Category Archives: From Live Blog

Information gleaned from a controversial Internal Revenue Service regulation that would require U.S. banks to report interest on deposits held by nonresident aliens could lay the groundwork for reciprocation as the United States continues its efforts to build cooperation with other countries to stop global tax evasion, IRS Commissioner Douglas Shulman told a House subcommittee March 21.

“This regulation lays the groundwork for some reciprocation” Shulman said at a hearing on IRS's fiscal year 2013 budget request before the House Appropriations Subcommittee on Financial Services and General Government.  

Shulman mentioned reciprocation in that context, but said such reciprocation would only occur with countries with which the United States already has tax treaties.

The commissioner stressed that the main goal of the nonresident alien bank deposit interest regulation is to collect the information. “We don't have the intention of endangering taxpayers.

Shulman said he worries that federal budget cuts could start to erode tax enforcement and voluntary compliance.

Almost 1,200 people were prosecuted and convicted for tax and superannuation offences in Australia last year, new figures show.

The statistics were released by Tax Commissioner Michael D'Ascenzo, who said that: “The ATO's use of sophisticated data matching technology is helping to close the net around those exploiting the tax and super systems.”

In total, 48 people were prosecuted and convicted of serious tax crime offences, with sentences ranging from three months to nine years and 11 months. Six of these convictions occurred under Project Wickenby, a cross-agency task force established in 2006 to prevent the promotion of or participation in illegal offshore structures.

From its launch to January 31, 2012, Project Wickenby has resulted in AUD1.26bn (USD1.32bn) in tax liabilities raised, and AUD597.14m in tax collected. 65 people have been charged under the project with serious offences, with 22 people convicted.

1,149 people and 370 companies were prosecuted and convicted for other tax offences in 2011. Such offences included failing to lodge a tax return, providing false and misleading information, or receiving a fee for preparing an income tax return when not being a registered tax agent.
As part of its Compliance Program the ATO is also increasing its focus on non-complying taxpayers in the goods and services tax (GST) system. Last year’s budget provided AUD337m in funding for this project over the next four years. The emphasis is on identifying people who do not lodge their business activity statements, and detecting businesses that over-claim entitlements or deliberately under-report taxable supplies that they make. In 2011, the ATO prosecuted 545 individuals and 211 companies for over AUD12.55m worth of GST offences.

Also increased is the ATO’s scrutiny of businesses deliberately not reporting cash income. Over 1.9m small businesses were evaluated against the ATO's risk detection systems during 2011. Last year, the ATO prosecuted 41 individuals and nine companies for over AUD3.22m worth of cash economy offences.
Commenting on the figures, D'Ascenzo said:
“People deliberately committing tax evasion are often caught by the sharing of information between government departments and other third parties. Cooperation across government departments has led to increased intelligence sharing and improved information gathering which is driving our data matching capabilities to new levels."

"We use advanced technology to bring together information from a range of government departments and other third parties to cross check personal and business records such as car registrations and supply orders for businesses. The ATO also undertakes risk profiling to identify people and businesses that may have not declared all their earnings or overinflate their deductions."
"We can see how personal and business claims compare to other tax payers. If alarms are raised the ATO investigates those claims and taxpayer records more closely."

.

The British Virgin Islands office of leading international offshore law firm Ogier has noted that its involvement in a number of global transactions over recent months is reflective of the strong demand of late for BVI-based corporate structures.

Recent high-profile transactions involving BVI structures have included:

• Canadian-based financial institution Scotiabank’s USD1bn acquisition of a 51% stake in Colombia’s Banco Colpatria Red Multibanca Colpatria S.A., that country’s fifth largest financial group, representing Scotiabank’s largest ever-international takeover;
• UK private equity group CVC Capital Partners’ purchase of a 51% controlling stake in Virgin Active - the fitness chain part of Richard Branson’s Virgin Group, valued at GBP900m;
• Australian-listed diversified services company UGL Limited’s GBP77.5m acquisition of the trading operations of UK-listed property services company DTZ; and,
• NYSE-listed global agri-tech provider, Monsanto Company’s acquisition of Beeologics, a start-up that researches and develops biological tools for targeted pest and disease control.

“The array of blue-chip companies, geographies and industry sectors covered by these deals underscore Ogier BVI’s capabilities as a trusted advisor to international business on all types of corporate transactions,” said Ray Wearmouth, Managing Partner, Ogier BVI.

“Ogier’s involvement in these arrangements also represent the continued confidence of the global financial community in the BVI as a stable and high-quality jurisdiction for structuring multi-national transactions,” he added.