The HSBC files: aggressive tax avoidance

[Garbarsardar]

HSBC’s Swiss private bank:

• Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland.

• Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes.

• Colluded with some clients to conceal undeclared “black” accounts from their domestic tax authorities.

• Provided accounts to international criminals, corrupt businessmen and other high-risk individuals.

The HSBC files, which cover the period 2005-2007, amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets.Source

It is worthwhile to peruse the statement of Lord Fink, in the aftermath of revelations:

“I didn’t object to his use of the word ‘tax avoidance’. Because you are right: tax avoidance, everyone does it.” “I chose the mildest end of the spectrum that I was advised on,” he said. “What I did … was at the vanilla, bland, end of the spectrum.”

And presiding over this very unholy mess, Baron Green of Hurstpierpoint, who was rewarded for his oversight with a place in the British Government.

Finally, the 3000 cases investigated by the HMRC have resulted in one (1) prosecution. This is probably because:

From George Osborne’s patchy stitch-up of a tax deal with Switzerland, which failed to bring in the promised revenue, to the extraordinarily forgiving “amnesty with interest” that Mr Gauke offered to evaders who had dabbled in Liechtenstein, tax dodging is approached first as a matter for haggling and only secondly as a crime.

[Simon Cashmere]

But if you have a wage earner that gets busted for not paying $1000 in tax, off to the slammer with a lengthy dressing down from the judge about how worthless they are before they go.

[Dr Zoidberg]

But if you have a wage earner that gets busted for not paying $1000 in tax, off to the slammer with a lengthy dressing down from the judge about how worthless they are before they go.

It's pretty ridiculous.

[Condottiere 40K]

1326
Don't get caught, and the current trend (actually it goes back a while) is to use a well-paid consultant rather than a bank directly.

[Thorn777]

It is worthwhile to peruse the statement of Lord Fink, in the aftermath of revelations:

“I didn’t object to his use of the word ‘tax avoidance’. Because you are right: tax avoidance, everyone does it.” “I chose the mildest end of the spectrum that I was advised on,” he said. “What I did … was at the vanilla, bland, end of the spectrum.”

And presiding over this very unholy mess, Baron Green of Hurstpierpoint, who was rewarded for his oversight with a place in the British Government.

Finally, the 3000 cases investigated by the HMRC have resulted in one (1) prosecution. This is probably because:

But where is Ferrets slamming you about the huge difference between avoidance and evasion and how there is no much used gray area between them?

[Stavroforos]

It's no wonder that Greece's most wealthy tax evaders choose to keep their money in Swiss HSBC accounts.

[neoptolemos]

It's no wonder that Greece's most wealthy tax evaders choose to keep their money in Swiss HSBC accounts.

I guess they are the only Europeans
I mean there is no chance for Germans or British or even Finns to be in the list since tax evation is a Greek trait isn't it?

[Stavroforos]

I guess they are the only Europeans
I mean there is no chance for Germans or British or even Finns to be in the list since tax evation is a Greek trait isn't it?

Oh of course it's only Greeks, but even then, don't lump these guys who accidentally mismanaged their taxes with the scum of the earth middle and lower class who don't pay taxes.

[neoptolemos]

Oh of course it's only Greeks, but even then, don't lump these guys who accidentally mismanaged their taxes with the scum of the earth middle and lower class who don't pay taxes.

Poor them (sad violin music)

[justicar5]

if this was 'scroungers' they'd all be in jail. All the people involved in this, and those that advised them are guilty of fraud on a grand scale and should be prosecuted as such, with exemplary damages and fines levelled, if they are left with a house and clothes, the damages where not large enough.

[sabaku_no_gaara]

if this was 'scroungers' they'd all be in jail. All the people involved in this, and those that advised them are guilty of fraud on a grand scale and should be prosecuted as such, with exemplary damages and fines levelled, if they are left with a house and clothes, the damages where not large enough.

Never going to happen, being rich is being the modern day aristocrat.

[G-Megas-Doux]

Lets be frank about this, tax avoidance will still happen if you close the loop holes because they simply don't want to pay a higher per cent for earning more money, the way they will do this is the time honoured way of moving all the money and transactions off shore. You close that loophole a lot of money will leave the country before that loop hole is closed and it will take years to bring the money back into the economy. Tax evasion is a different thing where instead of using the loop holes to pay the money due they just flat out lie about earnings and don't pay the money. One is a crime of evading tax the other is paying taxes correctly because that is how the system is structured. The loop holes exist because we use a medieval system of raising government revenue by farming a known pool of income rather than overhauling the system to be completely indirect.

[Knight of Heaven]

In conclusion, if you are rich, you avoid, if you are poor, you evade.


Loop hole or not, the principle is the same in my book...

[neoptolemos]

In conclusion, if you are rich, you avoid, if you are poor, you evade.


Loop hole or not, the principle is the same in my book...

Well said mate, this is my opinion too.

[Hekko]

In conclusion, if you are rich, you avoid, if you are poor, you evade.


Loop hole or not, the principle is the same in my book...

This is not exactly true though is it. Tax avoidance is legal, where as tax evasion is not. If there is a problem it is with the tax codes and tax laws that mean that there are different effective tax rates that are legal and that reaching the lowest of them is a matter of such difficulty that you have to employ very expensive tax consultants in order to do so.

Tax avoidance on the other hand is simply lying about income or something similar. So the mechanics are wildly different.

[Ybbon]

In conclusion, if you are rich, you avoid, if you are poor, you evade.


Loop hole or not, the principle is the same in my book...

It really is not that simplistic.

Tax Avoidance also covers measures like ISA (Individual Savings Account) and is something encouraged for everyone to get if they can, it saves paying income tax on the interest earned whereas if you use a regular savings account you pay interest at the highest level of income tax you pay - so by using an ISA you avoid paying more tax than you could. That is legal tax avoidance, and then what HSBC were doing also could be classed as avoidance but using an ISA would not be considered as unethical, what they were doing in seen as unethical at best and akin to evasion if not outright evasion at worst.

Tax Evasion on the other hand could be more simply called Tax Abuse, and is always illegal and unethical. So really there are many shades of grey (way more than 50) and they are not just loopholes and not just for the rich/poor.

[Phier]

Tax Evasion on the other hand could be more simply called Tax Abuse, and is always illegal and unethical. So really there are many shades of grey (way more than 50) and they are not just loopholes and not just for the rich/poor.

I'm not sure I can call tax evasion "unethical" as I do not believe there is a moral obligation to pay taxes. A very large segment of the economy is fueled by these "unethical" tax evasions. When I get paid in my office with a large wad of cash, I'm not thinking "well there goes someone who doesn't trust banks!" no its "there is someone paid under the table/in tips".

[Simon Cashmere]

I'm not sure I can call tax evasion "unethical" as I do not believe there is a moral obligation to pay taxes. A very large segment of the economy is fueled by these "unethical" tax evasions. When I get paid in my office with a large wad of cash, I'm not thinking "well there goes someone who doesn't trust banks!" no its "there is someone paid under the table/in tips".

I just don't think about it. You have cash - that would be fine thanks. Where you got it, not my problem. I account for it of course....but where they get it...I could care less.

Yeah there is no moral obligation to pay taxes, only a legal one. 2/3 of the taxes in my country go to idle welfare recipients. Yeah I bust my ass to give 50% of my money in income tax to fuel the massive welfare state.

[Dr Zoidberg]

Yeah there is no moral obligation to pay taxes, only a legal one. 2/3 of the taxes in my country go to idle welfare recipients.

No, it doesn't.

The 2014-15 Budget includes $146 billion of welfare spending, or 35 per cent of Budget expenditure.

http://www.budget.gov.au/2014-15/con...l_Services.pdf (Page 4)

[Heinz Guderian]

The only question now is whether i should vote for the rich guy with the blue tie backed by tax dodging elites or the rich guy with the red tie backed by tax dodging elites? Man democracy is a toughie.