EU hard stance on cracking tax evasion

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EU hard stance on cracking tax evasionThe tax commissioner of EU has made it clear that unilateral actions by individual EU country won’t lead to a breakthrough in fighting tax evasion. The commissioner is suggesting several steps. The first step is to put more pressure on tax heavens. The second one is to address and fight the so-called aggressive tax planning and close national loopholes that help European companies to reduce tax burden. The proposed approach is working well. The Caymans Islands are moving toward disclosure of directors, fund managers and beneficiaries of hedge funds registered in the Cayman Islands. Switzerland has agreed to collect tax on behave of the UK, French and German tax authorities and transfer taxes. Swiss banks are demanding their clients to sign a statement saying that taxes being settled in a country of a bank client’s residency. Hong Kong is feeling a heat and pressure from the USA and EU to prevent nationals from those countries to abuse a tax territorial taxation principle. The territorial taxation principle grants a tax exemption of non-Hong Kong profit leading to tax free profit in a Hong Kong company. If to take into an account that there is no withholding tax on outgoing dividends one can understand a popularity of Hong Kong companies in international tax planning.