Asian Wealth Solutions Forum 2019 - Exclusive Insights - Michael Olesnicky - 2

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1. How did the EU initiatives on minimum tax impact private wealth structures?

Video transcript

1. How did the EU initiatives on minimum tax impact private wealth structures?

What we've seen is the EU was very concerned about tax competition, and so in order to prevent capital flying off to the no tax or low tax jurisdictions, the EU is now coming up with this concept of a minimum rate of taxation, and that is also what the OECD is pushing as part of its BEPS 2.0 initiative. So what that means is for the low tax jurisdictions that have just gone through this whole economic substance regulation, it's a two pronged attack because even if a client does comply with the economic substance rules and puts all their substance into the BBI or Guernsey or Jersey, the reality is that additional tax will still be imposed by the EU and OECD countries with which that company dues. And so therefore it's a double pronged attack on the tax havens, the off-shore financial jurisdictions, because suddenly the tax benefit of being able to operate in those jurisdictions is going to dissipate.

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