POSTPONED: BIBA Seminar – What Businesses Need to Know about BEPS and DTAs
Kindly be advised that the BIBA Seminar “What Businesses Need to Know about BEPS and DTAs” scheduled for today, August 18th, 2017 at the Savannah Beach Hotel, Hastings, Christ Church, has been postponed. The island has not been given the ALL CLEAR from Tropical Storm Harvey. A new date will be announced in due course. BIBA apologises for any inconvenience this may have caused.
Foreign Currency Crunch Could Drive T&T Car Dealers out of Business
Trinidad and Tobago’s foreign currency crunch is threatening to drive some used car dealers out of business. According to President of the T&T Automotive Dealers Association, Visham Babwah, operators have been forced to put the brakes on new car purchases because they are not getting enough of the foreign exchange they need. “The situation for the industry is grim. We are only receiving between 10 per cent and 15 per cent of the amount that we need for our businesses to be sustained,” Babwah told the Trinidad Guardian newspaper. He disclosed that while banks have allowed dealers to use their credit cards to make a purchase, they are being hindered by the low credit limit. “The bank told us we could use our credit cards, which have very small limits, which is around US$10,000. In the scheme of purchasing cars for someone’s business, that is very small,” he said. “For example, one car could cost US$20,000.” Babwah made a case for the car dealers to receive a better deal from the banks, pointing out that some wealthy individuals have credit cards with much larger limits to make their foreign purchases. “They have enough credit and they would utilize the amount of US dollars in one swipe that I would use in a year for my business,” he claimed. Babwah warned the current situation is unsustainable and he stressed that small and medium sized enterprises urgently needed help to keep their businesses going. In response, the Bankers Association of Trinidad and Tobago (BATT) explained that foreign exchange inflows into the country have declined significantly and commercial banks have been asked to put trade and manufacturing customers first. It however assured that commercial banks are working to manage customer expectations through a “very difficult market reality” where no industry, group or individual may be able to receive all the US dollars that they require. In the meantime, the Automotive Dealers Association has called for a meeting with Finance Minister Colm Imbert. Article compliments Caribbean 360.com
Netherlands and UK are biggest channels for corporate tax avoidance
Almost 40% of corporate investments channelled away from authorities and into tax havens travel through the UK or the Netherlands, according to a study of the ownership structures of 98m firms. The two EU states are way ahead of the rest of the world in terms of being a preferred option for corporations who want to exploit tax havens to protect their investments. The Netherlands was a conduit for 23% of corporate investments that ended in a tax haven, a team of researchers at the University of Amsterdam concluded. The UK accounted for 14%, ahead of Switzerland (6%), Singapore (2%) and Ireland (1%). Every year multinationals avoid paying £38bn-£158bn in taxes in the EU using tax havens. In the US, tax evasion by multinational corporations via offshore jurisdictions is estimated to be at least $130bn (£99bn) a year. The researchers reported that there were 24 so-called “sink” offshore financial centres where foreign capital was ultimately stored, safe from the tax authorities. Of those, 18 are said to have a current or past dependence to the UK, such as the Cayman Islands, Bermuda, the British Virgin Islands and Jersey. The tax havens used correlated heavily to which conduit country was chosen by the multinational’s accountants. The UK is a major conduit for investments going to European countries and former members of the British Empire, such as Hong Kong, Jersey, Guernsey or Bermuda, reflecting the historical links and tax treaties enjoyed by firms setting up in Britain. The Netherlands is a principal conduit for investment ending in Cyprus and Bermuda, among others. Switzerland is used as a conduit to Jersey. Ireland is the route for Japanese and American companies to Luxembourg. In terms of the purpose, on paper, of the corporate structures, the Netherlands specialises in providing holding companies. The UK provides head offices and fund management and Ireland offers financial leasing and the provision of head offices. “Our results show that offshore finance is not the exclusive business of exotic small islands far away,” the researchers write in an article for the academic journal Scientific Reports. “Countries such as the Netherlands and the United Kingdom play a crucial yet previously hidden role as conduits of offshore finance on its way to tax havens.” Dr Eelke Heemskerk, who led the research, said that the work showed the importance of developed countries cleaning up their financial sectors. He said: “In the context of Brexit, where you have the UK threatening, unless they get a deal, to change their model to be attractive to companies who want to protect themselves from taxes, well, they are already doing it. “The Netherlands says they won’t let the UK be an offshore tax haven. That’s because they don’t want them taking their business.” Article compliments The Guardian.