(May 26, 2015)
The above perfectly describes my weekend. For the first time in a year I took three days off. Went on long nice walks with my 4 year-old daughter in the forest, watched the wild Scottish Highlanders and gave the latest tax news some thoughts. Unfortunately I did not come up with satisfying answers to my own questions.
First there was the U.S. Department of the Treasury that published draft updates to the U.S. Model Income Tax Convention for public comments. According to the U.S. Department of the Treasury the draft updates are meant to limit the possibilities of BEPS and to articulate steps that would help prevent the U.S. treaty network from encouraging inversion transactions. OECD’s BEPS project has always been presented as a joint project of the G20 and the OECD. The last time I checked the U.S. was still a member of the G20, as well as of the OECD. With the OECD getting a tremendous load of work done, it makes one wonder why the U.S. does not wait for the outcomes of the BEPS project and decided to do its own thing. Is the U.S. trying to get a message across? Are the U.S. authorities trying to push OECD’s BEPS project in a certain direction? Or did they just loose interest in OECD’s BEPS project? Or was there something completely different on the mind of the U.S. officials when they decided to draft these draft updates?
Then I read that newspapers started report that Amazon has started to book its UK retails sales in the UK and supposingly is going to pay UK Corporation Tax over such sales. Supposingly Amazon is doing this to avoid the UK diverted profits tax. Once again food for thought. It is obviously nice for UK politicians that their budgets grow if Amazon indeed starts paying UK Corporation Tax. On the other hand one can question whether this is the way one should want countries to arrange their business. Instead of countries working together and agreeing on a fair allocation of profits, the UK has chosen to go solitary in making sure that it receives the taxes its politicians think it is entitled to. Still one can question whether it is a good thing if States are successful in bullying tax payers and by doing so get them to pay taxes in that State, and thereby depriving other States from the tax revenues those other States are entitled to.
And then last but not least there was the news that the Swiss authorities started publishing the names of foreigners and foreign firms wanted in tax probes by their countries of origin. Now in the UK they already had a name and shame-list. It looks like the Swiss have now started doing the same. Sure everybody has to pay its fair share of taxes, whatever that might be. And people frauding should be prosecuted. One can however question whether we as a society should cheer if the names of people wanted in a tax probe are being published online.
And that is why in a weekend that I promised myself not to work and to not even have a glance at the recently published Revised Discussion Draft on BEPS Action 6, I still spent some time thinking about the thing we all love: TAXES. Still I have to admit: it is much nicer thinking about taxes in an environment where one hears birds singing, sees one’s daughter enjoying nature, than it will ever be behind a computer.
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