A US Senate bill proposing intensified action against offshore centers is to be introduced within the next week, according to Senate aides.
Demands for further crackdowns against tax havens and tax avoidance schemes are expected in the bill, led by Senator Carl Levin, which builds on legislation introduced last year along with Barack Obama. The House of Representatives is to follow suit with similar measures.
Proposed action to be taken will include:
– Expanding tax reporting requirements for ‘passive’ foreign investment vehicles.
– The closing of a loophole that allows US citizens to avoid taxes on US stock dividends offshore
– The classification of US-controlled offshore corporations as domestic for tax purposes.
– Giving Federal prosecutors an easier ride by shifting the burden of proof over legality on to the owners or controllers of offshore structures.
“Offshore tax haven and tax shelter abuses are undermining the
integrity of our tax system,” said Levin in a statement (reuters). “We cannot tolerate $100 billion in offshore tax abuses
burning a hole through our budget each year.
“We can fight back against secrecy jurisdictions and shut down offshore tax abuses if we have the political will.”
Switzerland and the Cayman Islands are thought to be the ones on the receiving end of this latest assault. However the legislation is not likely to see a smooth passage through both houses, with many legislators in receipt of campaign funds from corporations with a vested interest in keeping loopholes open.