Companies & Regulation

An old American joke has it that hell is where the Swedes are in charge of entertainment. But the last laugh in fiscal policy matters in Europe will probably go to Swedish legislators as they vote for implementing a reduction of corporate income taxes (CIT).

The Taxpayers’ Alliance has published a summary of its final report, proposing a Single Income Tax to tax streams of income once. As stated by Allister Heath, Chairman of the TPA Tax Commission, “the old order is broken and needs radical reform. But we are also realists: our proposals, while far-reaching, are practical”.

Portugal is traditionally a leftist country. Since the Carnation Revolution in 1974, in which the Left threw out the fascist government of Marcelo Caetano, it is fashionable in Portugal to be leftist and being labeled socialist. If a proof was needed, in the 2011 elections, all 6 parties in parliament claimed to be leftist parties, and all the three parties who signed the Troika memorandum (yes, the ones who signed it were: PS, PSD and CDS/PP) have Social or Socialist in its very name.

This is the decrease in the rate of economic growth per capita that results from an increase in the tax revenue to GDP ratio by 10 percentage points. This is…

Everything seems to go wrong in Spain and Madrid’s policy to achieve broader deficit reduction targets looks inappropriate. The Spanish government’s introduction of new legislation to restrict interest deductions for taxation purposes could further reduce the flow of international capital into domestic commercial property, exactly at a time when the depressed local market is an important factor weighing on Spain’s recession-hit economy, the European Public Real Estate Association (EPRA) said.

This is the expected revenue from the financial transaction tax promoted by the EU. The proposal is expected to come into effect from 1st January 2014 and applies to the transactions carried out by financial institutions (banks, investment firms, insurance undertakings, collective investment undertakings, etc.) acting as party to a transaction, either for their own account or for the account of other persons. Most financial instruments (securities, bonds, etc.) and derivatives thereof (such as options or swaps) will be covered by the tax.

If adopted as a new own resource of the EU budget the financial transaction tax (FTT) will significantly reduce the contributions of member states to the EU budget, according to estimates presented yesterday by the European Commission. Member States’ contributions would be slashed by €54bn in 2020.The Commission proposes that two thirds of the revenues of the FTT go to the EU budget, reducing by the same amounts Member States’ contributions based on their GNI, with the remaining one third being retained by Member States.

Canada was recently elected by Forbes magazine number one country in the world to do business. Among other things, its corporate tax rate (federal and provincial rates combined) is at 25%, the lowest among G7 countries. But some provinces in Canada still have to be convinced that this is a move in the right direction. May be the fact that revenues from corporate taxes remain high, and even higher than it was before the cuts, will help them.

In March 2010, when the Greek debt crisis was heating up, then-ECB president Jean Claude Trichet declared to the EU parliament that the “monetary Union in Europe is far more than a monetary arrangement. It is a union of shared destiny”. Less than two months later the ECB reversed its refusal to monetize debt and openly started buying government bonds in violation of its own charta. Germany also gave up its reservations about bailing out other countries. A first aid deal for Greece was signed and, because that didn’t help for long, a Euro rescue package to the tune of € 750 billion was put in place.