As per Reuters: "The United States, Britain and other large, rich nations reached a landmark deal on Saturday to squeeze more money out of multinational companies such as Amazon and Google and reduce their incentive to shift profits to low-tax offshore havens. Hundreds of billions of dollars could flow into the coffers of governments left cash-strapped by the COVID-19 pandemic after the Group of Seven (G7) advanced economies agreed to back a minimum global corporate tax rate of at least 15%."
A decision to aggressively pursue tax evasion by the G7 -formed by Canada, France, Germany, Italy, Japan, the UK and the U.S.- is a refreshing bit of news. Shame it doesn't address the regular subjects of our investigations. While we have seen, for instance, how the Swiss judiciary rip mutual legal assistance treaties as a matter of regular practice, perhaps it would act differently when requesting authorities dealing with tax matters are from the French, Italian or German jurisdictions. Not that those countries are particularly hostile territories to black money looted in places like Venezuela. The U.S. itself, and the UK of course, embrace with gusto all illicit money that arrives, regardless of origin.
Most of the G7 members have variations of the 183 day rule when it comes to personal tax residency determination. As a consulted source told this site: "you stay, you pay", regardless of nationality. Furthermore, the rule means that -often- individuals are taxed on their global income. President Joe Biden's initiative to pursue tax evaders is targeting big corporations in particular. The Amazons, Googles, Facebooks of this world that are sitting on hundreds of billions of dollars worth of untaxed income held in offshore jurisdictions. But there’s a whole lot of money, that's been syphoned from countries like Venezuela, sitting in banks in G7 countries in personal accounts, or behind shell companies' accounts. In addition, Venezuelan "entrepreneurs", otherwise known as Boligarchs & Bolichicos (junior versions of former), are mostly infatuated with the idea of becoming players in developed nations, in the mould of Elon Musk or Steve Jobs.
Many of the thugs regularly exposed here would find difficult to escape the 183 day rule. The Swiss being Swiss, lowered the limit to 90 days. Better yet, its financial watchdog purposefully exonerates Bolichicos that claim to control Swiss banks. The only relevant question is then: is Switzerland, for instance, taxing the likes of Francisco Morillo, or Alejandro Betancourt, on their global income? What tax arrangement allowed someone like say Luis Oberto, to live in the U.S. for prolonged periods and not having to declare / pay taxes on his global income?
When going after untaxed legitimately-earned corporate profits, or corruption proceeds, a unitary legal framework underpinning taxation is only the first step. The financial sector -elephant in the room- must be made accountable for facilitating tax evasion and money laundering. What would be truly revolutionary would be for President Biden to force Nevada, Delaware and other such states to publish corporate records of Ultimate Beneficiary Owners. That measure would help the IRS to chase tax evaders, domestic and otherwise. Equally revolutionary, would be to see U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) firing away Banca Privada d'Andorra-type of letters to all financial institutions, domestic and otherwise, where untaxed funds / corrupt proceeds are kept. Switzerland's financial sector controls an estimated quarter of the world's illicit money. Every last Swiss bank has dirty money in it, and whatever monies that ended up in that jurisdiction went -almost certainly- through Wall Street or the City of London.
Is President Biden about to turn the screws on Goldman Sachs, JP Morgan or the Big Four? Can anyone imagine Boris Johnson empowering the National Crime Agency to slap with Unexplained Wealth Orders all the thugs that use London's pinstriped brigade to launder their wealth? Will the U.S. and the UK start looking into states / overseas territories that facilitate tax evasion / money laundering? If it is about "greedy villains", not paying their fair share to society, there's a whole bunch of them that would make Bezos look like a saint. They should also be targeted.
It will be fascinating to see how this new announcement plays against the sophistication that Zuckerberg and co can muster to continue avoiding onshoring their profits. What could make the world a different place would be to see G7 becoming a hostile, heavily regulated area for untaxed, stolen capital flying from Nigeria, Russia, Venezuela, Brazil, India, China... that'd be newsworthy!