Tax amnesty

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Tax amnesty is a limited-time opportunity for a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability (including interest and penalties) relating to a previous tax period or periods and without fear of criminal prosecution. It typically expires when some authority begins a tax investigation of the past-due tax. In some cases, legislation extending amnesty also imposes harsher penalties on those who are eligible for amnesty but do not take it.[1]

Instances[edit]

Australia[edit]

Australia launched tax amnesties in 2007 and 2009.[2]

Belgium[edit]

In 2004 the Belgian Parliament adopted a law allowing individuals subject to Belgian income tax to regularize the undeclared, or untaxed, assets they held before June 1, 2003.[3]

Germany[edit]

In 2004 Germany granted a tax amnesty in connection with tax evasion.[4]

Greece[edit]

On September 30, 2010, the Hellenic Parliament ratified a legislation pushed through by the Greek government in an effort to raise revenue, granting tax amnesty to millions of Greek citizens by paying just 55 percent of the outstanding debts.[5][6][7] In 2011, the European Commission requested Greece to modify its tax legislation as its tax amnesty was considered discriminatory and incompatible with European Union treaties.[8]

Italy[edit]

Italy introduced a tax amnesty in 2001 that came to be known as Scudo Fiscale (English: Tax Shield, which was extended in 2003.[9]

In 2009 the Italian tax amnesty yielded €80 billion, while the Bank of Italy estimated that Italian citizens held around €500bn in undeclared funds outside the country.[10]

Portugal[edit]

Portugal introduced tax amnesties in 2005 and 2010.[11]

Russia[edit]

In 2007, a Russian tax amnesty program collected $130 million in the first six months. The Russian program was not open to anyone previously convicted of tax crimes such as tax evasion.[12]

South Africa[edit]

In 2003 South Africa enacted the Exchange Control Amnesty And Amendment of Taxation Laws Act, a tax amnesty.[13]

Spain[edit]

In 2012 the Spanish Minister of Economy and Competitiveness Cristóbal Montoro announced a tax evasion amnesty for undeclared assets or those hidden in tax havens. Repatriation would be allowed by paying a 10 percent tax, with no criminal penalty.[14]

United States[edit]

In 2009, a federal U.S. tax amnesty was granted to more than 14,700 American taxpayers.[15]

Many U.S. states have had tax amnesties.[16] The City of Los Angeles collected $18.6 million in its 2009 tax amnesty program, claiming that the amount was $8.6 million more than was expected and that businesses saved $6.7 million in penalties.[17] The state of Louisiana brought in $450 million from its 2009 tax amnesty program, three times more than what was expected, according to Republican Governor Bobby Jindal.[18]

In a 2007 United States Senate bill that did not become law, a tax amnesty for illegal immigrants was proposed. The tax amnesty was supported by then-president George W. Bush and his Homeland Security Secretary Michael Chertoff.[19]

On June 26, 2012, IRS Commissioner Doug Shulman said the IRS offshore voluntary disclosure programs has so far collected more than $5 billion in back taxes, interest and penalties from 33,000 voluntary disclosures made under the first two programs.[20][21]

Further reading[edit]

References[edit]

  1. ^ The traps in amnesty for taxes
  2. ^ http://www.stepjournal.org/news/news/archive/2009/december/australia_launches_new_offshor.aspx?lang=en-gb
  3. ^ http://www.vandendijk-taxlaw.be/pdf/Tax%20Amnesty%20Falls%20Short%20of%20Expectations.pdf
  4. ^ http://www.mondaq.com/article.asp?articleid=24341
  5. ^ Daley, Suzanne (February 20, 2011). "Greece's Efforts to Limit Tax Evasion Have Little Success". The New York Times. 
  6. ^ http://www.ft.com/intl/cms/s/0/a85d7edc-ccd2-11df-a1eb-00144feab49a.html#axzz1qdpejkLX
  7. ^ http://newsletters.usdbriefs.com/2010/Tax/WTA/a101015_4.pdf
  8. ^ "EU Commission tells Greece to change tax amnesty". Reuters. February 16, 2011. 
  9. ^ http://www.safehaven.at/wordpress_cms/wp-content/uploads/2010/03/Helvea-Studie.pdf
  10. ^ http://www.ft.com/intl/cms/s/0/35dfa00a-efd9-11de-833d-00144feab49a.html#axzz1qdpejkLX
  11. ^ http://www.nordea.lu/Business+support/Wealth+Planning/Tax+News/1077802.html?newsid=8382b363-e8dd-4601-9463-a6f107c8e06b
  12. ^ http://www.tax-news.com/archive/story/Russian_Tax_Amnesty_Yields_130m_xxxx28465.html
  13. ^ http://www.bowman.co.za/LawArticles/Law-Article~id~712788941.asp
  14. ^ http://www.google.com/hostednews/ap/article/ALeqM5hnFSPUep6RURQ2ECN6RbXxxOcLHQ?docId=7d94f79512bd4f47a84a0f48cfd722b4
  15. ^ Browning, Lynnley (November 18, 2009). "14,700 Disclosed Offshore Accounts". The New York Times. 
  16. ^ State Tax Amnesty Programs
  17. ^ http://www.flickr.com/photos/37176081@N02/3878906053/
  18. ^ http://www.nola.com/business/index.ssf/2009/12/louisiana_tax_amnesty_program_3.html
  19. ^ Boston Globe: Kennedy, McCain try again on immigration. February 28, 2007.
  20. ^ "IRS Says Offshore Effort Tops $5 Billion, Announces New Details on the Voluntary Disclosure Program and Closing of Offshore Loophole". IRS website. US Internal Revenue Service. Retrieved 2012-06-29. 
  21. ^ David Parent: IRS Audits of Offshore Accounts Retrieved October 26, 2013