Magazine article New Internationalist

The Dictionary of Deceit /Dísi:t/

Magazine article New Internationalist

The Dictionary of Deceit /Dísi:t/

Article excerpt

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The arcane language associated with the offshore world can seem daunting to newcomers. This is no coincidence - those involved in high stakes tax avoidance use this specialized language to disguise and normalize what in essence amounts to the dismantling of the social contract for the benefit of the one per cent. The following definitions should help you find your bearings.

High Net Worth Individuals (HNWIs) /.../ adj. adj. adj. noun

1 These folks (with assets of a million bucks plus) swing a lot of weight with accountants and tax planners. Most major banks have separate units dedicated entirely to 'servicing' them.

2 Together they have caused an estimated 10 per cent of global household wealth to mysteriously disappear from HNWIs' taxable bottom line.

3 But, hey presto, when they want to blow it on that big wedding or a new plunge pool for the villa in Provence, it's magically still there.

Neutral Taxation /.../ adj. noun

1 The idea that taxes should have the least possible effect on the operation of that holiest of holies: the market. Although market 'outcomes' leave some wealthy and others starving, destroy the environment or reward those who make weapons and war, it is deemed 'inefficient' for taxes to 'distort' these results.

2 In this world, taxation should be kept as low as possible - zero is optimal - so as not to be an excessive weight on the economy and alter economic decision-making.

Double Irish /.../ adj.noun

1 In a double Irish, corporations 'book' income and profits through two separate Irish incorporated companies, one a tax resident of Ireland and the other controlled from, and thus a tax resident of, Bermuda or the Cayman Islands.

2 The second company is assigned lucrative intellectual property rights by the parent company, and then rents them to the first at a high rate. Much of the money that passes through the first company is then passed to the second, where it is subject to no corporate tax, while what's left is taxed at the low Irish rate of 12.5 per cent.

3 This tax dodge is a favourite with tech giants like Apple, Microsoft, Google and Yahoo, as well as Big Pharma monopolies. If you're having trouble following this, please see MEGO.

My Eyes Glaze over (MEGo) /.../ poss. adj. noun verb prep.

1 Coined by US senator Carl Levin, MEGO refers to the complex, tedious language of tax law. For the general public, journalists and even tax scholars, the ins and outs of tax legislation and precedent are so impenetrably difficult that many throw up their hands in frustration.

2 But if you can afford to hire armies of accountants and specialists you can win the tax avoidance game by simply drowning your opponents in an avalanche of boring technical detail.

The Singapore Sling /.../ adj. noun phr.

1 A favourite of Australian mining giant BHP Billiton, the Singapore Sling involves shifting profits from a high-tax jurisdiction to a marketing subsidiary in Singapore. By selling commodities at low cost to a Singapore subsidiary, which then sells them on to end-users at market price, transnationals can claim that any profit is due to marketing rather than the value of the commodities themselves, and that profits should thus be taxed in low-tax Singapore. …

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