US Government closes in on Swiss Bank Accounts hiding US$20Billion.

The US Justice Department is seeking an order from a federal court in Miami, authorizing the Internal Revenue Service (IRS) to request information from the Zurich-based UBS AG about U.S. taxpayers who it believes are using Swiss bank accounts to evade US federal income taxes.

The summons, if approved, will direct UBS to produce records identifying U.S. taxpayers with accounts at UBS in Switzerland who elected to
have their accounts remain hidden from the IRS. In his court statement, former UBS banker Bradley Birkenfeld claims UBS had approximately $20 billion of assets under management in "undeclared" accounts for U.S. taxpayers.

A willful failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.

"We are working cooperatively with both the Swiss government and UBS to obtain this information. However, we are prepared to seek enforcement if
that process is not successful," said John A. DiCicco, Deputy Assistant Attorney General for the Justice Department's Tax Division.

Tax Haven Jersey no more, as agreement signed.

The Governments of Australia and Jersey have signed an Agreement for the Exchange of Information with Respect to Taxes. The Agreement provides for exchange of information on request in both criminal and civil tax matters.

In addition, Australia and Jersey have signed an Agreement for the Allocation of Taxing Rights with Respect to Certain Individuals and to establish a Mutual Agreement Procedure in Respect of Transfer Pricing Adjustments. This Agreement will allocate taxing rights over certain income derived by retirees, government employees and students and provide a mechanism to help resolve transfer pricing disputes.

The UK government has also welcomed the signing of what is Jersey's 14th tax information exchange agreement.

It has said it confirms the island’s commitment to good governance of tax issues.

So far, Jersey has signed agreements with Australia, Denmark, Faroe Isles, Finland, France, Germany, Greenland, Iceland, Ireland, Netherlands, Norway, Sweden, the UK and the United States.

The Island is also close to signing agreements with Italy and New Zealand, with whom negotiations have been completed, and work is under way to secure agreements with Canada and Spain

TIEAs play a vital role in HMRC’s drive against offshore avoidance and evasion.

The Isle of Man has also agreed to make its tax transactions more transparent.

The Agreements will enter into force after Australia and Jersey have advised that they have completed their domestic requirements. Legislation for this purpose will be introduced into the Australian Parliament as soon as practicable.

GPG Opinion

Superannuation portability for Australia-New Zealand Talks

Australian Treasurer Wayne Swan is to meet New Zealand Finance Minister Bill English to discuss portability or retirement savings between Australia and New Zealand which could unlock billions in retirement savings.

Finance Minister English said: “ Retirement Savings portability is part of the wider Single Economic Market work program which will reduce impediments to trade and the free movement of people between our two countries”.

The move would allow Australians and New Zealanders to consolidate their financial affairs in the country in which they choose to live. It is understood that the arrangements would apply to retirement savings held in New Zealand Kiwisaver accounts and certain Australian complying superannuation funds. Retirement savings from Australia could be transferred only into Kiwisaver accounts in New Zealand.

Australia’s Tax Office estimated last year that it had about A$13 Billion (NZ$16.6 Billion) in ‘lost accounts’ in the Australian superannuation system.

Mr. English said that it was believed a large amount of the lost accounts belonged to New Zealanders and the agreement would see those funds transferred.

GPG Opinion

Temporary Residents Superannuation Benefits Diminish as Withholding Taxes increase.

If you are a temporary Australian resident making Superannuation contributions while you are in Australia you need to re-think your strategies.

Among the recent changes to Superannuation in the 2009 Australian Federal Budget was a sting for temporary residents.

The new provisions largely remove any incentive for temporary residents to make superannuation contributions while they are working here.

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