Pearse Trust Blog

In order to guard against the fiscally harmful practice of treaty shopping, most international tax treaties carry provisions limiting treaty benefits to residents meeting certain tests set out in the treaties.

As its European neighbours agree to Switzerland’s tax agreement, the country of France is holding steadfast to its resolve not to accept the unprecedented proposal. Called Project Rubik, the arrangement allows Swiss banks to avoid releasing the names of their account holders if they agree to impose an income tax on the deposited funds. The monies are then transmitted to the countries in which the depositors reside, serving as a means of recouping the lost revenues from previously unpaid taxes.

Lately, a vocal group of wealthy people have been calling for more taxes on the rich.  From billionaire Warren Buffett in the States to L’Oreal heiress Liliane Bettencourt and other French high-earners asking the wealthy to pay more taxes on their incomes in order to help pull their countries out of debt, it’s inevitable that leaders will listen – and raise taxes.  France announced a 3% tax increase on its top earners, and Italy followed suit.  After plenty of debate, Italians earning over €500,000 annually will pay an extra 3%.  Italy’s move is largely symbolic, however; only 4,437 Italians declared €500,000 or more on their tax returns.  Spain is considering a similar measure, a 2% increase on high earners to raise €1.2 billion.