OECD Tax Treaty Compliance Failing
Executive Summary – We now have two nations that we know of that have failed to execute OECD tax treaties according to their model agreement. Panama and Austria. We are of the opinion that if this number can get up to four or five tax havens a full rebellion may take place and these OECD tax treaties will fail. We are not there yet but are watching optimistically. Background – The OECD (Organization for Economic Cooperation and Development) is driven by high tax countries in need of greater revenue to feed their unprecedented spending programs. Having already bled their populations dry they are trying to find new ways of getting revenue. Eventually anyone with a sub normal IQ will realize that these high tax systems will fail and breakdown. You simply can’t keep increasing spending and taxes. The USA did an admirable job of hoodwinking the world by convincing the world to use its worthless currency as a reserve currency. Those days are rapidly drawing to an end as nations begin to create new asset backed currencies to get away from the USD. The Euro is not really better. Throughout history without fail ALL fiat monetary systems fall apart and the currency becomes worthless. There has never been a single exception to this rule the only variable is the time it takes. Fiat money enables the shortsighted greedy politicians to continue their reign of spending to get votes. They would rather destroy their country economically than do the right thing and pay the price to fix the economy of their nation. They would rather hold office another few years while destroying their respective nations, than risk not being elected in favor of another politician willing to continue the destructive reign of spending for votes. Survival of the unfittest politicians. So here we are with nothing but fiat currencies in the world and economies failing. Corrupt politicians trying to fix the depressions by more spending which is like trying to put out a fire by pouring gasoline on it. Guess they have to come up with some sort of a story to make it look like they are trying. In any event the OECD has been compelling nations to agree to their tax treaties thus enabling the high tax countries to wipe out any remaining assets their constituents have been secreting away in offshore tax havens. This would expose these assets to past due taxes, penalties, interest and of course inheritance taxation. It also serves to set aside privacy, which is an important component of any police state. Austria – Austria, a known tax haven, started to sign the OECD Agreement for sharing of tax information and their parliament failed to ratify it. This sort of constitutional modification required a 2/3 vote, which it failed to get. It is expected that there will be another vote but that does not mean 100% that there will be another vote and it does not mean that it will pass. Austria will now (pre-treaty) share tax information if it is requested inside of a criminal case, think criminal tax fraud, criminal tax evasion, money laundering, fraud, conspiracy to commit fraud and the other usual shopping list of offenses commonly used or fabricated when a high tax country is after someone and smells money. We prefer to use Guatemala for banking and corporations, which will not share tax information even if it is a criminal tax case. We are watching closely to see how this progresses.
Panama – They have a new president. He says he will refuse to agree to the OECD tax information sharing agreement model treaty. OK. Then he threatened the OECD countries to not put Panama on a blacklist and sanction it saying his nation would retaliate if they did do so. Is this just saber rattling or real? We will see. Now Canada is dragging its feet on signing a free trade agreement with Panama due to this tax issue. The USA is also failing to sign such an agreement and the tax issue has been brought up more than once on this too. We are watching this closely. OECD Blacklisting – Pay close attention. If a country winds up on the blacklist it can be very bad for anyone banking there. Sending and receiving wires can be slow or worse. The countries where the correspondent banks are located are in the high tax nations and pressure can be put on the correspondent banks to investigate wires coming to or from these blacklisted countries. Such investigations can take how long we do not know? Could be days or weeks. The correspondent banks may get tired of the scrutiny and drop the banks in the blacklisted countries. They may also be told to drop the banks in the blacklisted countries by their respective governments and the banks are in no position to refuse. Loans from other countries will be harder to get for those in a blacklisted country, maybe even impossible. The IMF can be brought to bear pressure. International free trade agreements could become something on the table for cancellation or suspension. Visa, American Express, Discover and MasterCard are basically USA companies and they can be made to put pressure on banks in blacklisted countries. How? Not sure need to watch and see if this is a tactic to be used or not. Bottom line is you may find yourself unable to remove funds from blacklisted country banks. Then what do you do? In any event at this point the OECD will be meeting in September and sanctions should be a big topic. When dealing with high tax countries in need of money it is wise to expect the worst. Widespread Rebellion Against OECD Tax Treaties – Maybe there will be a number of nations saying no to the OECD tax treaties? If the blacklist is too big well then it doesn’t work anymore. The nations that have been complying so far during 2009 have been mostly countries that in one way or another are tied to the UK. For a list of these treaties chronologically go to the OECD web page listing them here: Tax Information Exchange Agreements (TIEAS) I have never seen any mainstream media reference this web page and I find this curious? What to do Practically Speaking – Well your options are always going to be there. We think the known offshore tax havens are the low hanging fruit that the high tax countries are going after first and foremost. Their threats of blacklisting and actual blacklisting may create capital flight out of the banks in the tax haven nations since most of their depositors are those affected by the OECD treaties. We are stressing the use of countries with the same or better bank secrecy that are not commonly referred to as tax havens. There is thus little pressure on these nations to comply with the OECD now since it is all about money. The non-tax haven nations are not considered low hanging fruit. Most of the clients of their banks are locals not affected by these OECD treaties.
The first tax havens to get slammed was Switzerland, Lichtenstein, Luxembourg, Jersey, Guernsey, Isle of Mann, Cayman Islands and some other Caribbean offshore tax haven jurisdictions. These were high profile offshore tax havens. Now they have Panama in their sights, another high profile offshore tax haven. If you are banking in an offshore tax haven country and the OECD efforts fail with a number of nations refusing to sign these treaties then you win. If not so many nations fail to sign and then the blacklist gets going harshly, you may not be able to get your money out and the offshore banks in these havens may start to fail and go into liquidation. The OECD would not exactly be broken hearted if such things happened. So we suggest shifting to bank secrecy nations that are not thought of as tax havens that have not signed these OECD treaties. This is your safest position from which to watch the progression of the OECD attack. We have several nations that we can use. You can get a personal account (least secure method), a corporate account using an anonymous corporation where you sign on the bank account, which is covered by banking secrecy. This provides reasonable protection. The nations we use do not tax offshore-derived income. The third method is International Trust Agreement banking where the law firm signs on the bank account for you. This provides extreme protection. With trust agreement banking the bank has no ID on you and could never reveal your identity. You have a general power of attorney for the corporation; you also have the corporation share certificates and a secret International Trust Agreement with the law firm to protect you and also to allow for beneficiaries. You also do get the online banking access codes. To learn more about your options go here: International Trust Agreement Banking Questions Welcome – These are trying times to put it mildly and feel free to contact us to discuss the issues and different privacy solutions.