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The Fair Tax Town (FTT) movement (also called the Powys tax rebellion [1] ) is a movement established by several shop owners in Crickhowell, Powys, Wales.
| | This article needs additional citations for verification .(May 2016) |
The Fair Tax Town (FTT) movement (also called the Powys tax rebellion [1] ) is a movement established by several shop owners in Crickhowell, Powys, Wales.
During the establishment of the movement, a documentary was made by the BBC along with it. This documentary, narrated by Heydon Prowse is called "The Town that went Offshore" or "The Town That Took on the Taxman" and was first shown in January 2016.
The movie follows the business owners as they decide to establish an untaxed Manx company which designs and owns a brand (Crickhowell Fair Tax), use the brand in their advertising and pay royalties for using this brand, as big companies do with their own brands. Their Manx company sets up a Dutch subsidiary which receives the royalties and sends them to the Isle of Man, since Britain would tax royalties sent directly to a tax haven, but charges no tax on royalty payments to the Netherlands, and the Netherlands charges no tax on royalties sent to tax havens. Thus their money accumulates tax-free in the Isle of Man, and the movie suggests ways to use it for expenses in Wales, such as borrowing it. The movie also discusses customer relationship managers which tax authorities assign to big businesses to ensure their tax arrangements are valid. [2] [3]
The movement's aim is to persuade governments to change their tax regulation so that small businesses get the same level of tax as multinationals and other large businesses. [4] To help achieve this, FTT has started to share their expertise on how to make businesses engage in tax avoidance. Since then, many other towns have adopted the scheme.
After spending two years developing and publicizing the project, the Crickhowell businesses decided not to proceed. Prowse, the documentarian, said he hoped another group of people would take the idea another step, "If you want to put your money through a scheme like that, you’ve got to expect that the taxman’s going to contact you and you’re going to have to defend yourself, possibly in court." [5]
The Isle of Man, also known as Mann, is an island nation and self-governing British Crown Dependency in the Irish Sea between Great Britain and Ireland. The head of state, Queen Elizabeth II, holds the title Lord of Mann and is represented by a Lieutenant Governor. The United Kingdom is responsible for the isle's military defence.
The economy of the Isle of Man is a low-tax economy with insurance, online gambling operators and developers, information and communications technology (ICT), and offshore banking forming key sectors of the island's economy.
The economy of Jersey is a highly developed social market economy. It is largely driven by international financial services and legal services, which accounted for 39.5% of total GVA in 2019, a 4% increase on 2018. Jersey is considered to be an offshore financial centre. Jersey has the preconditions to be a microstate, but it is a self-governing Crown dependency of the UK. It is considered to be a corporate tax haven by many organisations.
A corporate haven, corporate tax haven, or multinational tax haven, is used to describe a jurisdiction that multinational corporations find attractive for establishing subsidiaries or incorporation of regional or main company headquarters, mostly due to favourable tax regimes, and/or favourable secrecy laws, and/or favourable regulatory regimes.
Creative accounting is a euphemism referring to accounting practices that may follow the letter of the rules of standard accounting practices, but deviate from the spirit of those rules with questionable accounting ethics—specifically distorting results in favor of the "preparers", or the firm that hired the accountant. They are characterized by excessive complication and the use of novel ways of characterizing income, assets, or liabilities, and the intent to influence readers towards the interpretations desired by the authors. The terms "innovative" or "aggressive" are also sometimes used. Another common synonym is "cooking the books". Creative accounting is oftentimes used in tandem with outright financial fraud, and lines between the two are blurred. Creative accounting practices are known since ancient times and appear world-wide in various forms.
An offshore bank is a bank regulated under international banking license, which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and transparency, accounts with offshore banks were often used to hide undeclared income. Since the 1980s, jurisdictions that provide financial services to nonresidents on a big scale can be referred to as offshore financial centres. OFCs often also levy little or no corporation tax and/or personal income and high direct taxes such as duty, making the cost of living high.
Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdictions that facilitate reduced taxes.
Crickhowell is a town and community in southeastern Powys, Wales, near Abergavenny, and is in the historic county of Brecknockshire.
The Phone Co-op is a consumer co-operative in the United Kingdom, which provides landline, mobile telephone and Internet services, including web hosting and broadband. Now part of the Midcounties Co-operative, the largest independent co-operative in the UK, it is owned by its customer-members who democratically control the business and who share in its profits. This makes The Phone Co-op the only telephone co-operative in the UK.
Offshore investment is the keeping of money in a jurisdiction other than one's country of residence. Offshore jurisdictions are used to pay less tax in many countries by large and small-scale investors. Poorly regulated offshore domiciles have served historically as havens for tax evasion, money laundering, or to conceal or protect illegally acquired money from law enforcement in the investor's country. However, the modern, well-regulated offshore centres allow legitimate investors to take advantage of higher rates of return or lower rates of tax on that return offered by operating via such domiciles. The advantage to offshore investment is that such operations are both legal and less costly than those offered in the investor's country—or "onshore".
A tax haven is a jurisdiction with very low "effective" rates of taxation for foreign investors. In some traditional definitions, a tax haven also offers financial secrecy. However, while countries with high levels of secrecy but also high rates of taxation, most notably the United States and Germany in the Financial Secrecy Index ("FSI") rankings, can be featured in some tax haven lists, they are not universally considered as tax havens. In contrast, countries with lower levels of secrecy but also low "effective" rates of taxation, most notably Ireland in the FSI rankings, appear in most § Tax haven lists. The consensus on effective tax rates has led academics to note that the term "tax haven" and "offshore financial centre" are almost synonymous.
An offshore financial centre (OFC) is defined as a "country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy."
The Institute on Taxation and Economic Policy (ITEP) is a non-profit, non-partisan think tank that works on state and federal tax policy issues. ITEP was founded in 1980, and is a 501(c)(3) tax-exempt organization. ITEP describes its mission as striving to “keep policymakers and the public informed of the effects of current and proposed tax policies on tax fairness, government budgets and sound economic policy.”
The European Union financial transaction tax is a proposal made by the European Commission to introduce a financial transaction tax (FTT) within some of the member states of the European Union (EU).
Mossack Fonseca & Co. was a Panamanian law firm and corporate service provider. At one time it was the world's fourth-largest provider of offshore financial services. From its 1977 foundation until the April 2016 publication of the Panama Papers it remained mostly obscure, even though it sat at the heart of the global offshore industry and acted for about 300,000 companies. More than half were registered in British tax havens, as well as in the United Kingdom.
Heydon Prowse is a British activist, journalist, satirist, director and comedian. He is best known for writing and performing in BBC Three's Bafta-winning The Revolution Will Be Televised alongside Jolyon Rubinstein. As part of that show he gave George Osborne a GCSE maths text book, a stunt that featured on the front cover of The Daily Telegraph and other publications.
Dutch Sandwich is a base erosion and profit shifting (BEPS) corporate tax tool, used mostly by U.S. multinationals to avoid incurring EU withholding taxes on untaxed profits as they were being moved to non-EU tax havens. These untaxed profits could have originated from within the EU, or from outside the EU, but in most cases were routed to major EU corporate-focused tax havens, such as Ireland and Luxembourg, by the use of other BEPS tools. The Dutch Sandwich was often used with Irish BEPS tools such as the Double Irish, the Single Malt and the Capital Allowances for Intangible Assets ("CAIA") tools. In 2010, Ireland changed its tax-code to enable Irish BEPS tools to avoid such withholding taxes without needing a Dutch Sandwich.
The Paradise Papers are a set of over 13.4 million confidential electronic documents relating to offshore investments that were leaked to the German reporters Frederik Obermaier and Bastian Obermayer, from the newspaper Süddeutsche Zeitung. The newspaper shared them with the International Consortium of Investigative Journalists, and a network of more than 380 journalists. Some of the details were made public on 5 November 2017 and stories are still being released.
Conduit OFC and sink OFC is an empirical quantitative method of classifying corporate tax havens, offshore financial centres (OFCs) and tax havens.
Ireland has been labelled as a tax haven or corporate tax haven in multiple reports, an allegation which the state rejects. Ireland is on all academic "tax haven lists", including the § Leaders in tax haven research, and tax NGOs. Ireland does not meet the 1998 OECD definition of a tax haven, but no OECD member, including Switzerland, ever met this definition; only Trinidad & Tobago met it in 2017. Similarly, no EU–28 country is amongst the 64 listed in the 2017 EU tax haven blacklist and greylist. In September 2016, Brazil became the first G20 country to "blacklist" Ireland as a tax haven.