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News
05
Tightening up on tax havens
President Obama has announced major US companies have written stiffer financial penalties, in some
a number of proposals to crack to Congress warning that the cases double the existing
down on existing offshore tax implementation of the plans will punishment.
havens and tighten up on the have a severely detrimental effect *The IRS will take on 800 new
regulations governing tax on the American business employees, many of them
deferrals. community. specialists, devoted specifically to
The president has vowed to Obama proposes to abolish international enforcement.
“close the international tax gap,” existing tax breaks and tax Commentators in the States
following the agreement reached deferrals. Many of Obama’s have predicted that many offshore
at the G20 summit to act against proposals were originally aired in banks, unwilling to become IRS
offshore tax havens. “For years, the Levin-Obama Anti-Tax Haven vassals, will turn away new
we’ve talked about shutting down legislation, first introduced in American clients and terminate
overseas tax havens,” Obama said. 2005. banking arrangements with some
“That’s what our budget will Other provisions in the Obama who are current customers.
finally do.” plan include: Editor’s comment: The
Obama’s plans parrot the *Using the current “Qualified President is certain to struggle to
traditional IRS and US Justice Intermediary” system under get these proposals through
Department attitude that which the IRS decides which congress. The American business
apparently assumes any offshore offshore banks are acceptable to community is a vocal and well-
financial activity by an American them. Foreign banks will be organised lobby, and not one it is
citizen is probably illegal or illicit. required to reveal any and all wise to cross. Obama should
But the proposals, announced information the IRS demands. certainly consider their advice
on 4 May, have sparked a fierce *US investors who fail to report regarding the negative impact his
response. Approximately 200 offshore investments will face proposals may generate.
Offshore accounts which
A rising sun in Japan
offer the best returns
The Japanese economy appears to their downward shift, the Tokyo
be bouncing back, according to stock market has rallied for two
Savings rates are at an all-time of £5,000 on its Privilege 30 Issue
an assessment by Chuo Mitsui consecutive days. Further recent
low since the Bank of England II. A 30-day notice period for
Trust International. Daisuke rises of 3.9% and 1.7% in the
kept rates at their current level. withdrawals is required.
Ishihara, a portfolio specialist Nikkei 225 provides evidence that
Even expats with substantial If you want to receive your
with Chuo Mitsui, notes the latest some confidence is returning.
savings find it tough to find interest monthly rather than
Japanese production output index “These positive key indicators
accounts that can beat inflation. annually then you will need to opt
indicates an increase of 1.6% in should make medium term
According to financial for a monthly interest account.
March, the first rise in six investors more confident about
statisticians Moneyfacts Irish Currently the best rate you can
months. Also it estimates April’s their investments. Japanese
Nationwide (IOM) is offering up get for these accounts is with
production output should companies have had a tough time
to 4.3pc on fixed-term savings Alliance & Leicester International,
indicate an increase of 4.3%. A adjusting inventories, suspending
bonds. Irish Nationwide will pay but this can only be accessed
further increase of 6.1% is factory lines and freezing
interest of 4.25 per cent on online. A & L’s eSaver Offshore
projected for May. recruitment over the past few
deposits of £25,000 or more on its Flexible Income Issue 1 pays 2.96
“The 1.6% increase in months. But these latest positive
Instant Quarterly account. per cent on deposits of £25,000.
production output represents a figures demonstrate they may
For those with smaller sums to However, 60 days’ notice on
reversal in the previous have completed this period of
save, Anglo Irish Bank is paying withdrawals is required.
downward trend, with a decline correction and their strategy is
3.3 per cent on its Privilege Access Bradford & Bingley
in February of 9.4% and starting to bear fruit. Therefore,
Issue II, with a mandatory International’s Global Saver offers
January’s record 10.2% fall,” said when the global economy starts
minimum sum of £5,000. the less favourable rate of 2.72 per
Mitsui. “It suggests green shoots moving again, Japanese
Notice accounts are paying cent for deposits of at least £5,000.
of recovery are being seen in the companies could be healthier
particularly badly at the moment. Again, there is a 60-day notice
world’s second-largest economy. than others and investors will
Irish Nationwide (IOM) has the period on withdrawals.
This positive figure is backed by a hopefully be rewarded.”
top-paying notice account at 4 per Irish Nationwide (IOM) also
decrease of 3.3% in the inventory Editor’s comment: Most media
cent on its International 90 offers 4.5 per cent on its three-
index, indicating that Japanese attention tends to focus on
account. This specifies 90 days’ month fixed-rate bond, providing
companies have completed a Japan’s larger neighbour, China.
notice for withdrawals, the same you have £50,000 you can deposit.
period of inventory adjustment. The real story behind the last
rate that is paid on deposits of Editor’s comment: Not a good
“Although consumer price decade or so for Japan has been a
£50,000. Anglo Irish Bank is time for savers. These appear to be
index, unemployment rate and period of crippling deflation. Is
paying 3.95 per cent on balances the best of some fairly rum deals.
car sales figures - the latter a key the UK now destined for the
© Zts
indicator in Japan - continue same fate?
www.investmentinternational.com May 2009 Investment International
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