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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Wednesday, July 23, 2003 - Vol. 5 No. 87
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In This Issue:
* COMMENT: Swiss Bank Secrecy Lives
* OFFSHORE: UK Wealthy Expats Face Big Taxes. OECD Loves Jersey.
C.F.P. Panama Conference. Will HSBC Buy Bank of Bermuda?
* WEALTH: Rich Not Getting Richer; US, UK, Canada All Lose Ca$h.
IRS Scares Tax Pros. New EU Nations Must Shed Business Tax Breaks.
Special Offshore Tax and Residency Conference Notice.
Ansbacher Banks for Sale. RSA Tax Amnesty Problems.
* PRIVACY & RIGHTS: UK Anti-Money Laundering Gone Wild; Plan Dead.
US Facial Passports Planned. Mounties Want Cell Phone Buyer IDs.
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Our Guest Comment is by ROB VRIJHOF, member of the Sovereign Society Council of Experts and senior partner at the investment firm of Weber Hartmann Vrijhof & Partners Ltd. in Zurich, Switzerland.
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COMMENT: Swiss Bank Secrecy Lives
Dear A-Letter Reader:
Last month, after nearly 15 years of debate, European Union nations finally agreed on the "EU Savings Tax Directive," which includes a comprehensive program of tax information exchange between EU states.
The directive, which becomes effective January 1, 2005, effectively eliminates banking secrecy in the EU nations that signed it. But it does not apply to Switzerland, which is not an EU member. Swiss bank secrecy remains intact.
Because Switzerland borders several EU countries and holds more than 1/3 of the world's private wealth, we came under a great deal of pressure from the EU to begin exchanging information with EU tax authorities.Indeed, the EU threatened to impose economic sanctions against Switzerland if it did not eliminate bank secrecy.
However, the Swiss government rejected these demands. And to support its stand, it pointed to the refusal of the EU's own members, Austria, Belgium and Luxembourg, that took the same position as Switzerland in defense of their own bank secrecy laws.
In the end, these three EU members agreed to impose a withholding tax against income earned by EU residents, while not identifying such residents to their domestic tax authorities. Switzerland has now chosen to follow their example and will begin imposing a withholding tax on income from financial accounts owned by EU residents.
Americans, Canadians and other non-EU residents investing in Switzerland are NOT affected by this tax. Information about their accounts in Switzerland will not be provided to their domestic tax authorities, nor will any tax be withheld.
The withholding tax rate for EU residents investing in Switzerland will be 15% beginning in 2005, rising to 20% for the next three years and 35% thereafter. EU residents can reclaim this tax, but only by making application to their domestic tax authorities.
While the global campaign by high tax countries to dismantle bank secrecy is continuing, it will be met with vigorous opposition from Switzerland. Indeed, the incoming head of the Swiss Bankers' Assoc. announced June 26: "Under my chairmanship the SBA will continue to counter any domestic and foreign pressure on bank client confidentiality."
The Swiss government and its people will continue to stand up for financial freedom, self-determination and our long standing tradition and legal principal of bank secrecy. That's one important reason why more than one third of the world's offshore funds are entrusted to Swiss management.
Rob Vrijhof
E-MAIL: whvp@active.ch
Web site:http://www.swissbankaccount.com/
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COMMENT LINKS:
* EU tax deal leaves Swiss banking secrecy intact. LINK:
http://www.swissinfo.org/sen/Swissinfo.html?siteSect=105&sid=3900237
* Switzerland criticized for alleged "harmful tax practices."
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12363
* New SBA chief defends secrecy.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12399
* Swiss people overwhelmingly support bank secrecy.
LINK: http://www.swissbankaccount.com/editorial.html
* Retire In A Wealthy Nation: Switzerland. LINK:
http://www.escapeartist.com/efam/48/Retire_in_Switzerland.html
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* OFFSHORE *
WEALTHY EXPATS IN U.K. FACE POSSIBLE TAXES
LONDON: Major tax increases for wealthy UK-based foreigners? LINKS:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1057562606814
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1057562600055
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THE O.E.C.D. NOW LOVES JERSEY
ST. HELIER: Financial privacy is dead in Jersey, so the OECD loves it.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12704
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C.F.P. PANAMA CONFERENCE A SUCCESS
PANAMA: The Center for Freedom and Prosperity (CFP) meeting here drew major speakers opposing the OECD and anti-tax haven plans. LINK:
http://www.thepanamanews.com/pn/v_09/issue_14/business_01.html
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WILL H.S.B.C. BUY THE BANK OF BERMUDA?
HAMILTON: Rumors are flying and no one is denying. LINK:
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20030722/NEWS/107220045
* Bermuda foreign workers permits hurting offshore sector.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12703
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W.T.O. ACCEPTS ANTIGUA'S COMPLAINT AGAINST U.S.
US forced offshore Internet gambling operations to close. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A24490-2003Jul21.html
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* WEALTH *
RICH NOT GETTING RICHER
World's billionaires, millionaires lost $2 trillion in wealth in 2002.
LINK: http://edition.cnn.com/2003/BUSINESS/07/22/wealth.list.biz/
* CANADA's richest investors lost US$106 bil, 12% of assets. LINK:
http://www.globeandmail.com/servlet/ArticleNews/TPStory/LAC/20030722/RWEAL/TPBusiness/TopStories
* UNITED KINGDOM rich suffered financial loss of £240 billion in 2002.
LINK: http://www.thescotsman.co.uk/index.cfm?id=792092003
* AUSTRALIAN rich escaped the loss trend. Their wealth rose from $US333
billion in 2001 to $US347 billion last year. LINK:
http://www.theaustralian.news.com.au/common/story_page/0,5744,6789679%5E462,00.html
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I.R.S. SCARES TAX PROFESSIONALS
WASHINGTON: Crack down on tax shelters has tax advisors worried.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12691
* New US tax laws make tax filing even more complex, difficult.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=12683
* IRS makes cozy deal with H&R Block; taxpayer privacy shredded.
LINK: http://www.insightmag.com/news/447808.html
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NEW MEMBER STATES HIT BY E.U. HIGH TAX RULES
BRUSSELS: Come aboard; but no tax breaks for business allowed. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1057562597665
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** SPECIAL CONFERENCE ** Zurich, October 15 & 16, 2003
All about international tax planning and offshore residency. Henley & Partners invites you to find out more at LINK:
http://www.henleyglobal.com/conferences/Residence&RealEstateConference.pdf
E-mail to: zurich-office@henleyglobal.com
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* Investing in International Real Estate. LINK:
http://www.internationalliving.com/postcards.cfm?pcard=3039
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ANSBACHER BANK, IMPLICATED IN TAX EVASION, MAY BE SOLD JOHANNESBURG,
South Africa. Offshore banks operating in the Channel Islands, Cayman Islands and The Bahamas, allegedly were involved in Irish tax evasion from the 1970s to 1996. LINK:
http://www.businessreport.co.za/index.php?fSectionId=563&fArticleId=192470
* South Africans deterred by terms of offshore tax amnesty. LINK:
http://www.sundaytimes.co.za/zones/sundaytimes/business/business1058850747.asp
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* PRIVACY & RIGHTS *
U.K. ANTI-MONEY LAUNDERING GOES WILD
LONDON: Plan scrapped that would have forced 10,000 financial companies to spend $286 million verifying clients' identities.
LINK:http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1057562598435
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U.S. PASSPORTS TO GET FACIAL BIOMETRICS
Smile! The face plan to start by October 2004. LINK:
http://www.washingtontechnology.com/news/1_1/daily_news/21271-1.html
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CANADIAN I.D.'s DEMANDED FOR CELL PHONE BUYERS
The Mounties think all cell phone buyers may be crooks. LINK:
http://www.cbc.ca/stories/2003/07/18/Consumers/photophone_030718
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER. *
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