UK water companies are NOT using CISX to avoid tax
Tuesday 19th February 2013, 8:30AM GMT.
THE States has defended the Channel Islands Stock Exchange over claims it is being used by UK water companies to avoid paying millions of pounds in tax.
The exchange also insisted there was no wrongdoing and the so-called tax avoidance scheme could be undertaken through any recognised stock exchange, including London’s.
It follows UK media reports of an investigation by lobby group Corporate Watch allegedly showing that six water firms had used the CISX to avoid paying interest on big loans.
They claim that the firms had issued loans through the stock exchange as something called Quoted Eurobonds and did not have to pay interest on loans due to a loophole.
But Commerce and Employment minister Kevin Stewart, pictured, yesterday defended the use of Quoted Eurobonds and the CISX.
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This could get us in hot water
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I can feel our credibility dripping away..
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Time to throw in the towel
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Hardly worth splashing this over the front page.
If a water company is syphoning of UK taxes they should fawcet to pay them back.
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Why is the island used for deposits rather than the UK , simples really,, to avoid paying UK tax.
Our politicians keep on denying it, and bury their heads in the sand.
The sooner we wise up and sort this out the then the UK will be off our backs.
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If you knew anything about UK tax, you would know that this is not the case.
You cannot simply avoid UK tax by depositing it elsewhere. UK taxpayers are taxed on their worldwide income.
And anyway, this article has nothing to do with bank deposits, it concerns loan instruments issued by a UK company and listed on a stock exchange which just happens to be in the Channel Islands. None of the loaned money would have come here. They would have chosen the CISX as it is a relatively simple stock exchange on which to list instruments, and therefore cheaper than doing it in London.
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Terry
You obviously know far more about these things than I do.
What I will say is that although we continually deny being a Tax Haven, we are known as that in the UK, and if you search online, also throughout the world.
If in fact we are not a Tax Haven we do have a big problem with our image.
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You are right that we are frequently labelled as a tax haven, but usually by people who have an axe to grind or who are too lazy to understand the nuances.
There is no set definition of what a tax haven is. Is it just a low tax jurisdiction? Or does it suggest some sort of underhand behaviour that is designed to undermine the legitimate tax requirements of other countries? We are the former, but we are not the latter.
It is hard enough to get UK journalists or bloggers to understand the position. But we should at least avoid shooting ourselves in the foot by perpetuating the inaccurate perceptions about our own island.
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No, what we have a problem with is people like you perpetuating the myth.
I’ve said it before, just because lots of people state something on the web, it doesn’t make it true ….
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What is also a problem is “professionals” continually denying that the majority of business carried out in the Channel Islands assists individuals and companies to minimise the tax they pay in their domiciled countries. Just saying we are a low tax regime whilst constructing tax to specifically attract such activity, zero/10, is what winds the rest of the world up! Couple that with putting the burden of tax income almost entirely here on individuals who live here then by any sensible definition we are a tax haven for the world. Having an ex DJ telling the rest of the world we are not only increases the doubt that others have for our island. Lets start being honest with ourselves and then we can protect our finance industry, because at the moment there are certainly better places in the world to place your business.
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Paul, every jurisdiction tries to attract business or certain people to its shores.
For example, the UK has a very favourable tax regime for non-domiciled tax residents – i.e. overseas persons who come and live in the UK. For an annual fee of around £35k (IIRC), they will only be taxed on their UK earnings – meaning that all of their earnings elsewhere, including in their country fo origin, will be tax free. This is not available to UK domiciled persons, who are taxed on their worldwide income if they are UK tax resident. This attracts many European and Russian business moguls to the UK.
And yet, the finger is pointed at us. The real issue is that we are convenient bogeyman whilst the UK and other countries suffer various financial woes.
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