The hypocritical reality of the EU and Western Governments on Tax enforcement

No doubt most citizens of Europe have noticed a trend of late, whereby Governments in league with the European Union and other Western countries are focusing the Media attention and propaganda efforts on Tax Evasion and Tax Avoidance. The goal here seems to be on focusing a complicit mainstream media on stirring up hatred (thereby dividing an conquering) towards productive individuals and companies from legally or illegally avoiding taxes. This of course is a distraction to stimulate emotions on the topic and channel the sentiment towards paying Taxes. 

Of course at no point during such media exposure centered on Tax evasion does the mainstream media indicate within the same article of sentence the utter abuse of Taxpayers money that is occurring within the EU and across many countries in the western world. To name just a few, Illegal or immoral wars, bank bail-outs, corruption in Politics, scandalous expenses of Politicians, black operations and general abuse of public money come to mind.

For the Citizens of Europe, one of the most astonishing revelations is that concerning officials who work for the European Commission and the European Parliament, even the highest category of unelected people that earn a NET take-home pay of around 120,000 euro per year pay a maximum Tax of just 12%.

Now considering the Troika forced aggressive Tax increases and austerity measures on the poor people living in the Mediterranean Bail-Out countries, this information is effectively Tax Fraud on a pan-European scale. How can this be possibly fair?

How can the unelected people working for the EU Commissions and Parliament in Brussels that enforce high Taxes on everyone else explain this to the 16 million unemployed people within the Euro-zone? What possible reason is given for such huge Tax breaks and Pension benefits on a scale not seen anywhere else in the world, while the rest of the average citizens pay more h=than their fair share?

A History of more than 4000 years of Taxes, when will we ever learn!

Once upon a time

In the early days of so called Human Civilization the Tax base succummbed to an extortionately high intolerable level, which in fact was in the 100% Tax bracket. Not surprisingly the people dominated by it were called “Slaves”. The people that the Slaves worked for were the original founding Tax collectors who comprised of various types of Nobles. The Nobles acted on behalf of and reported to the Kings that maintained a dedicated bloodline to keep the wealth and control of people in the family.

Alexander the Great
Then one day seemingly out of the blue to many at the time, came “Alexander the Great”, leader of the mighty Macedon Army. “Low Tax Alex” as he was aptly known by many during this period in world history, proudly announced wide ranging Tax cuts for everybody that supported him without a the need to fight for the territory he desired to control. In reality this meant the following:- No more...

• Sales Taxes
• Property taxes
• Value-added taxes
• Priority Taxes
• Stealth Taxes

Revenue enhancements (this category was in the past created out of nowhere or anywhere in times of austerity or domination to make money for the ruling class).

Alexander the Great made a brilliantly simple offer to the world at large: Pay my army 10% and keep the rest. Then he promised to destroy all of the Tax collectors. The Army of Macedon marched into the Tax Service Centers of Persia, Asia Minor, Egypt and the rest of the known world sacking and burning them. Cities everywhere built elaborate monuments in honor of Alexander the Great, before his army even arrived. Literally everywhere in the civilised world desperately pleaded "Please, conquer us, too".

During the reign of Alexander the Great the world over enjoyed explosive economic growth, creativity increased and notable cultural advances were also made. Then one sad day alas, Alexander passed away.

The Greeks
The Greeks then took over and initially showed promise in terms of mythology, language, democracy, astronomy, medicine, the arts and philosophy. However, during the following few hundred years, a series of progressive rulers slowly raised taxes and cooked the people of the time like Frogs in boiling water with an array of complex Taxes. As a result the Greek Empire inevitably collapsed. For Greeks today this sounds like Deja Vu.

The Romans
The Romans subsequently took over, with the promise to lower taxes to anyone that surrendered without a fight. Everybody naturally joined and why not? This is of course except for a few socialists at the time in Israel whom they duly crucified (thats another story).

The Romans bravely decreed that the world would be Taxed at an extremely low rate. Moreover, all Italians at home would pay absolutely no Taxes at all. Not surprisingly. the Roman Empire advanced throughout the civilized world, bringing prosperity, law, and culture.

Rome itself evolved into one of the most advanced, cultured and swinging fun cities the world has ever known. The Romans even set up offshore Tax havens such as Delos and a few other places.

A few centuries passed and sadly new generations of Roman rulers unable to see the bigger picture shut down the offshore centers, raised taxes and this wonderful
empire duly collapsed.

The Vandals
Europe was taken slowly taken over by a new set of Tax collectors. They were appropriately called Vandals. This mottly and savage bunch believed in 100% Tax followed by certain death for the Taxpayers. This of course did not support the Tax base and the world moved backwards.

Despite courageous Tax relief crusades by Attila the Hun and Ghengis Khan respectively, an era of high intolerable Taxes collected by feudal lords in addition to the Churches of Europe prevailed for centuries. It was called ”The Dark Ages”. Reason being, nobody could afford to turn on the lights!

The Arabs
During this period, the Arabs progressively took over most of Europe, except for areas around France and Germany. Under their benevolent despotism and low Taxes, people enjoyed great prosperity. Actually, the majority of Christians enjoyed being ruled by the Arabs who were at the time more efficient than the feudal lords.
The Arabs believed in free enterprise, freedom of expression and thought, tolerance and of course low Taxes. They did not force people to join their Mosque. Arab Taxes had 20% as the upper limit.

Then a few isolated trading communities not yet conquered by the Arabs such as Venice in Italy cut their Tax rates to fuel trade and commerce which duly exploded. Low taxes brought wealth and joy everywhere.

The Spanish & America’s
The Arabs were overruled on the prospect of lower Taxes. In order to deliver on promises, the new Spanish kings supported the voyages of Columbus and America was discovered. Sadly, 100% of Taxes were imposed on the native indians who were worked to death to send Gold and rishes to the Europeans back home.

Where there was no Gold, local European colonists had to work extremely hard. An American tax revolt ensued which threw out the British. It took 125 years to get Taxes back to where the British had them, but the Democrat Party was formed and they duly raised taxes.

Everybody who loved freedom headed west for the new Frontier. Tragically, by 1914 the frontier was closed and as there was nowhere else to hide, Congress passed their own version of American Income Taxes.

Back in Europe
Many productive people including Ernest Hemingway and Gertrude Stein, left for Paris. Then the French put up their Taxes to pay for the Maginot line, a group of dancers at the
Follies Bergere and other frivolous projects.

World War I
Tax rates shot up throughout the world. Everybody was feeling angry, so we had World War I. After the war, a reparations Tax of 100% was imposed on Germany. They could not possibly pay, so German industrial and mining areas were seized by the French.

This was not enough for the greedy French of the time who actually expected to be paid for the war damage. So the lifetime savings of all Germans were confiscated through an
inflation Tax. It was still not enough. Taxes went up all over and the world
depression followed. Germans owed several times what their properties were worth.
Foreclosures were rampant, unemployment was total, and anarchy threatened. The
Communists were the largest party in urban areas and hope for the future was gone.

World War II
Germany cried for "a saviour on a white horse". In rode Adlf Hitler. Hitler wanted to be the world's unique Tax collector. He (like many nasty conquerors before him) liked a 100% rate and anyone who was not ethnically German he wanted either dead or in slavery.

Some people did not agree, so they were sent to the gas chambers and paid 100% Tax along
the way. To avoid this fate, much of the rest of the world collaborated to oppose Hitler and then came World War II.

Germany and Japan
After the war, defeated Germany and Japan were force-fed the American Tax code with the high 1945 Tax rates. For 10 years, the defeated nations literally got nowhere. They produced only junk, poverty and unhappiness.

Then Germans negotiated to keep the existing Tax code, but asked for one little loophole: for all overtime pay to be Tax free. the Japanese did something similar by making all investment
profits, dividends and interest earned on savings Tax free. This encouraged wealth creation.

Suddenly, with the possibility of getting rich legally, the once disincentivized Germans and the copycat robot Japanese became innovative, creative and hard-working again. Their economies duly soared.

Red China
Meanwhile in the red Communistic world of China they were experiencing consecutive famines. The Tax rate on communes was cut by the Commies (who got something right for a change!) from 100% to nothing. Agricultural production exploded. Soon China was no longer starving, but they were exporting food. Then they started economic free zones where all the
Chinese who live there became millionaires while those under traditional communism still stagnated.

America
Meanwhile, in the USA, when the Kennedy Tax cuts went into force, the economy, and Tax revenues, grew so fast that America had its only balanced budget since World War II.

Then more negative Presidents like Johnson, Nixon, Ford and finally Carter meddled with Taxes and created a series of so called fiscally responsible Tax reforms (which is another way of saying Tax rises). Naturally, the American economy turned into a complete mess.

Ronald Reagan came in with a simple yet prosperous alternative and cut Taxes. The American economy expanded. New jobs were created faster than anywhere on Earth at this time. The only problem was that the Democrats in Congress kept spending money
(welfare) on marijuana-smoking degenerates faster than it could be collected.

Great Britain
Meanwhile the UK suffered from EC imposed socialism.The UK actually nearly became extinct when Tax rates were up in the 98% status. Margaret Thatcher saved the day, when she immediately slashed Tax rates, and eliminated the socialism that kept the country back. Every day in England until Thatcher left, the future looked brighter than it did before.

Except for the worst countries of the third world, tax rates were, were for a while, dropping around the earth. Communist countries, with nothing to lose but their chains, were cutting taxes
and worshipping at the altar of capitalism. But their mentality was so warped by
Communism that they still do not have it wuite right.

EU
Steadily the Tax rates have risen across the EU since inception and we are now moving into a period of depressing austerity and economic crisis. The European Common Market was a popular idea which is what most voters actually thought they were getting into. Now there are unelected commissions, the powers of each member country are diminishing and even if a country votes NO to further integration, the EU spends more of Tax-payers money on marketing to support a new YES campaign to turn around and then ignore the original NO vote. This happened to Holland and Ireland, but most countries did not even get a referendum.

Greece, Portugal, Spain, Italy and Cyprus are reaching the point of economic collapse. They will all need billions of euro more than what has already paid to bail soem of them out. The only answer from the EU is to apply more of the same austerity and Taxes, which of course will kill growth and bring each of these nations to eventual collapse if not the whole EU if countries follow this suicidal course, if history tell us anything.

Clearly the leaders across Europe have a profound lack of respect for History.

New World Order
What we are seeing now is a slow inexorable move towards the New World Order. Here an American Union, European Union, African Union and Asian Union will all ultimately report to the World Union for ultimate control of our Planet. You can guess what Tax rate will be applied if the new World Order ever happens!

Fortunately, there is an awakening going on across planet Earth which offers hope for the future.

Look Away or Pay the $5 fee Just for Looking!

Given the financial crisis that has influenced every aspect of our life the last 4-5 years, you have to be creative in order to be successful. Businesses have to go every possible way in order to stand tall and make profit. 

However, creativeness can be tricky, it can bring to success or to a big failure. 

You choose what the case is for Celiac Supplies, a gluten free shop in Brisbane, that posted an image of a sign on its front door getting quickly positive and negative attention as well.

The sign reads:
"Dear Customers,

As of the first of February, this store will be charging people a $5 fee per person for "just looking."
The $5 fee will be deducted when goods are purchased.

That's because there has been high volume of people who use this store as a reference and then purchase goods elsewhere. These people are unaware our prices are almost the same as the other stores plus we have products simply not available anywhere else."

Owner of the gluten free produce store, Georgina, says that about 60 people a week would go into the store, ask questions and then buy the same or similar product at a supermarket chain or online.

We would recommend to Georgina to create an online store since the store already has a website. Sell products online will save time, money and most likely trouble. She will work less hours, make less effort and still get paid. 

The traditional way of shopping is certainly more ideal for small businesses like this but as a recent Google study found, almost 49% of people buy their goodies online while the rest of them prefer the traditional purchase way. This way chances of selling to those that purchase online and those that buy things directly from stores are higher!

Source: www.webpronews.com 

Danger Ahead: Beware of Investing in the Eurozone!

The story of recent unfolding events linked to the Cyprus economic crisis and eventual so called “Bail-In” deal, will now likely play out across Europe and beyond as EU citizens and foreign investors holding deposits within the EU start to contemplate this question “Could it happen to me?”.

In an unprecedented step the Troika (name given to the collection of EU & International money lenders) forced the recently elected Cypriot Government to accept what basically amounts to daylight robbery of depositors accounts within the 2 main Banks of Cyprus (Marfin Popular Laiki Bank and Bank of Cyprus). Everyone with more than 100,000 euro deposited within these 2 Banks will surely lose out in a significant way.

Question is, what will the people of other economically struggling member nations think now? Greece, Spain, Ireland and Portugal already received Bail-Outs and more are possible down the line. Behind EU closed doors it is thought that the Cypriot so called “Bail-In” is a kind of pilot template to use for the next country in trouble, which is likely to be Italy.

It is however a recipe for an economic disaster and subsequently no-one will invest in Cyprus again for many decades and with rising taxes many companies will relocate or simply close.

If the people of the EU are not over taxed enough already, it now seems that the enduring unelected EU bureaucracy is desperately attempting to save the euro, by confiscating the life savings of ordinary people to pay for it.

There are however some Political voices telling the true story of how it really is. The leader “Nigel Farage” of the party in the UK called “UKIP” with a dramatically rising popularity has an interesting take on the matter. Check out the Video on top.

Malta, still the best place to do business in Europe

As Perpetual Travellers go, for good reason we tend to take an integrated approach to the work and life balance. Mixing business with pleasure is often necessary for the small to medium Company owner. Shopping around for the most cost effective corporate structure is always wise, especially considering the current global financial climate. Our research in Europe points to Malta as the best place to set up a Company and declare taxes, which we advise all Perpetual Travellers to do, as the days of NO TAX OFFSHORE have simply gone. 

Previously, Cyprus was a strong competitor, however they are playing with the Tax rate these days by introducing the following new Taxes and increases:

• A new stealth Tax of 350 euro just to have a Company each year.
• Increase from 15% to 20% for residents on the dividends.
• VAT increase from 15% to 17%.

All of the above may rise again as austerity hits Cyprus, which will take Cyprus pretty much out of this market at least for new start ups. 

Both Cyprus and Malta as Island countries are warm with mild winters, friendly locals, Business and Tourism orientated, pleasant for family visits, feature a rich history and can be trusted in the main as they are fully fledged members of the EU.

Malta however is the main islands of opportunity now, as they offer the possibility to set-up and manage a Company relatively cheaply with lower overall taxes, in addition to mixing business with pleasure. This week we will focus on Malta…

Malta, Island of opportunity
In recent times, Malta is respected generally as the best place to do business in Europe and considered by many as the 5th best place in the world (Forbes Tax Misery Index 2010).

Even though the European Union has harmonized the corporate laws within its members states there are still major differences between the countries and how they have decided to implement the EU Directives according to local requirements. Maltese corporate law is in principle based on British corporate law flavoured with local adjustments and harmonized with EU Directives. A Malta ltd company is taxable in an EU member state and gives you all the benefits related to the common market and freedom of establishment. Malta offers by far the lowest tax regime within the EU and is a solid platform for anyone involved in international trading business.

The corporate tax rate in Malta is 35%, but the shareholders qualify for a tax credit following a distribution of dividend by the Malta Ltd company. In most cases, the tax credit reduces the total tax suffered by 6/7 of the corporate tax rate. Shareholders may achieve a taxable net effect of down to only 5% where the 6/7 tax credit is applicable.

If one wishes to distribute dividends from a Malta based company to a holding company in another EU/EEA state, it is possible do so tax-free, since the EU Parent-Subsidiary Directive will apply between any companies limited by shares within the EU/EEA. Maltese tax incentives leading to a substantial tax savings are available to any size of enterprise.

Tax is obviously a very important matter for many people; however, in some cases Trust and Confidentiality are of a higher value. If you can combine the two you have a winning formula. Regulatory framework in Malta provides for excellent opportunities to meet your offshore expectations onshore.

Malta offers a very stable financial environment. Prudent policies shelter Malta’s insurers and banks from worst of any financial storm. High quality corporate service firms, low wage levels, skilled labour, Freeport and excellent flight connections put Malta on top of any ranking of the best business place in Europe.

For more information about intelligent Maltese structures try contacting malta@taxtwister.com

The French Government target foreign owners of holiday homes with a draconian Tax grab

Owners of holiday homes in France are set to be targeted with punitive Tax rises announced by Francois Hollande, leader of the new Socialist Government, as they seek to tax so called wealthy foreigners that supported France in the past, in order to reduce France's significant budget deficit.
According to the plans Tax rises will affect foreign-owned second homes in the following areas...

• Tax on rental income is set to rise from 20% to 35.5%.
• Capital gains tax on property sales is set to rise from 19% to 34.5%.

What is even worse is that the Tax rise on rental income will be retrospective as from the 1st of January 2012. The increase in capital gains Tax will be applicable as from the end of JUly 2012, which means in reality that property owners will have precious little time to react by selling their homes.

Foreign holiday home owners already pay 2 other notable Taxes to the French Government called the “Taxe Fonciere” (paid by the house owner) and the “Taxe d'habitation”, (paid by those who live in it).

If this new Tax law is introduced, the rate of French capital gains Tax will be practically double for EU residents on their French property capital gains. Just another pleasure for living in euro-zone. Any country that enjoys a double taxation system can deduct any Tax paid at source in France on French gains from the Tax on the same gains of their own country. However, if the French Tax is higher, no rebate will be due.

The French finance ministry indicated that the new rule would affect approximately 60,000 rental properties in France the owners of which made an average profit of €10,000, equal to a total of €50 million income for the French revenue this year and €250 million in 2013. This is on paper at least, but in reality people will likely vote with their feet if not in the short term the medium term. Who will want to invest in France now?

These short term thinking Tax plans will effectively attempt to penalise people for choosing France as a country to invest in and spend money on holiday, all in the cause of a so called "social charge", which sounds noble, but is likely to do long term damage. What the French Government do not calculate is the massive potential loss to Tourism and future property sales, as the message is clear “Do not invest in France or we will bleed you dry”. 

The country most affected by these measures is the UK, whereby approximately 200,000 British people own second homes, many of which travel using budget airlines. The British treasury recently stated "We will need to study the details. But we will of course challenge any proposal which breaches European single market laws and anti-discrimination rules.".

Europe is becoming an over-taxed, over-regulated and more uncomfortable (by the day) place to live at present and France has just placed itself towards the top of the list of destinations not to live or invest in.