Category Archives: European Tax & Money Havens

Tax office in Italy secretly used tax money on private planes, parties and yachts

European Tax & Money Havens,

Italian police arrested the head of a tax collection agency in Genoa and four employees on Wednesday on charges of pocketing around €100m (£80m) from the money they gathered and spending it on private planes, parties and yachts

Ever wondered where the tax money goes ?, well now you know, the tax collectors seems to have a good time.  Most likely this goes on in most other countries as well.

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Tributi Italia (Italy Taxes) collected local taxes under contract for 400 town councils, but finance police in the northern city of Genoa (pictured) said the agency’s boss, Giuseppe Saggese, set up a system to siphon funds into the agency’s own bank accounts.  Source: The Telegraph

According to the Telegraph: The news will infuriate Italians who have had to dig deep to pay higher taxes, imposed to rein in the country’s massive debt, while watching a succession of scandals involving the misuse of public funds.

Tributi Italia (Italy Taxes) collected local taxes under contract for 400 town councils, but finance police in the northern city of Genoa said the agency’s boss, Giuseppe Saggese, set up a system to siphon funds into the agency’s own bank accounts.

The money was used to pay for “private planes, yachts, expensive cars, luxury holidays, extravagant parties and music concerts,” said prosecutor Franco Cozzi in a statement. Mr Saggese himself pocketed at least €20m, it added.

Mario Monti’s technocrat government is trying to crack down on tax evasion. Resulting tough measures adopted by collection agencies have created widespread resentment.

The president of the regional government of Lazio resigned last month over a case involving embezzlement of party funds and members of the Campania, Lombardy and Calabria governments are also under investigation for misuse of public money.

See the full story in the Telegraph here.

Irish passport granted based on investment, start of a business or Irish ancestry

European Tax & Money Havens, , ,

The Irish government is offering special residence visas to foreign individuals willing to invest in the country.

This new program began on April 15, 2012, and if you make the investment, it can lead to full citizenship. Irish citizenship opens the door to full personal and commercial access to all 27 countries in the European Union.

Ireland’s aim is to attract both money and wealthy individuals from outside the EU who want to take advantage of new and existing investor schemes to immigrate to Ireland.

The virtue of an Irish passport is access to all EU countries, plus visa-free travel to over 150 countries, including the entire British Commonwealth.

Under the new 2012 programs potential Irish investor immigrants have several choices, including an investment in a low-interest bond, or  a venture capital fund, or a property investment or government securities. The minimums amounts range from 500,000 euro to 2 million euro ($627,000 to $2.5 million).

There is also a separate residence visa program for foreign entrepreneurs who wish to start an innovative business valued at a minimum of 75,000 euro ($94,000).

There is another citizenship options in Ireland as you can use Irish ancestry to claim an Irish passport.

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Secretive Andorra opens up to foreign investments

European Tax & Money Havens, , ,

Andorra is an old tax haven in Europe and is well known for its bank secrecy. Andorra plan to liberalize foreign investments and foster more economic openness. This comes as part of Andorra’s policy in the past few years to open its economy.

Back in 2008, Andorra had enacted a law to reduce protectionism in the Principality, and allow 100% foreign ownership in Andorran companies. However, in its recently published implementing regulation, the Andorran government observes this has not been enough and argues that it is necessary to liberalize further.

Under the new law, foreign individuals wanting to exercise a profession in Andorra will no longer be required to have been resident in Andorra for at least 20 years, provided there is a reciprocal agreement between Andorra and the relevant foreign country.

However, a system of authorizations from the administration still applies. Prior authorizations are required for foreigners to own property in Andorra, unless they are individuals resident in Andorra. All investments in at least 10% of the capital or voting rights of an Andorran firm also require prior authorization. Quantitative restrictions on ownership of real estate by foreigners (previously no more than two flats per individual) will be abolished. Portfolio investments do not require authorization, but they must be reported to the registry of foreign investments in the event they are in substance akin to direct investments.

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Gibraltar will cut taxes for shipping and domicile income

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The Gibraltar government has announced a number of tax cuts in the 2012/13 Budget, slashing import duties and cutting personal income tax payable for a number of categories of taxpayers.

In order to be more attractive to foreigners and rise future income, the Gibraltar government has announced a taxpayer-friendly budget, with consolidation efforts instead focusing on restraining government spending.

The most comprehensive changes will come in the area of import duties, which have been reduced or removed entirely for a number of retail goods. Most electrical goods and computer software will be newly exempt from import duties, while duties on perfumes, cosmetics, clothes, jewellery, and mobile phones will be halved.

Import duties on hybrid cars and biofuel are to be removed, and a cash-back scheme will be introduced for persons purchasing environmentally friendly vehicles. In addition, import duties are to be removed on the import of vehicles adapted for use by disabled persons.

In a move aimed at encouraging the registration of super yachts in Gibraltar, seagoing vessels over 18 metres in length will no longer be subject to import duties, while import duties on vessels under 18 meters in length will be subject to a reduced 6% rate. Under the previous regime, vessels of over 80 tons were exempt, while those under 80 tons were subject to a 12% rate.

The only increase to import duties will impact cigarettes. The system of import taxation in this area will be reformed, from a rate applied per kilo, to a rate per packet of 20 cigarettes, with the rate hike adding GBP 0.10 to a packet of cigarettes.

Substantial changes have also been announced in respect of the territory’s two income tax regimes, the Gross Income Based regime and the Allowance Based System.

The government has confirmed its commitment to reducing the maximum rate imposed on personal income tax under the Allowance Based System, to 15% by 2015 / 2016. To begin to reduce effective rates, the rate applicable to the first GBP 4,000 (USD 6,200) of taxable income will be reduced from 17% to 15%. This will exempt taxpayers with earnings of GBP 9,000 or less. Relief will be increased further in 2013, to exempt those with earnings of GBP 10,000 or less.

Taxpayers in receipt of income between GBP 9,000 and GBP 19,500 will receive enhanced tax relief to smooth tax liability disparity between tax-paying and tax-exempt earners. New changes also aim to exempt all disabled working persons from taxation.

Meanwhile, taxpayers under the Gross Income Based system will now benefit from being able to deduct up to GBP 1,000 from their assessable income in respect of mortgage interest payments.

In addition, persons taxed under the Gross Income Based tax regime will be entitled to up to GBP 5,000 in tax relief for approved expenditure incurred on painting, decorating, repair or enhancement, of the frontage of Gibraltar premises, if they are approved by the Town Planner.

Lastly, the cap of GBP 35,000 will be removed in respect of tax relief for private pension contributions.

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UK gives big tax breaks to creative high tech industries

European Tax & Money Havens,

In aiming to establish the UK as the technology centre of Europe, the government hopes that the tax breaks will support technological innovation and ensure that creative industries continue to contribute to economic growth.

The UK’s creative industries are set to benefit from new “world class tax breaks” unveiled by Chancellor of the Exchequer George Osborne in a move designed to encourage innovation and investment.

According to Osborne, the reliefs will be among the most generous in the world, and will build on the success of the UK’s existing Film Tax Relief. The government is now consulting on plans announced in Osborne’s 2012 Budget, which outlined proposals for tax reliefs targeted at animation, high-end television and video games.

Subject to European Union State aid approval, these corporate tax reliefs will enter into force from April, 2013. The government is keen to repeat the boost generated for the film industry, where tax reliefs provided around GBP 95m (USD 150m) of support and helped over GBP 1bn of investment in 208 films in 2009/10.

The consultation invites views from individuals, companies, and representative and professional bodies on the proposed design options. In particular, the government wishes to hear from production companies and those working directly in the production of video games, animation and high-end television.

A separate consultation on the design of suitable cultural tests for each of these reliefs will be launched in the autumn. The tests will identify culturally British works that are to be considered eligible for the new tax reliefs in line with the European Commission’s rules on State aid. In the meantime, discussions will continue with industry-focused working groups and the European Commission.

Osborne explained the government’s initiative: “I want the UK to remain a world leader in the creative industries, that’s why I am announcing tax reliefs that will be among the most generous available anywhere. High-end TV, animation and video games production are exactly the kind of innovative, high-tech industries at which this country excels, and the government is determined to support them as part of our efforts to grow this economy.”

Reacting to the news, Rachel Austin, Deloitte tax director, said: “The aim of the proposed relief to support a sustainable creative industry with a world class skills and talent base in the UK will be welcomed by the industry. However, given the long lead time for productions in these sectors, companies need to know the value of the proposed reliefs as soon as possible to start building it into their planning processes. If the government sets the rate of relief at the right level, the proposals will increase the UK’s competitiveness in these sectors encouraging additional investment in the UK and discouraging UK companies from producing culturally British content in countries that already offer incentives such as Ireland, Hungary and France.”

The consultation remains open until September 10, and the government will publish draft legislation for further consultation in the autumn.

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