Comics International

The grand tax evasion

e-Trado GmbH

Now the laughing ends - the grand tax evasion in Europe is over

The grand tax evasion

(2014) Tricking and harming, behind these machinations are not only individuals but seasoned corporations with evocative names which utilize the existing legal differences in the EU countries for tax avoidance. Luxembourg, Malta and Liechtenstein are in business as true tax havens, but hardly anyone knew that even the Netherlands are one of the biggest tax havens on earth. Just incomprehensible to the average consumer, who dutifully pais his taxes while the supposedly rich are apparently intent only on still amassing more wealth. This has nothing to do with jsutice anymore, because tax evasion is now a serious offense and the motto "What one does not no does not matter" seems to be valid for tax advisors of large companies, who only semm to look for loopholes in order to save taxes. Politicians, wake up, now it is really time to go against it closed forcefully against it!

The EU closes controversial tax loopholes for business!

It has taken long enaough, but it is never too late for wise decisions. Let's be honest: Haven't you somtimes asked yourself "Why are the rich getting richer and the poor get poorer?", If so, there is a completely logical explanation for this, which is still expressed harmless with the term "tax loophole". Thus, the finance ministers of the European Union last Friday (20/06/2014), have largely agreed to put a stop to the applicable Parent-Subsidiary Directive and double taxation, including the associated tax evasion. This was a unanimous decision, which was submitted on the part of the EU commission to put corporations (enterprises) with no economic substance to a halt. Thus also double non-taxation should soon belong to the past, what countries like Luxembourg or the Netherlands should not particularly like, because after all, they had significantly benefited from the financial investors.

Collective action against tax avoidance!

Low tax rates had really tempted companies to countries such as Ireland, Luxembourg and the Netherlands to make large financial investments, but not anymore. Equal rights, equal duties prescribed by law in uniform guidelines and controlled by the relevant taxation authorities provide also a very effective means to fight so-called mixed forms of equity and debt dar. Thus, for financially strong companies, the payment of interest on corresponding hybrid bonds can prove as being extremely lucrative that bring numerous tax advantages over conventional distributions in the form of dividends. Especially with the previously valid parent-subsidiary Directive, companies and corporations had been able to generate significant tax advantages. Among other things subsidiary interest could make a so-called debt financing fully tax deductible by the parent company, while the parent company's country of domicile could record this as a tax-free dividend income. The term double non-taxation is a much to the delight of the company and to the annoyance of the tax authorities.

On 31 December 2015, the zero hour begins!

All EU member states have agreed to convert all of the policies currently in force in national law on 31 December 2015. This means in plain text,uniform tax rules will be adopted in all member states of the European Community. This measure is long overdue, alleged tax evaders are practically cut off the air overnight. The countdown is on, because now companies, particularly large international corporations still have leeway to exploit one or another loophole. It is not done wit this by far, because Wolfgang Schäuble has already announced to do something against so-called "patent boxes" what happend for the sole reason that companies had generated tax benefits from revenue generated by licenses in different EU member states. This issue will be addressed effectively within a very short time, said Schäuble. The goal is to encourage well-known companies to award research contracts and highly skilled job offers.Although Germany has currently noticed no such patent boxes, because within Germany all taxable profits of enterprises are burdened with uniform 30 percent. This aspect is crucial for Germany not to be considered a tax haven within the European Union, but has one of the highest tax rates.

The most important terms explained in some detail!

Some observant readers will have probably already asked, what is meant is actually behind the mentioned terms such as parent-subsidiary directive, double taxation or double non-taxation? For this reason, we would like to explain the following terms a little more detailed:
Parent-subsidiary directive: The term means nothing else than a uniform policy of the common system of taxation applicable to parent companies and subsidiaries of different member states, which is also applied with the label group policy. Under the amended EC Directive (OJ L 13, January 2004)it is regulated to avoid a possible double taxation or double taxation. Double taxation: A so-called double taxation exists whenever in transactions resulting from tax regulations already taxed profits are taxed again. This is to prevent that the multi-state tax burden is limited. Double non-taxation: This regulates the tax charge on payments and revenue from licenses granted in the tax invoice. This should actually be prevented companies for the same operation can be prosecuted twice for tax purposes, which inevitably had a double non-taxation result.

Negotiated control agreements are strictly checked!

Actually a good thing that some companies from Ireland and the Netherlands have come up with, but now the tax authorities are kurking. The suspicion of a direct subsidy by the two EU member states Ireland and the Netherlands is formally obvious. An extensive review will ultimately shed light on whether the collection of the corporation is to reconcile with the applicable EU state aid rules. Should this not be the case and in no way correspond to these agreements applicable EU law, then of course repayments in no small measure are to be expected. Primarily, these far-reaching investigations are not directed against the companies but against the affected EU member states (Ireland and the Netherlands) themselves. For example Apple has effectively expolited a corresponding loophole in the tax law to escape the tax claims on the part of the U.S. treasury. With the help of the subsidiaries in Ireland just 3.7 percent tax on profits have been retracted due. Since the 1960s Ireland submits lucrative offers in the form of favorable tax rates in particular to U.S. corporations. It is high time to stop this, because equal rights for all honest taxpayers!

Text by e-Trado
Heiko Eschenbach