Alleged tax havens like the British-tied Isle of Man and Jersey have struck back at accusations that they allow tax evasion and avoidance, ahead of imminent G8 talks on the topic.
The offshore British dependencies charge that G8 leaders are playing politics and ignore the opacity of tax rules in their own countries,BBC reports.
“Politicians love scapegoats,” Isle of Man Chief Minister Allan Bell told BBC. He added that the Isle of Man is a decade ahead of the UK and the U.S., among other large nations, in tracing the ownership of secretive bank accounts.
“It’s totally selfish from the USA, because they want to track down their own tax evaders overseas without looking at Delaware,” Bell said.
Delaware is the state of choice for incorporation for many U.S. businesses, because state tax loopholes and friendly state bureaucrats make it quick and painless to start up and be taxed there, the New York Times reports.
Nearly half of all public corporations are incorporated in Delware, which boasts more registered companies than people, at about 945,000 businesses to almost 898,000 people.
The island of Jersey also rejected claims that its government is soft on tax issues, according to BBC. “We expect our taxpayers to comply with all tax codes just as much as the UK does,” Jersey Treasury Minister Philip Ozouf said.
The two islands are resisting calls for increased automatic sharing of tax data, arguing that sharing such data with developing countries could make their clients’ data vulnerable to theft or breaches from competitors or criminals.
Companies do not generally pay tax in Jersey, according to its government website, with individual income taxes standing at 20 percent. There are no ‘wealth’ taxes, like taxes on capital gains or inheritance.
“For high-net-worth individuals, there is a preferential tax rate available,” the government website states.
The IRS maintains a partial list of offshore tax evasion cases, which have been linked especially to clients of Swiss banking giant UBS (NYSE:UBS). UBS is facing investigation in France for facilitating tax evasion.
Nat Rudarakanchana covers commodities and companies for the International Business Times. He is especially interested in precious metals, the food and drink industry, and...