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Publications of the investigation of the International Consortium of Investigative Journalists (ICIJ) on the Panamanian company Mossack Fonseca was reason of resignation of the Prime Minister of Iceland Sigmundur Davíð Gunnlaugsson. On the background of mass protests, head of the British government David Cameron on Sunday published his tax returns for the last six years. However, the publication’s effect appeared wider than only consequences for those whose names were found in the database. The most severe criticism on the use of offshore companies has come from the European Commission. "We still do not know which part of the action was illegal, but they can be considered unacceptable in any case", - commented the European Commissioner for Economy and Taxes Pierre Moscovici. He promised to update the list of countries uncooperative in tax matters in six months, and to apply sanctions to those who do not change their position (Panama is already in the list). Note that from January 1, 2016, the automatic exchange of data on taxpayers already operates between the EU countries. The union is also preparing new rules on the provision of corporate by-country reporting - they will be even stricter than required by the OECD recommendations, approved by the G20 (Base Erosion and Profit Shifting, BEPS plan). However, OECD will also discuss "the Panamanian case" on April 13.
Meanwhile, the fight against corporate inversion has intensified in the United States. Last week, the country's Finance Ministry has tightened accounting for capitalization of foreign companies competing to become a parent in relation to firms operating in the US. Calculation of taxable profits will no longer include loans if they are not invested in the US economy. According to US President Barack Obama, stricter regulation will benefit "everyone, not just people who find themselves at the top." In particular, the United States restrict the reorganization of corporations using offshore companies outside of the country’s jurisdiction. The new rules have become the biggest obstacle to the deal in the pharmaceutical industry: Pfizer refused to merge with Allergan (estimated at $ 160 billion), as the deal stipulated shifting the company headquarters to Ireland.
The government of Panama also made concessions: President Juan Carlos Varela announced creation of an expert committee to increase transparency of the country’s financial indusrty. Note, according to co-owner of the company Ramon Fonseca, the company had almost no clients from the USA; traces of hacking lead to Europe.
source: reuters.com
Meanwhile, the fight against corporate inversion has intensified in the United States. Last week, the country's Finance Ministry has tightened accounting for capitalization of foreign companies competing to become a parent in relation to firms operating in the US. Calculation of taxable profits will no longer include loans if they are not invested in the US economy. According to US President Barack Obama, stricter regulation will benefit "everyone, not just people who find themselves at the top." In particular, the United States restrict the reorganization of corporations using offshore companies outside of the country’s jurisdiction. The new rules have become the biggest obstacle to the deal in the pharmaceutical industry: Pfizer refused to merge with Allergan (estimated at $ 160 billion), as the deal stipulated shifting the company headquarters to Ireland.
The government of Panama also made concessions: President Juan Carlos Varela announced creation of an expert committee to increase transparency of the country’s financial indusrty. Note, according to co-owner of the company Ramon Fonseca, the company had almost no clients from the USA; traces of hacking lead to Europe.
source: reuters.com