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Canadian documentary warns tax havens threaten democracy
Friday March 13th 2015A new Canadian documentary warns that the practices multinationals use to avoid billions in taxes worldwide threaten the foundations of democracy, and its makers hope its release here on Friday sparks a public debate over offshore tax havens similar to those already raging in austerity-weary Europe.
The Price We Pay, by director Harold Crooks – a co-writer of the acclaimed 2003 film The Corporation, which accused modern capitalism of forcing companies to act like psychopaths – officially opens Friday in Toronto and Montreal, after its debut at last year’s Toronto International Film Festival.
“To me, ultimately, what the film is about is the threat that the offshoring of the world’s wealth represents to the major social innovations of the 20th century, the middle class and the social welfare state,” Mr. Crooks said in an interview with The Globe and Mail.
While the issue has received more attention in Quebec, it has not caught fire nationally in Canada the way it has in Europe, where U.S. companies such as Amazon and Starbucks have faced a furor over tax techniques that shift billions in profit out of higher-tax countries. The president of the European Commission has also become entangled in a controversy over tax deals made with major companies while he was prime minister of Luxembourg. It’s a debate that is inflamed as cash-strapped governments there cut budgets.
The documentary comes as the Group of 20 large economies and the Organization for Economic Co-operation and Development (OECD) pursue an aggressive plan to rewrite international tax rules to close loopholes that allow multinational corporations to legally shift profits into tax havens such as Bermuda or the Cayman Islands, an initiative led by OECD tax chief Pascal Saint-Amans, who also appears in the film.
It also features an interview with French economist Thomas Piketty, whose bestseller Capital in the Twenty-First Century created a sensation and called for global wealth tax.
The documentary has already opened in France, where it is in 50 theatres and where finance minister Michel Sapin, treated to a private screening, lauded the film as “excellent” on national television last month and called the tax practices it highlights “absolutely scandalous.”
The film makes ample use of footage of the dramatic grillings that executives from Amazon, Apple and other companies have faced from committees of legislators in Britain and the United States in recent years over the companies’ moves – all legal – to minimize tax bills and shift billions to low- or no-tax countries.
In outlining the history of the rise of offshore money, the film labels the square mile City of London, home to the British capital’s historically loosely regulated financial services industry, as the “mother of all tax havens.”
But it blames the rise of the modern world’s offshore financial centres in British colonies or dependencies in the Caribbean, such as the Cayman Islands, partly on moves made in the 1960s by Canadian banks. For example, Donald Fleming, a federal minister of finance under Prime Minister John Diefenbaker who went on to serve as chairman of the Bank of Nova Scotia, helped the Bahamas draft its attractive tax laws in the 1960s, the film says.
The movie was inspired by a 2010 book called La Crise fiscale qui vient (The Coming Fiscal Crisis), by Quebec tax policy adviser, accountant and anti-tax-avoidance crusader Brigitte Alepin, who appears in the film and co-wrote it with Mr. Crooks, whom she drafted as its director. She also interviewed many of the film’s francophone subjects.
She said she hopes the film will convince policy-makers in Canada and elsewhere to take action. But she argues that even if the OECD’s proposed tax-avoidance crackdown is implemented around the world, it will still result in limited progress as long as countries are still free to compete with each other to lower their tax rates: “Even if you solve all the problems with tax havens … even if all this stops in a magical way in a few years, it will not stop tax competition between countries.”
Source: Globe and Mail
Headline, Industry News
Canadian documentary warns tax havens threaten democracy
Friday March 13th 2015A new Canadian documentary warns that the practices multinationals use to avoid billions in taxes worldwide threaten the foundations of democracy, and its makers hope its release here on Friday sparks a public debate over offshore tax havens similar to those already raging in austerity-weary Europe.
The Price We Pay, by director Harold Crooks – a co-writer of the acclaimed 2003 film The Corporation, which accused modern capitalism of forcing companies to act like psychopaths – officially opens Friday in Toronto and Montreal, after its debut at last year’s Toronto International Film Festival.
“To me, ultimately, what the film is about is the threat that the offshoring of the world’s wealth represents to the major social innovations of the 20th century, the middle class and the social welfare state,” Mr. Crooks said in an interview with The Globe and Mail.
While the issue has received more attention in Quebec, it has not caught fire nationally in Canada the way it has in Europe, where U.S. companies such as Amazon and Starbucks have faced a furor over tax techniques that shift billions in profit out of higher-tax countries. The president of the European Commission has also become entangled in a controversy over tax deals made with major companies while he was prime minister of Luxembourg. It’s a debate that is inflamed as cash-strapped governments there cut budgets.
The documentary comes as the Group of 20 large economies and the Organization for Economic Co-operation and Development (OECD) pursue an aggressive plan to rewrite international tax rules to close loopholes that allow multinational corporations to legally shift profits into tax havens such as Bermuda or the Cayman Islands, an initiative led by OECD tax chief Pascal Saint-Amans, who also appears in the film.
It also features an interview with French economist Thomas Piketty, whose bestseller Capital in the Twenty-First Century created a sensation and called for global wealth tax.
The documentary has already opened in France, where it is in 50 theatres and where finance minister Michel Sapin, treated to a private screening, lauded the film as “excellent” on national television last month and called the tax practices it highlights “absolutely scandalous.”
The film makes ample use of footage of the dramatic grillings that executives from Amazon, Apple and other companies have faced from committees of legislators in Britain and the United States in recent years over the companies’ moves – all legal – to minimize tax bills and shift billions to low- or no-tax countries.
In outlining the history of the rise of offshore money, the film labels the square mile City of London, home to the British capital’s historically loosely regulated financial services industry, as the “mother of all tax havens.”
But it blames the rise of the modern world’s offshore financial centres in British colonies or dependencies in the Caribbean, such as the Cayman Islands, partly on moves made in the 1960s by Canadian banks. For example, Donald Fleming, a federal minister of finance under Prime Minister John Diefenbaker who went on to serve as chairman of the Bank of Nova Scotia, helped the Bahamas draft its attractive tax laws in the 1960s, the film says.
The movie was inspired by a 2010 book called La Crise fiscale qui vient (The Coming Fiscal Crisis), by Quebec tax policy adviser, accountant and anti-tax-avoidance crusader Brigitte Alepin, who appears in the film and co-wrote it with Mr. Crooks, whom she drafted as its director. She also interviewed many of the film’s francophone subjects.
She said she hopes the film will convince policy-makers in Canada and elsewhere to take action. But she argues that even if the OECD’s proposed tax-avoidance crackdown is implemented around the world, it will still result in limited progress as long as countries are still free to compete with each other to lower their tax rates: “Even if you solve all the problems with tax havens … even if all this stops in a magical way in a few years, it will not stop tax competition between countries.”
Source: Globe and Mail
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Headline, Industry News
Canadian documentary warns tax havens threaten democracy
Friday March 13th 2015A new Canadian documentary warns that the practices multinationals use to avoid billions in taxes worldwide threaten the foundations of democracy, and its makers hope its release here on Friday sparks a public debate over offshore tax havens similar to those already raging in austerity-weary Europe.
The Price We Pay, by director Harold Crooks – a co-writer of the acclaimed 2003 film The Corporation, which accused modern capitalism of forcing companies to act like psychopaths – officially opens Friday in Toronto and Montreal, after its debut at last year’s Toronto International Film Festival.
“To me, ultimately, what the film is about is the threat that the offshoring of the world’s wealth represents to the major social innovations of the 20th century, the middle class and the social welfare state,” Mr. Crooks said in an interview with The Globe and Mail.
While the issue has received more attention in Quebec, it has not caught fire nationally in Canada the way it has in Europe, where U.S. companies such as Amazon and Starbucks have faced a furor over tax techniques that shift billions in profit out of higher-tax countries. The president of the European Commission has also become entangled in a controversy over tax deals made with major companies while he was prime minister of Luxembourg. It’s a debate that is inflamed as cash-strapped governments there cut budgets.
The documentary comes as the Group of 20 large economies and the Organization for Economic Co-operation and Development (OECD) pursue an aggressive plan to rewrite international tax rules to close loopholes that allow multinational corporations to legally shift profits into tax havens such as Bermuda or the Cayman Islands, an initiative led by OECD tax chief Pascal Saint-Amans, who also appears in the film.
It also features an interview with French economist Thomas Piketty, whose bestseller Capital in the Twenty-First Century created a sensation and called for global wealth tax.
The documentary has already opened in France, where it is in 50 theatres and where finance minister Michel Sapin, treated to a private screening, lauded the film as “excellent” on national television last month and called the tax practices it highlights “absolutely scandalous.”
The film makes ample use of footage of the dramatic grillings that executives from Amazon, Apple and other companies have faced from committees of legislators in Britain and the United States in recent years over the companies’ moves – all legal – to minimize tax bills and shift billions to low- or no-tax countries.
In outlining the history of the rise of offshore money, the film labels the square mile City of London, home to the British capital’s historically loosely regulated financial services industry, as the “mother of all tax havens.”
But it blames the rise of the modern world’s offshore financial centres in British colonies or dependencies in the Caribbean, such as the Cayman Islands, partly on moves made in the 1960s by Canadian banks. For example, Donald Fleming, a federal minister of finance under Prime Minister John Diefenbaker who went on to serve as chairman of the Bank of Nova Scotia, helped the Bahamas draft its attractive tax laws in the 1960s, the film says.
The movie was inspired by a 2010 book called La Crise fiscale qui vient (The Coming Fiscal Crisis), by Quebec tax policy adviser, accountant and anti-tax-avoidance crusader Brigitte Alepin, who appears in the film and co-wrote it with Mr. Crooks, whom she drafted as its director. She also interviewed many of the film’s francophone subjects.
She said she hopes the film will convince policy-makers in Canada and elsewhere to take action. But she argues that even if the OECD’s proposed tax-avoidance crackdown is implemented around the world, it will still result in limited progress as long as countries are still free to compete with each other to lower their tax rates: “Even if you solve all the problems with tax havens … even if all this stops in a magical way in a few years, it will not stop tax competition between countries.”
Source: Globe and Mail
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