Tag Archives: Bank Secrecy

Tax advantage in Russia’s Silicon Valley

European Tax & Money Havens, ,

Russia’s Skolkovo To Have Own Tax Regime The head of the Russian ‘Silicon Valley’ project at Skolkovo, Victor Vekselberg, has given an interview to Vedomosti, in which he describes the project and its planned tax privileges in more detail. Skolkovo will have its own special legal regime, he said, which will be managed and funded by a non-profit making foundation rather than a city council. Companies in residence, will be exempt from income taxes on property, and have lower rates of social security contributions,” said Vekselberg, adding that he had sometimes had to raise his voice when discussing tax privileges with the Ministry of Finance. Enterprises should be eligible for duty-free importation of equipment – or subsidies to compensate for duties. According to the draft terms still to be agreed, preferential tax treatment would be given for unspecified periods of up to 10 years, or until annual revenues reached RUB3bn during which time there could be zero taxes on income, property, land, and transport, and no VAT.

Vekselberg said that he would be the first president of the foundation, assisted by co-sponsors on the foundation board of trustees, which would include representatives from the Russian Academy of Sciences, Rusnano, Vnesheconombank, the Russian Venture Company, a Fund for Assistance to Small Innovative Enterprises in the scientific and technical sphere, the owner of the land (а state-sponsored housing association), as well as an association formed by universities. Vekselberg did not exclude the possibility of adding foreign sponsors to the list in due course.


The community is expected to grow to 25,000-30,000 people and premises for postgraduate and doctoral research will be constructed, which should also encompass laboratories, housing, offices, kindergartens, schools and hospitals. The construction alone, excluding research funding, should involve expenditure of USD2bn.

Vekselberg described the construction as low-rise, environmentally friendly and energy efficient. Funding for the first 30 months may reach RUB50-60bn (USD1.7bn-USD2.0bn). It would be state funded and financial contributions from co-sponsors would be minimal. Local services would also be state funded.
The foundation will provide grants for some projects. Companies whose projects are supported will be able to rent premises virtually at cost and will be given tax, customs and other privileges. This way, Vekselberg said, companies will be able to concentrate fully on research without being distracted by bureaucracy and formalities.

A streamlined procedure for the transfer of land would be introduced, which would shortcut planning permission formalities. Import formalities would also be streamlined. Some projects would not have to meet performance criteria, promised Vekselberg; for the first time in Russia, projects may be allowed to fail. In the West, Vekselberg concluded, two successful start-ups out of 10 would be regarded as a satisfactory outcome.

The project is not without its critics, however. Vedomosti quoted, for example, Sergei Mitrokhin, leader of liberal party Yabloko, as saying: “It will be a kind of state corporation, a sinecure; and with the absence of local government (which is in fact unconstitutional), activity will be completely out of control.” 

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French “black list” – St. Kitts and Nevis added

Caribbean Tax & Money Havens, , , ,

St Kitts and Nevis Prime Minister, Denzil Douglas, has denounced the Federation’s placement on France’s new blacklist of non-cooperative territories. He said that efforts taken by the Federation, and by other OECS countries, to meet international compliance standards relating to their financial services sector, is like “working towards a moving target.”

A statement from the Prime Minister’s Office said: “This blacklisting by France of countries that they claim have failed to cooperate on tax issues has caused tremendous concern for the Federation for a number of reasons.”

“The Federation has concluded negotiations and initialed agreements with 17 countries for the exchange of tax information and double taxation agreements by the end of 2009 and was in a position to sign all of these agreements at that time.”

Douglas commented: ”The Federation was told that we would have to wait until these OECD countries carried out their internal bureaucratic processes before we could be given a date or a venue for signature. We were able to sign eight of these agreements by the end of 2009 and we signed our ninth agreement with the UK in January of this year.”

”It is extremely unfair for St Kitts and Nevis to now be penalized by France for not meeting the required standard of 12 signed tax agreements as we sit and wait for OECD member countries to inform us that they are ready to sign these agreements.”

Douglas further informed that, responding to a call by St Kitts and Nevis and other OECS countries for assistance in getting agreements signed with OECD member countries in a more timely fashion, the World Bank has announced the appointment of a consultant to assist the OECS countries with this process.

“This consultant has actually negotiated with France the text of a Tax Information Exchange Agreement on behalf of the OECS countries which the Federation signed off on last month and we are now awaiting a date for signature of this agreement from the French government. It is therefore surprising that despite this development, France has seen it fit to move ahead of its other G20 counterparts to issue its own blacklist and to announce sanctions with effect from March 1, 2010, which are indeed quite punitive and will completely stagnate any investment by French nationals into the Federation and the OECS region. It is of further concern that countries blacklisted by France, even if they meet the international standard one week later, will remain on this blacklist until January 1, 2011, when this list will again reviewed,” the statement noted.

The statement added that it was based on the fear of situations like this blacklisting by France that in March 2009, the government passed the St Christopher and Nevis (Mutual Exchange of Information on Taxation Matters) Act, No 7 2009, which provides the legal framework for the Federation to give the force of law to Tax Information Exchange Agreements (TIEAs) signed by the Federation and allowing the Federation to unilaterally list countries in a schedule to this Act which would be entitled to make requests for tax information to the Federation pursuant to rules which are included in a schedule to this Act.

“These rules are based on the OECD model [TIEA] and are therefore in compliance with the international standard. The reason for the government taking this initiative was firstly to ensure that we would not be hindered by the cost and time involved in negotiating tax treaties to enable us to comply with our international obligations. Our experience in being able to receive dates for the signing of our already negotiated agreements has demonstrated that this fear was in fact justified,” it said.

“The OECD in a publication on its website dated April 21, 2009, entitled ‘Countering Offshore Tax Evasion: Some Questions and Answers on the Project’ clearly stated that the standard for transparency and tax information exchange can be implemented “through bilateral tax treaties or [TIEAs]; by multilateral agreements; or by domestic legislation allowing for the provision of information on a unilateral basis.”

Despite this endorsement of the unilateral mechanism by the OECD in its publication, the unilateral mechanism adopted by the Federation in March of 2009 to facilitate the provision of tax information to countries that make requests to the Federation is yet to be adopted by the OECD as a mechanism for implementation of the standard.

Douglas further noted that the government has been advised that the Global Forum, following an intervention made by St Kitts at the September 2009 Global Forum in Mexico, is now looking into the matter. However, this move to review this mechanism has obviously come a little too late for the Federation and many other OECS countries.

The Federation will be signing a TIEA with six Nordic countries on March 24, 2010, and will at the latest be removed from the OECD “grey list” on that date.

“This being said, we will continue to do our part to advocate for the official recognition of the unilateral mechanism to ensure that in the event that the threshold is again changed in the future, that we will not be in the position we now find ourselves where we are at the mercy of the bureaucracy of OECD countries. We will also continue with our attempts to bring a final conclusion to the negotiations with the countries that we have already initialed tax agreements with and with other countries that we are currently negotiating with,” said the statement.

St Kitts and Nevis has already signed agreements with Monaco, The Netherlands, The Netherlands Antilles, Aruba, the United Kingdom, Denmark, Belgium, New Zealand and Liechtenstein.

Countries the Federation has initialed or concluded negotiations with and are awaiting dates for signature are Australia, Canada, France, Germany, Norway, Sweden, Greenland, the Faroe Islands, Iceland, Finland and San Marino.

Countries the Federation has commenced discussions with about TIEAs but have not yet confirmed the text for these agreements are India, Japan, the Seychelles and the United States.

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Austria – Introduce new taxes on banks

European Tax & Money Havens, , ,

Following the recent banking summit, and Despite bitter opposition from its banks, the Austrian government has announced its decision to enter a bank tax in Austria. According to Finance Minister Josef Pröll, it is Merely a “question of justice”.

Austria’s Chancellor Werner Faymann has confirmed that the introduction of a bank levy is now inevitable, with or without backing from the European Union regarding a Europe-wide tax.

Although the precise details of the tax have yet to be determined, Faymann has made known that the new levy could be introduced from as early as 2011. Determined to consolidate the country’s budget, Pröll is eager to Implement the new levy as quickly as possible.

Proposals put forward by Chancellor Faymann include imposing a levy of between 0.07% and 0.1% on the taxable base. Other details, such as who is to pay the tax, and what the basis for calculating the tax will be, as well as the exact tax rate, have yet to be decided. As a benchmark, has proposed Faymann generating a volume of around EUR 500m annually.

A working group consisting of Representatives from the Chancellery, the finance ministry, issuing banks and other banks, will be set up in order to put forward proposals and to firm up details for the new tax. Nevertheless, Chancellor Faymann has underlined the fact that ultimate responsibility rests with both the government and parliament.

Having agreed in principal to the tax, Josef Pröll once again warned of the dangers of imposing too great a burden on the country’s financial institutions, and reiterates that the burden must not be borne by either borrowers or savers. According to Pröll, the greater the pressure imposed on the banks, the greater the pressure to pass that burden on.

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OECD removed Austria from the grey list

European Tax & Money Havens, , ,

Austria has now officially been removed from the Organization for Economic Cooperation and Development’s (OECD) “gray list” of countries Deemed uncooperative in international tax matters.

Indeed, Austria now appears on the OECD’s much-coveted “white list” of countries that have fulfilled the organization’s 12 official requirement to conclude double tax or tax information exchange agreements, Providing for administrative assistance in tax matters under Article 26 of the OECD Model Convention .

According to the Austrian Finance Ministry, Austria has in fact exceeded expectations, having signed 15 bilateral agreements In accordance with the OECD on tax information exchange standard.

Austria gave the go-ahead for the creation of legislation to relax its traditional banking secrecy laws and conform with OECD standards on tax information exchange at the beginning of the month, and has, since then, been busily Negotiating bilateral agreements ahead of the G20 summit meeting. However, it has made clear that its traditional bank secrecy laws will only be lifted for those accounts held by non-residents who are not subject to Austrian tax.

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