International Taxation and the Tax ‘Cartels’
Where you may be fighting against tax havens, or taking advantage of them, international tax law affects the way in which your company works. We speak Thierry Afschrift who speaks more on tax, internationally, and in Switzerland.
What do you believe are the benefits and the downfalls of current international tax laws? Are there any developments you would like to see?
The trend in international taxation, I would say, is a kind of “States Cartel”, against taxpayers. The role of the OECD, which has been in the past to enhance and sustain economic exchanges between its Member states, has become an instrument through which tax competition between States is prevented.
States tend to prevent tax competition and thus create a kind of “cartel” in order to keep certain States from implementing a more favourable tax regime than others.
This would have been translated into facts by the rules of automatic exchange of information on savings, under which States have the obligation to transmit precise information about the bank accounts of their citizens. Thus, States will know everything about the fortune of the taxpayers; in reality, this is the first step towards an increase of the taxes, but in practice, when the State is aware of the nature of the taxable basis, it always increases the tax pressure.
How have the recent events in Switzerland affected you work and your clients?
Clients are henceforth forced to much more “compliance” et thus, need even more their lawyer’s help in order to, on one hand, comply with the legal requirements put in their charge and, on the other hand, explore new ways, in order to legally defend their interests.
As a consequence, demands for advice related to their professional, patrimonial and estate planning will increase, while at the same time, taxpayers will have more and more to defend themselves against the tax administration and sometimes, the banks.
What do you believe is the most important upcoming change in international tax regulation?
The risk resides in the fact that, like in the European Union, States could not limit themselves to implement common procedure rules and fix minimum taxation rates, or mutually prevent themselves from implementing favourable tax regimes for their citizens. When one talks about “Fight against tax havens” and knows that any State is potentially considered as a tax haven in the eyes of its neighbour, we realize that the ultimate goal of certain people is to put in place a generalized tax hell.
What do you find are the most common taxation issues that arise in working with and for these clients, and do you guide your clients through this?
The role of a tax lawyer is to always defend the interests of his clients, while respecting the law. Every step that may be taken in order to put the client in position to pay the least amount of taxes, while taking the least amount of possible risks and of course, without breaking the law; this is considered an intrinsic mission for a tax counsel.
Is there anything you would like to add?
Switzerland, in the future, could possibly occupy a very important position. Of course, people who do not operate in accordance with the law, do not really any interest in investing their assets.
Nevertheless, for people and companies who are interested in investing in Switzerland, or to establish an actual residence, Switzerland may be an particularly interesting option, because of its tax regime (not comparable to a tax haven’s one, yet quite moderate) and the high degree of legal certainty provided to those interested.
Thierry Afschrift
Founding Partner
My name is Thierry Afschrift and I am lawyer from Belgium.
I am the Founding Partner of AFSCHRIFT LAW FIRM, with offices in Belgium (Brussels, Antwerp), Switzerland (Fribourg, Geneva), Luxembourg, Spain (Madrid), Israel (Tel Aviv) and Hong Kong.
I have been a member of the Swiss Bar since 1996. The firm’s activities in Switzerland, as well as in the other countries, concentrate on tax law, as well as on the other related branches of law: white collar crimes law, accountancy law, corporate law and civil law, with respect to the rules concerning matrimony, estate and patrimony tax planning.
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