Work together on tax haven tag – Swiss ambassador
Wednesday 28th April 2010, 1:00PM BST.
Chief Minister Lyndon Trott, left, with Swiss ambassador to the UK His Excellency Mr Alexis Lautenberg. (Picture by Steve Sarre, 0960052)
GUERNSEY and Switzerland can work together to break down the perception they are tax havens, according to the Swiss ambassador to the UK.
His Excellency Mr Alexis Lautenberg was in the island yesterday to meet the chief minister, Bailiff and finance industry representatives.
Mr Lautenberg said the economic crisis had put the spotlight on all types of financial regulation, including tax evasion, which led to jurisdictions such as Guernsey and Switzerland coming under pressure.
‘It’s an issue of perception rather than of facts. We are trying to discuss these issues and defend our respective positions. Both are extremely well regulated and doing everything needed to keep the places well run and tidy.’ Mr Lautenberg added that the jurisdictions had very similar relationships with the EU in that both are outside it but closely linked.
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What a shame that people do not believe that these Tax-Havens aren’t there.
Santa Claus knows different, he visits more than once a year.
But something that most people can’t understand-
If they are
not Tax Havens then why can’t the normal banks in whatever land be used.
daft as most unknowing people are, yet still comes the same old question
If they are not Tax-Havens, What is the incentive to bank in these places-
Please don’t tell me because you wish to help out.
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I think the CM has been an absolute first class idiot with this meeting. It beggars belief.
At times when the spotlight is brightly on, & fixed on certain places of interest, it does no good to team up with accomplices that have an even worse history than ones own.
I actually thought LT was maturing with the way he dealt the airport FF fiasco. This has made me realise he is still the fool he always was.
The man has basically announced to Sarkozy & Obama that Guernsey is as thick as thieves with Switzerland. What is the bets he will start harping on about more TIEAs & how open & transparent the industry is.
I hope he feels proud of his incompetence. When the ball is rolling he gives it his best kick towards home goal.
Unbelievable!
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Of course the Channel Islands are not tax havens. Of course no-one evades tax in well regulated Switzerland. Of course its just a mis-perception.
Of course Easter bunnies exist.
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…Relax….and breathe..
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Well said Tom/Jerry!
Of course we are a tax haven,no matter how euphemistic a description is used -avoidance,planning or whatever – money is invested in Guernsey based banks for the sole purpose of not paying the full tax in whatever jurisdiction it is deposited from.
Whilst we’re on the subject when are we going to do something about our unfair and unsustainable “zero ten” tax policy.
It has already been agreed that the policy is wrong (and probably against International rules),but our Government seem to be in no hurry to change it.In the meantime we are losing revenue from every company that operates in Guernsey.
Call me an old cynic, but I wonder if this has anything to do with the number of business people in the States – they’re unlikely to push for something that might hit their own pockets!
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Hello
It been a while since I prattled on about this one but here we go…
No we are not a tax haven.
A tax haven is a place where international organisations or individuals who have a legal duty to pay taxes in a specific country evade paying those taxes by placing them offshore.
We do not do this in Guernsey.
We do business with people and organisations who have NO legal duty to pay taxes in another country. They are not using our tax laws to evade paying taxes due elsewhere – taxes are not actually due elsewhere (or in certain cases where taxes are due then we will pay them).
If the tax laws in other countries allow them to do this then one could argue that those countries should tighten their own tax legislation. OK fair enough, that is their problem, but don’t go accusing us of being a tax haven for illegal tax evasion because that simply is not true.
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And the moon is made of cheese, and Easter bunnies still run around,
As King Wenceslas said,
-just gathering winter fuel, as he last looked out.
So all those rich people who buy houses; thus keeping prices so high that Guernsey people cannot afford are not tax dodging.
Well many do not believe that, and seems to be a poor excuse.
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CD
If your assement of the situation is accurate how come we need to alter our tax system to convince other juristictions of our innocence? Why not just say look were doing nothing wrong sort out your own affairs?
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Hello CD,
Perhaps you could explain why certain U.K. companies,which don’t actually trade in Guernsey,set up offices here if not for the purpose of tax avoidance.
The same can be said for certain wealthy individuals moving here.(e.g E.M.I.)
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Whilst we all shout about the goods and bads of tax MITIGATION, is this story not all about perception??
Afterall, just because we have a lower tax rate than most, why should we get saddled even with the likes of switzerland (ridiculous decision Lyndon)as the villains of the world?? Just because we are an easy target for countries who have let their aspirations over reach their talent and/or resources and need a scapegoat.
And before I get sideswiped by the christian aid brigade (hey that rhymes). As far as I know we never set out to become the hiding ground for every rich persons top tax bracket, I’m not denying that is doesnt happen, but why should we be saddled with the “big villian” tag, when there are so many worse.
Which I beleive is the point of the story (and the meeting, although I suspect the Swiss had more to gain given their “indiscretions” lately)
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Hello? Switzerland?
Happy?
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-when there are so many worse-
So in that case it makes it alright , according to that rather silly statement.
Silly because 2 wrongs don’t make a right- or vice-verse.
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Why are the first words from people we meet for the very first time when we are away from the Island are “Oh tax dodgers” This has only happened in the past few years!
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Tax haven and haven.
Im sure half of our immigrants are rich african lords who have been thrown out of the countrys they have been robbing by the natives. So not so much a tax haven more just a haven eh!
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Tom/Jerry
Try taking the statement in context before you try to belittle it.
I’ll think you’ll find that when you discover the correct context, it makes your response to it seem rather misguided.
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Well Steve-O
Sorry to hear your remarks, however I only wished to stress your point about “other things being worse”
Hence my reference to 2 wrongs not making a right.
Actually I meant it to be a “funny”
Apparently humour is not your strong point.
en passant; It’s believe- not beleive.
‘reply is welcome’
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well, I think that all these companies locate here because of the lovely beaches and glorious weather…
I must go, I skipped my meds this morning, and suspect that Matron has found my hiding place in the broom cupboard…
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Scarlett
I think youve been skipping your meds for longer than that! You seem to have come over all delusional and youve started seeing the world through those lovely rose tainted spectacles again!
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Steve_O, why are you taking a pop at Cristians?
Have you any idea how offensive a remark like that is.
Are you so ignorant of the Cristian holocaust of the first century when people were put to death for believing in the principals of love and denouncing usury.
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There are really two issues here – and they often get mixed up when you talk of Tax Dodge.
The rich people who buy the Guernsey house and become Guernsey to avoid UK etc tax can be said to dodging tax. This has nothing to do with the Finance industry – we just have a much nicer Tax structure and is this our fault? You would also hope that these rich people are living here and spending big bucks in shops etc, therefore helping us all out. Of course this is mostly not true. They have the house and it is empty 360 days of the year – so no real benefit to us. And they force the house prices up – which, as a Guern, is the most annoying thing as I cannot afford a house in MY island.
The Finance industry on the other hand is not tax dodging. Any Companies formed here with a UK etc parent send all profits back the parent where they get taxed. No issue there – so why setup here? We are a wellish regulated (the GFSC will destroy the Guernsey finance industry in about 5 years due to over regulation), well run and respected Finance centre. Some of our schemes are world firsts (PCC companies, ICC companies etc) which give a very affordable model for Companies to run. Lovely. These are Guernsey Companies – so should only Guernsey Tax.
Now in fairness these structures can be seen as Tax efficent, or even tax delaying. But not dodging. OK, some people will be dodging but we try and catch these few.
If the World adopted a single Tax rate there would be no need to dodge tax. And Guernsey would still survive as it is a clever, well run finance industry that makes people money – which they then get taxed on.
PS – the amount of times I almost put ‘dogging’ instead of dodging was insane – if one slipped through apologies.
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Simon;
Now I do not wish to be antagonistic toward you or anyone for that matter.
But I think it rather nice to see the world through rose-tinted glasses now and then,
With those very dark Glasses life becomes like those specs, dull and dreary.
Carry on Scarlett>; I’m off to town to get some of those rose tinted, seems to be fun Yippee!!!
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Yes, companies locate here because of our benign tax regime despite the fact they do not trade here.
They could also choose to locate in the UK, or France of the USA or anywhere else – it is entirely legal and justifiable for them to locate anywhere they like.
It makes sense for them to locate here because the tax rates are lower. They are not avoiding taxes that should rightfully be paid in the UK or France or anywhere else because they do not need to be based there.
Where a company has a physical operation in a specific country it will pay all the taxes that are due in that country. A widget maker in Woverhampton pays UK income tax, employee national insurance, VAT, council tax and all the other taxes payable by any other UK operating company.
The tax advantages are usually connected to the ownership of the company, not the trading base -and as ownership can be in a different place to where operations take place it makes sense to aim for a low tax jurisdiction.
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JC, your comments are not really correct re wealthy people moving to Guernsey.
1. Unless you live in an open market house, then rich people moving to Guernsey to “dodge” tax isn’t going to affect you.
2. It’s quite hard to “dodge” income tax if you only live in your home residence for 5 days a year. Unless you have a huge number of houses, you are going to be somewhere other than Guernsey for a fairly substantial amount of time, and thus will pay tax in this place.
I would be most suprised if there was more than a handful of open market houses that were empty for 360 days a year.
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We certainly don’t want our CM to be seen cosying up to the Swiss ambassador.
Switzerland has had to be dragged kicking and screaming to the negotiating table. The Swiss authorities have resisted every attempt for decades to make their banking system more transparent and compliant with standards in other countries.
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Tom/Jerry
If that was indeed intended to be a joke then, I’m definately more of a Bugs Bunny person.
Steven
Oh deary me, please try to read the post again, I said “christian aid”, where there is whole section of one of their reports about the evils of tax “havens”. And a whole crew on here who preach it.
I never at any point implicated all Christians.
Maybe if you werent so quick to take the wrong end of the stick and be offended…..
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Sounds like a big swindle to me CD,
If they pay the taxes as per Guernsey;
do you mean they also PAY TAXES IN THE UK
For that is how you try to illustrate this affair.
I cannot for 1 moment believe that a company that has its working capability in UK.
Decides to have it’s financial affair in Guernsey, to me it borders on the argument of TAX-HAVEN
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…and if we buddy up with Swiss, my imaginary friend Trotsky said we’ll all get free chocolate…
hey! Imagine what other treats we’d get if we teamed up with all the other offshores…
let’s do it! Let’s have an offshore cartel and all live happily ever after!
…oh darn, Matron’s found me….
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Tom/Jerry – I suggest that you look into how tax systems work before commenting further.
If a company is operated in the UK it is liable to UK income tax. End of story. They cannot simply avoid UK tax by being set up here.
The companies that are set up here in order to not be caught by the tax systems of another jurisdiction need to be operated in Guernsey – otherwise the other jurisdictions would claim their share of tax.
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well TL,
I read CD note and it seems as if what I mentioned is fact.
They run a business elsewhere, and operate
from Guernsey, that bis what I wanted to know about:
You are certainly a good sprinter you also jump, for of all the notes you saw, you jumped as you sprinted unto little old us.
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TL, is it not possible for a company operating in some other jurisdiction pay a sum to a Guernsey registered subsidiary for ‘administrative services’? With the net result of a large proportion of what would have been profit for the operating arm becoming a large profit for the Guernsey administrative arm.
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Tom/Jerry – if they run a business in a jurisidiction outside Guernsey and operate in Guernsey then they will pay tax in that other jurisdiction and also in Guernsey. Why is that a swindle and why does that suggest that Guernsey is a tax haven? That is the part of your post that I was taking issue with.
Steven – the tax systems of the other jurisdiction should pick that up if the payments are not representative of the services provided. Excessive payments to connected parties are usually not tax-deductible. That is down to the tax system of the other jurisdiction and is within their power to control, so it hardly makes us a tax haven.
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Scarlett
Wouldn’t it be ironic (don’t ya think!) if we joined forces with the swiss….. then maybe we too could take deposits from those who profited from WW2…. REMEMBER THE OCCUPATION ANYONE ?
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simon
No!
When was that then?
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Paul
Lets just say it was sometime ago……and at the time the swiss banks were very busy elswhere in Europe!
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simon
Not good enough. Can you please give a detailed description?
With hard facts if you don’t mind.
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Paul
Im sure this site would not put in print the details of which I speak hence my sufficiently vague prose.
Details of the activitities of swiss banks during the time of the occupation are well documented.
Some, maybe yourself included, wish to deny these facts or regard them to be so long ago that they dont matter. I am not one of these people.
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Before you guys carry on taking cheap shots at the Swiss and their war record just reflect on who it was who rescued thousands of islanders from starvation towards the end of the Occupation. And remember it even more on this day in particular. Pathetic the lot of you.
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simon
They would put it into print. So the floor is yours!
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Ah, yes indeed, irony, Simon… it’s definitely not just an implement for getting the creases out of Matrons starchy whites with…
Oops! Here she comes, mad as hell as she’s just been told she can only have an additional 20 administrative staff to help with organising the Christmas party this year…
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Scarlett
Tell matron not to worry we can build another accomodation block to help staff the administration of the christmas party, but promise not a word to HA ok!
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Paul
I recomend “The Swiss the Gold and the Dead” as your first reading on the subject. Maybe this will help you pluck your head out of the dark!
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