reporting standards and all sectors.

6) Demanding more just tax policy to become a crucial part of a company's Corporate Social Responsibility - especially for Finnish companies. Considering setting clear CSR-rules for companies as it seems voluntary guidelines might not be sufficient. CSR should be a priority especially concerning companies with government ownership.

7) Last but not least, striving for increasing corporate transparency by making sure that the public has enough information about Finnish and multinational companies and their global operations.

Finally, we would welcome further opportunities to facilitate a continued dialogue. This could take place for instance by organising a follow-up event as proposed here, in one of our partner countries in the South to address some of the key outcomes of this first Helsinki Transfer Pricing Seminar. I thank all visitors for coming to Finland and hope that you have enjoyed in the seminar and Helsinki.

15th June 2012

New data: Tiny tax haven is EU's biggest outside investor and inward recipient

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Which European country was the largest investor in countries outside the 27-member European Union in 2011? Germany, with its $3.2 trillion GDP? France, with its $2.8 trillion?

No, the prize for largest outside investor by a long way, according to this news release from Eurostat, was . . . . the "Death Star" tax haven of Luxembourg, with a GDP less than one-fiftieth that of Germany's.

And the main European recipient of investments from outside of Europe? Germany again? No. Step forwards . . . . the Grand Duchy of Luxembourg.

Here, specifically, is what Eurostat says:

"Luxembourg, with investments of 110 bn euro, was the largest investor outside the EU27 in 2011, followed by the United Kingdom (89 bn), Germany (34 bn), France (21 bn), Spain (19 bn) and Belgium (16 bn).

Luxembourg (86 bn) was also the main recipient of investments from outside the EU27, ahead of Sweden (16 bn), Spain (15 bn), the United Kingdom (14 bn), France (12 bn) and Germany (11 bn). The role of Luxembourg in EU FDI is mainly explained by the importance of its financial intermediation activity."

Note the role of the UK too, (which attracts a lot of financial attention by virtue of its being a regulatory black hole.)

Read our fascinating history of the emergence of Luxembourg as a financial centre here.

There are plenty of statistics of this kind out there; note Tax Research's recent blog where he quotes a senior Chinese official who estimates that 73% of its foreign trade is with tax havens (that number includes Hong Kong, which is a tax haven.)

For those who read French, there is a fascinating analysis and discussion of this kind of data related to France by Christian Chavagneux at Alternatives Économiques, here.

Another expert criticises OECD transfer pricing rules, says they create 'secret body of law'

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We have assembled quite a roster of high-level experts who are prepared to go on the record exposing the gaping intellectual and practical holes in the OECD's dominant guidelines for taxing multinational corporations. At a TJN seminar in Helsinki last week, quite a few of these experts came together to look at this and to discuss alternatives. And for all those who are prepared to go on the record, there must be many who share our views but for professional and other reasons won't speak out.

Now we have a new high-level expert, who wasn't at our seminar and whom we haven't quoted before, lending his voice: François Vincent, formerly Revenue Canada’s principal legal adviser on transfer pricing matters and now with KPMG as Leader, Global Transfer Pricing Dispute Resolution Services. The OECD Guidelines, he writes, appear not to be science at all:

"Taxpayers, by definition, need to be able to determine the tax payable in order to be able to account for that tax. Conversely, tax authorities need to be able to determined tax payable in order to properly administer their tax system. The needs of both parties are thus convergent. The need for certainty within the context of a tax treaty was organized by the [Canadian] Federal Court of Appeal….. Unfortunately, it is the standard set by the arm’s length principle that creates a systematic impreciseness in its application [our emphasis added, as below].

The main cause may be that, at its root, the arm’s length principle is supposed to match the transactions or dealings entered into either between non-arm’s length entities or between a branch and the rest of an enterprise with similar transactions that would have been entered into between arm’s length entities.

In reality, in all but a few cases, this is simply not possible because the MNE’s transactions / dealings cannot be matched with those of arm’s length parties. Therefore, taxpayers, their advisors and tax authorities are left trying to reconstruct, from largely dissimilar transactions or entities, what arm’s length parties would have done under similar circumstances. This exercise or reconstruction is, in the words of the OECD, “not an exact science”. Given the wide range of results and positions observes, one might remark that it does not appear to be a science at all."

(Extracted from: Francois Vincent, “Transfer Pricing in Canada;” 2011 Edition, Carswell, Toronto (2011)).

This reminds us of comments made at our Helsinki event by Vikam Vijayraghaven, a Chennai-based tax practitioner, who said transfer pricing was as complex as modelling the weather, adding that

"Transfer pricing is not art, it's not science . . . it's magic."

Vincent also says that the OECD’s transfer pricing rules have resulted in a secret body of law:

"One of the greatest current concerns is that transfer pricing has moved many tax jurisdictions worldwide to a state of taxation by negotiation rather than taxation by legislation. This, in turn, gives rise to lack of certainty for taxpayers and the raises the specter of a secret body of law (the compendium of the aggregate of competent authority and arbitration decisions)"

Vincent further emphasises the uncertainty of the OECD’s transfer pricing rules too:

These days it seems that, even though we are virtually inundated with guidance from world tax authorities in respect of how to apply the arm’s length principle, we are no closer to certainty. At the time of getting ready to prepare their tax returns, taxpayers are still scratching their heads as to whether the chosen transfer pricing methodology or method of attribution of profits to PEs will be acceptable to tax authorities……While it is laudable for tax authorities wish to protect their base from unreasonable stripping of profit in favour of low or zero tax jurisdictions, the current state of the application of the arm’s length principle in the vast majority of situations is remarkably imprecise and inherently gives rise to suggestions that either the taxpayers or the tax authorities are abusing the fuzziness of the rules.

Although Vincent says the views expressed above represent the “author’s personal point of view,” his message is highly important, given his professional experiences and associations.

He suggests the systematic application of a global profit-split method, by application of a profit allocation formula. TJN will have more to report about that alternative, quite soon: we discussed it extensively at our Helsinki seminar last week.

Footnote: The OECD admitted that its methods are not an "exact science" in this text:|

However, because transfer pricing is not an exact science, there will also be many occasions when the application of the most appropriate method or methods produces a range of figures all of which are relatively equally reliable. In these cases, differences in the figures that comprise the range may be caused by the fact that in general the application of the arm’s length principle only produces an approximation of conditions that would have been established between independent enterprises. It is also possible that the different points in a range represent the fact that independent enterprises engaged in comparable transactions under comparable circumstances may not establish exactly the same price for the transaction.
With thanks to David Spencer.

New data: Tiny tax haven is EU's biggest outside investor and inward recipient

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Which European country was the largest investor in countries outside the 27-member European Union in 2011? Germany, with its $3.2 trillion GDP? France, with its $2.8 trillion?

No, the prize for largest outside investor by a long way, according to this news release from Eurostat, was . . . . the "Death Star" tax haven of Luxembourg, with a GDP less than one-fiftieth that of Germany's.

And the main European recipient of investments from outside of Europe? Germany again? No. Step forwards . . . . the Grand Duchy of Luxembourg.

Here, specifically, is what Eurostat says:

"Luxembourg, with investments of 110 bn euro, was the largest investor outside the EU27 in 2011, followed by the United Kingdom (89 bn), Germany (34 bn), France (21 bn), Spain (19 bn) and Belgium (16 bn).

Luxembourg (86 bn) was also the main recipient of investments from outside the EU27, ahead of Sweden (16 bn), Spain (15 bn), the United Kingdom (14 bn), France (12 bn) and Germany (11 bn). The role of Luxembourg in EU FDI is mainly explained by the importance of its financial intermediation activity."

Note the role of the UK too, (which attracts a lot of financial attention by virtue of its being a regulatory black hole.)

Read our fascinating history of the emergence of Luxembourg as a financial centre here.

There are plenty of statistics of this kind out there; note Tax Research's recent blog where he quotes a senior Chinese official who estimates that 73% of its foreign trade is with tax havens (that number includes Hong Kong, which is a tax haven.)

For those who read French, there is a fascinating analysis and discussion of this kind of data related to France by Christian Chavagneux at Alternatives Économiques, here.

UK comedian Jimmy Carr apologises: good for him

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We at TJN were as concerned as anyone else with news that the British comedian Jimmy Carr had been engaged in an aggressive tax avoidance scheme via the Crown Dependency of Jersey. The commentary in the UK when the story broke was overwhelmingly negative, with the Prime Minister David Cameron weighing into call it 'morally wrong'. We won't add to all that commentary, but it has been fascinating to watch. The zeitgeist really has changed in the last few years, and we are glad about that.

Today's blogger, who owns up to having a somewhat puerile sense of humour, has for some time enjoyed Mr. Carr's brand of comedy, though his tastes probably aren't always shared by everyone at TJN. But we do generally think that Carr's apology and recognition of error goes a long way towards making amends (and we hope, without knowing any details, that his tax scheme is fully unwound and taxes paid just like anyone else who earns that much.)

Carr's apology sets him apart from many, many other tax-avoiding celebrities, such the Irish rocker Bono, Mick Jagger, Ringo Starr and the irascible Bob Geldof, who have been outed but then as far as we know, have not decided to row back from their contempt for taxes and, by extension, society.

We have just noticed - and with no prior contact with this blogger on the subject - that our colleague Richard Murphy seems to have a similar opinion to us about Mr. Carr.

OECD signs up to Automatic Info Exchange. Hooray.

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For years the OECD, the club of rich countries that jealously guards its role as the arbiter of transparency (or information exchange) in the global economy, has insisted that its hopelessly flawed system of 'on request' information exchange is the 'internationally agreed standard,' and leaders of rich countries have fallen over themselves to endorse the position.

Now the OECD has just issued quite a dramatic statement, which moves them much closer to the position TJN and its allies have been pushing:

"Automatic exchange of information proves to be a useful way to implement enhanced international tax co-operation as shown in the attached report."

That is a tacit recognition that we were right all along: that the far better system of transparency is "automatic information exchange" (for a brief explanation of the differences, see our information exchange page and, more specifically, our briefing paper on it.). Whereas with the 'on request' system you have to already know what you are looking for before you ask for it, automatic information exchange, as the OECD now puts it,

"can help detect cases of non-compliance even where tax administrations have had no previous indications of non-compliance. "

A while ago our Senior Adviser David Spencer explained how - despite the OECD's insistence that 'on request' information exchange is the 'internationally agreed standard' - the much better automatic information exchange is in fact quite prevalent around the world, and is now the emerging standard.

In its latest report, the OECD has 'fessed up to this, saying that:

"Results of a recent survey on automatic exchange conducted by the OECD show widespread use of automatic exchange of information regarding country coverage and income types, transaction values and records exchanged."

Quite so. Automatic Information Exchange is a reality, and countries have shown that handling large volumes of data is quite possible:

• 8 countries sent more than 1 million records in a particular year
• One country (United States) sent 2.5 million records in a particular year
  
• 31 countries combined sent 17.8 million records in a particular year

Considerable sums are involved too:

"The survey shows that the amounts represented by records received can range from as little as EUR several million to well over EUR 200 billion for a particular year."

And the OECD provides a useful graph of which countries are most interested in pursuing automatic information exchange.


The OECD is couple of years behind the curve in wholeheartedly endorsing AIE, but we warmly welcome this catch-up, and the depth of research firepower that they are able to bring to bear. The statement provides more detail:

"The OECD stands ready to develop a multilateral platform to facilitate that practice [automatic information exchange, AIE] for the countries interested in joining the Convention."

The Convention it is referring to is the Multilateral Convention on Mutual Administrative Assistance. We welcome that the OECD is ready to create a platform to make AIE work under the Convention: while it not perfect (read our analysis here, with a slightly different name for the Convention but it's the same thing). It is far better to have a co-ordinated platform developed instead of leaving it to countries to create a hotch-potch of bilateral agreements, which are always easy to avoid.

This OECD report clearly 'gets it' as regards automatic information exchange:

"Automatic exchange as a tool to counter offshore non-compliance has a number of benefits. It can provide timely information on non-compliance where tax has been evaded either on an investment return or the underlying capital sum."

This is precisely why anonymous withholding tax deals à la Swiss are so damaging and useless, as we have demonstrated, and no alternative to AIE. (For more detail on the intellectual, political and economic justifications for information exchange more generally, see the UK's previous endorsement of the concept.)

It is also good to hear that there is a network of offshore tax compliance experts led by France which is

"collating information from member countries about the types of structures, entities and territories they observe being used in offshore evasion into a practical guide to the basic “building blocks” of offshore structures. This will take the form of a catalogue of observed entities, with an explanation of their characteristics, how these vary according to the territory in which they are located and, critically, information about the techniques used to identify when taxpayers are exploiting these entities and how tax administration have been able to determine the beneficial ownership of the underlying assets."

This will constitute a most useful addition to our newish 'mechanics of secrecy' page, when it becomes available.

Another expert criticises OECD transfer pricing rules, says they create 'secret body of law'

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We have assembled quite a roster of high-level experts who are prepared to go on the record exposing the gaping intellectual and practical holes in the OECD's dominant guidelines for taxing multinational corporations. At a TJN seminar in Helsinki last week, quite a few of these experts came together to look at this and to discuss alternatives. And for all those who are prepared to go on the record, there must be many who share our views but for professional and other reasons won't speak out.

Now we have a new high-level expert, who wasn't at our seminar and whom we haven't quoted before, lending his voice: François Vincent, formerly Revenue Canada’s principal legal adviser on transfer pricing matters and now with KPMG as Leader, Global Transfer Pricing Dispute Resolution Services. The OECD Guidelines, he writes, appear not to be science at all:

"Taxpayers, by definition, need to be able to determine the tax payable in order to be able to account for that tax. Conversely, tax authorities need to be able to determined tax payable in order to properly administer their tax system. The needs of both parties are thus convergent. The need for certainty within the context of a tax treaty was organized by the [Canadian] Federal Court of Appeal….. Unfortunately, it is the standard set by the arm’s length principle that creates a systematic impreciseness in its application [our emphasis added, as below].

The main cause may be that, at its root, the arm’s length principle is supposed to match the transactions or dealings entered into either between non-arm’s length entities or between a branch and the rest of an enterprise with similar transactions that would have been entered into between arm’s length entities.

In reality, in all but a few cases, this is simply not possible because the MNE’s transactions / dealings cannot be matched with those of arm’s length parties. Therefore, taxpayers, their advisors and tax authorities are left trying to reconstruct, from largely dissimilar transactions or entities, what arm’s length parties would have done under similar circumstances. This exercise or reconstruction is, in the words of the OECD, “not an exact science”. Given the wide range of results and positions observes, one might remark that it does not appear to be a science at all."

(Extracted from: Francois Vincent, “Transfer Pricing in Canada;” 2011 Edition, Carswell, Toronto (2011)).

This reminds us of comments made at our Helsinki event by Vikam Vijayraghaven, a Chennai-based tax practitioner, who said transfer pricing was as complex as modelling the weather, adding that

"Transfer pricing is not art, it's not science . . . it's magic."

Vincent also says that the OECD’s transfer pricing rules have resulted in a secret body of law:

"One of the greatest current concerns is that transfer pricing has moved many tax jurisdictions worldwide to a state of taxation by negotiation rather than taxation by legislation. This, in turn, gives rise to lack of certainty for taxpayers and the raises the specter of a secret body of law (the compendium of the aggregate of competent authority and arbitration decisions)"

Vincent further emphasises the uncertainty of the OECD’s transfer pricing rules too:

These days it seems that, even though we are virtually inundated with guidance from world tax authorities in respect of how to apply the arm’s length principle, we are no closer to certainty. At the time of getting ready to prepare their tax returns, taxpayers are still scratching their heads as to whether the chosen transfer pricing methodology or method of attribution of profits to PEs will be acceptable to tax authorities……While it is laudable for tax authorities wish to protect their base from unreasonable stripping of profit in favour of low or zero tax jurisdictions, the current state of the application of the arm’s length principle in the vast majority of situations is remarkably imprecise and inherently gives rise to suggestions that either the taxpayers or the tax authorities are abusing the fuzziness of the rules.

Although Vincent says the views expressed above represent the “author’s personal point of view,” his message is highly important, given his professional experiences and associations.

He suggests the systematic application of a global profit-split method, by application of a profit allocation formula. TJN will have more to report about that alternative, quite soon: we discussed it extensively at our Helsinki seminar last week.

Footnote: The OECD admitted that its methods are not an "exact science" in this text:|

However, because transfer pricing is not an exact science, there will also be many occasions when the application of the most appropriate method or methods produces a range of figures all of which are relatively equally reliable. In these cases, differences in the figures that comprise the range may be caused by the fact that in general the application of the arm’s length principle only produces an approximation of conditions that would have been established between independent enterprises. It is also possible that the different points in a range represent the fact that independent enterprises engaged in comparable transactions under comparable circumstances may not establish exactly the same price for the transaction.
With thanks to David Spencer.

Links Jun 22

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U.S.: IRS Pledges to Improve Whistleblower Program TaxProf
Jun 21 - Following an article in Bloomberg (linked recently), the IRS says it "will review its tax whistle-blower program to improve its backlog and working practices, after the program came under fire from politicians and lawyers."
Parliamentarians call for financial transparency Eurodad
Jun 21 - "Members of parliament from Africa, the Caribbean and the Pacific (ACP) and Members of the European Parliament supported key Eurodad demands on tax when they adopted a resolution on the social and environmental impact of mining in developing countries at the Joint Parliamentary Assembly (ACP-EU JPA), in Denmark end May."


Kenya: Executives Set to Pay for Tax Evasion allAfrica 
Jun 21 - "Directors and senior management will now be personally liable for tax offences committed by the firms they work for and will be compelled to pay any dues to Kenya Revenue Authority if such offences are proven."
Swiss and US move forward on tax compliance swissinfo
Jun 21 - Update on Switzerland and FATCA. "The Swiss Bankers Association said it welcomed the move, particularly the fact that banks would be able to hand over data directly to the US authorities and not via the government as in the solution proposed with five European states."
Swiss haven chagrined as commodities traders look East Reuters
Jun 22 - On how: "Singapore is also beating Switzerland at its own game - on taxes."

UK government set to shelve plan to publish ministers' tax returns Guardian
Jun 21- More news on emerging tax dodging scandals of public figures - the government may now be "preparing to abandon plans for David Cameron and senior ministers to disclose their tax returns." (See earlier blog on this story). Interesting to compare with the culture and practice in Finland on public disclosure of taxes paid.

Debate: Nick Shaxson vs. Mr. Angry of the Cayman Islands Treasure Islands
Jun 22 - An intriguing exchange between Nick and Anthony Travers OBE, currently chairman of the Cayman Islands stock exchange, who has been "leading a one-man protest movement against Treasure Islands for quite some time. Some illuminating points emerge.

UK Lord costs £14k+ pcm Cayman Islands News
Jun 22 - Records released following an FOI request show the Cayman Islands public purse is being charged a significant amount by Lord Blelncathra, for playing a role promoting the Cayman financial services industry. See earlier report by The Bureau of Investigative Journalism here.
Who is bailing who out of the leaky boat? The Racoon Arms
Jun 20 - Wrenching story of global interconnections in corruption and inequality. Hat tip: The Cynical Tendency.

Doomsday Prophet Found Guilty Of Tax Evasion Huffington Post
Jun 21 - Er, no comment.

Links Jun 19

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Secret State Golem XIVJun 19 - Some very interesting points raised here. "Recently Off-shore havens have added to financial secrecy another valuable service – data and communications secrecy." The piece cites Nick Shaxson's Treasure Islands.

Los Zetas leader accused of laundering drug money in U.S. quarter horse racing Government Security News
Jun 13 - Report on Mexican drug cartel money laundering of millions of dollars in the U.S., includes use of front companies to disguise ownership.

Vatican bank may fail transparency test Canada.com/Agence France PresseJun 17 - "Moneyval, the Council of Europe's anti-money laundering experts, is due to rule at the beginning of July on the whether the Holy See has cleaned up its act to international monetary standards."

Swiss Bankers Face 'Unprecedented' Challenges Tax-NewsJun 19 - "The Swiss Private Bankers Association (SPBA) has recently published details of its 2011 annual report, outlining the major challenges currently facing the Swiss financial centre, particularly in the area of tax, regulation and financial market access." The article notes: "Switzerland remains the largest cross-border private wealth management market, albeit only slightly ahead of the UK and its satellites (26%), and the US (20%)."
Law firm specialising in tax havens to create 75 jobs in Dublin The JournalJun 19 - One of the most well-known corporate and finance law companies advising international clients on the laws of global tax havens, Maples and Calder, "is expanding its operations [In Ireland] as a result of growing international demand." 

Zambians haven’t benefitted from $8bn copper exports Financial NewsJun 18 - "Zambia is Africa’s top copper producer and it is in the midst of a spectacular boom ... But the tax revenue to build schools, train and employ teachers, sink boreholes and buy medicine has simply not materialised. Wealth from Zambian copper has not trickled down – 64% of the population live on less than $2 per day ..."
Arms and oil bosses refuse to attend corporate responsibility inquiry GuardianJun 17 - Reporting on a UK parliamentary inquiry "into the use of hundreds of millions of pounds of taxpayers' money to help dictators build arsenals and facilitate environmental and human rights abuses."
UK: Tax avoiders have nothing to fear from George Osborne Tax Research UKJun 19 - Richard Murphy explains why "an general anti-avoidance principle rather than a general anti-avoidance rule ... would provide the power needed to deliver a fair tax system in the UK."
Links to some media coverage of the report "Tax Incentives and Revenue Losses in Tanzania", launched by the Policy Forum in collaboration with TJN-Africa and ActionAid, available on the TJN-Africa website. The report is part of a series of studies under the theme: "Tax Competition in East Africa: A Race to the Bottom?"
Hat tip: Alvin Mosioma.Tanzania: Good Infrastructure to Boost Taxes - MPs allAfricaNew report puts Budget in danger The CitizenMPs offer hints to cut tax exemptions IPPmedia

Closing Remarks at TJN's Transfer Pricing Seminar in Helsinki, 15th June 2012

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TJN is delighted to publish the closing remarks made by Erkki Tuomioja, Minister for Foreign Affairs of Finland, at our seminar on Transfer Pricing in Helsinki last week.

Ladies and Gentlemen,

I have learnt that the seminar proceedings and deliberations have been successful, reflecting the complex mix of issues at stake, as well as its multi-stakeholder set-up that has brought together academic experts, government representatives, tax and development practitioners and well as civil society activists from both North and South. Many important conclusions have been drawn and will be further developed while working towards publishing the results.

In fact, this public event today has on its part already reflected one of the most important conclusions that was taken in the expert seminar: the current dysfunctional tax system is not changed by experts inside conference hall, but by mobilizing the common people on the streets– the tax payers - here in the North and especially in the South, where the implications of tax evasion and loss of compensation for their natural resources is felt most severely. I find it very important that experts and activists take an active role in popularizing the consequences of tax evasion and convert the problems and its consequences into a simple but powerful message for the people to take action. I congratulate TJN and Kepa for organizing today’s event.

As for the actual expert seminar deliberations, I understand that the seminar here in Helsinki has been a very good start. It has created a solid base and gathered a network to continue addressing the problems arising from transfer pricing and its application in different countries. You have been engaged in an intensive, even sometimes - I hear - heated debate about the technicalities of tax legislation but as well about the political opportunities there exist to fix the problem everyone seems to agree with, even if disagreeing the solutions. The commonly identified objective thus being the introduction of a global tax system that would reflect the current realities of global trade and financial markets and result in transparent, equal and socially acceptable new regulations. It seems to me that the seminar has built towards global momentum to make either small or even bigger leaps towards that target.

So, what is there then to take home from here:

Firstly, we need new international guidelines to tackle transfer mispricing as it seems evident that the current rules are not sufficient and have not been developed inclusively. By the words of one seminar participant: we need to make sure that both the future standard and the standard setting process would be inclusive and democratic to all of those concerned. The imbalances of the current set-up need to be corrected.

Secondly, tax issues should be increasingly profiled on the international agenda and in the development policy. As the Millennium Development Goals come to an end in 2015, we need a new development paradigm where considerable importance is given to tax issues that allow better utilization of domestic resources for development, especially now when the nature of development financing is changing drastically.

Thirdly, the capacity of tax administrations both at home and abroad especially in developing countries needs much more attention. The seminar has given voice to our partner country representatives in the South, whom have given their approaches to tax issues, that are of utmost importance in reducing poverty and inequality. Yet, at the same time their knowledge and capacity to comprehend the complexities and consequences are weak and subject to manipulation. We should all look for possibilities to support south-south co-operation on this issue, and in finding best local solutions for each country’s problems – yet keeping global perspective.

The same applies, by the way, to our own country too, where more policy coherence at the inter-ministerial level is needed to bring the global development perspective to tax arena.

Fourthly, facts and figures are powerful messages: therefore we need more independent quality research on transfer pricing and its application on the country level as well as in different groups of industries, not to forget the financial sector MNCs. This request was coming very clearly from our Southern partners, thus we need to be ready to respond their needs.

As for Finland this has been an important event towards more active implementation of our government programme where combating tax evasion is highly emphasized. There are some future steps which my government could consider to play role:

1) Advocate EITI to encompass issues concerning transfer pricing and tax evasion during our upcoming presidency of the Nordic group in EITI. Transfer pricing issues should become part of EITI reports.

2) Joining the UN committee and giving it more profile and capacity to bring together all member states to take forward its recommendations.

3) Looking for possibilities to support studies on the consequences of transfer pricing and the gathering of reliable data and evidence on multinational companies' tax policies.

4) Pursuing automatic exchange of information between states in tax matters and developing the system more developing country friendly.

5) Positioning ourselves at the forefront in advancing the recent EU-directive on country-by-county reporting for mining and forest companies. The future legislation should extend to cover broader reporting standards and all sectors.

6) Demanding more just tax policy to become a crucial part of a company's Corporate Social Responsibility - especially for Finnish companies. Considering setting clear CSR-rules for companies as it seems voluntary guidelines might not be sufficient. CSR should be a priority especially concerning companies with government ownership.

7) Last but not least, striving for increasing corporate transparency by making sure that the public has enough information about Finnish and multinational companies and their global operations.

Finally, we would welcome further opportunities to facilitate a continued dialogue. This could take place for instance by organising a follow-up event as proposed here, in one of our partner countries in the South to address some of the key outcomes of this first Helsinki Transfer Pricing Seminar. I thank all visitors for coming to Finland and hope that you have enjoyed in the seminar and Helsinki.

15th June 2012

New data: Tiny tax haven is EU's biggest outside investor and inward recipient

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Which European country was the largest investor in countries outside the 27-member European Union in 2011? Germany, with its $3.2 trillion GDP? France, with its $2.8 trillion?

No, the prize for largest outside investor by a long way, according to this news release from Eurostat, was . . . . the "Death Star" tax haven of Luxembourg, with a GDP less than one-fiftieth that of Germany's.

And the main European recipient of investments from outside of Europe? Germany again? No. Step forwards . . . . the Grand Duchy of Luxembourg.

Here, specifically, is what Eurostat says:

"Luxembourg, with investments of 110 bn euro, was the largest investor outside the EU27 in 2011, followed by the United Kingdom (89 bn), Germany (34 bn), France (21 bn), Spain (19 bn) and Belgium (16 bn).

Luxembourg (86 bn) was also the main recipient of investments from outside the EU27, ahead of Sweden (16 bn), Spain (15 bn), the United Kingdom (14 bn), France (12 bn) and Germany (11 bn). The role of Luxembourg in EU FDI is mainly explained by the importance of its financial intermediation activity."

Note the role of the UK too, (which attracts a lot of financial attention by virtue of its being a regulatory black hole.)

Read our fascinating history of the emergence of Luxembourg as a financial centre here.

There are plenty of statistics of this kind out there; note Tax Research's recent blog where he quotes a senior Chinese official who estimates that 73% of its foreign trade is with tax havens (that number includes Hong Kong, which is a tax haven.)

For those who read French, there is a fascinating analysis and discussion of this kind of data related to France by Christian Chavagneux at Alternatives Économiques, here.

How well is austerity working? In one picture

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We don't often wade into the austerity vs. stimulus debate, since we're basically a revenue-side organisation and this is about both the revenue and the spending side of government. But this one is too good to miss, from a newish Brookings paper by Jay C. Shambaugh of Georgetown University. Click to enlarge.

That doesn't really need commentary, but here is some from the paper itself anyway:

"Figure 10 shows GDP and government spending in the euro area over the last 3 years. Countries making cuts are shrinking rapidly, enough to cause debt to GDP to rise even with budget cuts. Obviously, these countries may be growing slowly for other reasons, but the evidence of the impact of austerity runs deeper. Recent analysis by the IMF showed that austerity tended to generate GDP contractions (IMF 2010)."

That is pretty damning for the economic policies of a large number of countries.

Links Jun 21

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Governments must live up to G20 commitments Christian AidJun 20 - "Christian Aid’s senior economic justice adviser Joseph Stead welcomed the G20’s call for more countries to sign up to a multilateral information sharing agreement between tax jurisdictions. ‘Automatic information exchange is vital if the cloak of secrecy tax havens offer those who use their services is to be lifted,’ he said. ‘By allowing account holders to hide their identities, tax havens effectively condone corruption."
Accounting transparency - European Parliament vote for tougher EU rules would reduce scope for unethical corporations and tax avoidance European Free AllianceJun 20 - Reporting on some very important developments. Hat tip: Alex Mariage.
See also:Action Plan on Tax Fraud and Tax Evasion due this year EuropoliticsJun 20 - "The European Commission will announce, on 27 June, its intention to propose a detailed action plan, by the end of 2012, designed to scale up the fight against tax fraud and tax evasion in the Union and in relation to non-EU countries."
Caribbean Banks Urged To Prepare For FATCA Tax-NewsJun 21 - Overview of measures to implement FATCA, and associated risk factors. Jamaica's Minister for Finance and Planning, Dr Peter Phillips, quoted as saying " ... the message must be that we are facing an increasingly stringent global regime of tax compliance and we need to put our house in order in this regard."

See also:Switzerland and United States announce declaration on FATCA implementation Swiss Federal Department of FinanceJun 21 - "Today, Switzerland and the United States announced a joint declaration on the implementation of the US tax legislation known as FATCA. The details are to be negotiated in the months ahead. The Federal Council will adopt a mandate for negotiating an intergovernmental agreement beforehand. This should increase legal certainty for affected financial institutions and reduce implementation costs." Hat tip: Bruno Gurtner.
See also:Japan, Swiss set up tax deals with U.S. Treasury ReutersJun  21 - "The U.S. Treasury Department said on Thursday it had reached agreements with Switzerland and Japan to crack down on tax evasion by Americans, a move meant to help banks in those countries comply with upcoming U.S. tax regulations. The announcement expands the list of countries already cooperating with the Treasury to implement the U.S. Foreign Account Tax Compliance Act."
Indonesia: Tax fraud: Can we stop it? Jakarta PostJun 20 - "Authorities suspect that there is a so–called “tax mafia” among which many tax-related fraud offenses are orchestrated." The article cites TJN.
Italy PM: Size of Tax Evasion is "Huge Wound" to Our Credibility NasdaqJun 21 - "Italian Prime Minister Mario Monti said Thursday tax evasion is a "huge wound" to the country's international credibility and can be fought with international agreements."
Jersey finance industry defended after tax avoidance claims BBCJun 20 - Reporting on the tax-dodging scheme known as K2. Cites Richard Murphy: "Jersey is a key component in the international tax avoidance industry whose primary purpose is to deny governments the revenues they need to balance their books to provide a stable economy in which people can live, work and thrive."
Tax avoidance isn't a left or right issue, it's a cancer eating our democracy - Everything you need to know about tax. New StatesmanJun 21 - Intriguingly and amusingly expressed views and insights. The piece credits Treasure Islands.