Offshore activtities - tax haven rules ...

Offshore : Legal Tax Haven? ... like government-owned banks?
Banks exercise major parts of their business in offshore tax havens. Typically, there is only some type of administrator for a significant number of corporations. In the close- to- best case, there is some pseudo bank - some small secretarial service...

This text had been created late 2008 during the financial crisis. But this text is of general permanent interest. As far as details in this text might still refer to the crisis 2007...2011, this will be removed soon.

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The facts: Offshore banking...

Are such activities illegal tax avoidance schemes?

It is not intended to supply an answer here to this wide and complex question.

It has just been stated how it usually happens. This is sufficient for the next considerations here below.

The governments of various countries have become representatives of their nations, the new bank shareholders.

Evidently, these new shareholders have significant rights to require submission to the legal rules of the respective countries. Given the fact that this saves banks by using average taxpayers money, a minimal requirement should be that saved banks pay correctly all taxes due.

So far, in more than 5000 viewed press articles about the financial crisis, there was not a single statement that the legal status of owned offshore corporations for financial businesses of the saved banks would have been contested. There was not a single statement that prosecution for illegal tax avoidance would have been initiated.

Of special interest is the case of Germany. Mainly some major public banks (or banks mainly owned by public banks) were involved in very unhappy offshore schemes. Most supervisors and some managers of these banks are active politicians or retired politicians. Even unhappy businesses have to pay some types of taxes. So the question is if they did it, conforming to valid legal regulation.

Consequences for tax-avoiding private businesses

In case of problems:

Their lawyers will not hesitate to study in detail the apparent non-prosecution in case of governments holding shares in banks.

Especially in Germany, in case of detected tax fraud, lawyers will tend to be eager to analyse cases of equal behaviour within public banks. - In addition, it is the Federal Ministry of Finance, responsible for taxation, which coordinates in Germany the packages to save banks from bankruptcy.

Lawyers will check if offshore profits had been declared and taxed properly; or if otherwise investigation and prosecution took place.

They will check annual reports if such offshore activities are disclosed. This is typically the case. In this case, members of supervisory boards can not deny the obligation of having knowledge of the matter.

Lawyers will ask the offices of public prosecutors (or Attorney General or Staatsanwalt or Procureur de la République or however they are named in the specific country): If prosecution took place. If this was not the case and will continue to be not the case, lawyers will study if this non-prosecution is perhaps justified or not.

This can not totally settle problems of law violations by private tax evasion. But it will result in a better balanced view of the matter: It can hardly be expected from average cititzens to have more legal knowledge than the supervisors and executives of major public banks. If average citizens trusted in the legal character of action by public banks, published by the media, their tax evasion fault might be submitted to a lower penalty level.

There is no right for tax evasion.

This short text should not be interpreted as a suggestion to follow tax evasion concepts, if any.

It is only of interest as a legal defence argument in favor of justice.

These legal arguments might remain valid until approximately 2020. (The crisis effects will last at least until 2015; prosecution rights last in most countries at least 5 years after the illegal action.)

Contact + consulting

... for you or your lawyers:

For all questions related to this, you might contact: ok @ fax7.com (or ok @ mrmio.com )

Please be aware, the first contact has always to define some remuneration. There is no free information supply or answering service.

This is not an offer to supply consulting for beginning tax limitation schemes. It is only an effort to enforce equal treatment among citizens, managers, politicians.