BNDES wants more!

Person dumping money into a toilet bowl --- Image by © Rubberball/Corbis

2008 is a year to be remembered for many reasons but I’m not going to go over the already known ones. Very few people remember that it was the first massive debt capitalization BNDES (Brazilian Development Bank) received from FI-FGTS (Workers Benefits Investment Fund) and today that debt accounts for 15% (R$4.7 billions) of the Brazilians workers money. It seems that’s just not enough since the Treasury can’t give more money without impacting fiscal reform so the government is planning a new transaction of R$10 billions of everybody’s sweat to solve the problem.

Just to play a little with numbers, if that’s really happening (is it??) the total debt will account for almost 47% of the total FI-FGTS fund equity. That’s unforgivable.

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A little push… to the wrong direction?

Continuing the subject of the last post, our dear Governor of Maranhao Flavio Dino, appealed to the Supreme Court in a direct action of unconstitutionality due to the failure of Congress to consider the theme that is provided in the Constitution. Dino filed an injunction asking the Supreme Court to fix the period of 180 days for the Parliament to regulate the Fortunes tax. Otherwise, the Court would become responsible for pointing out what rules should apply from 2016.
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Crossroads

There are many difficulties for the government to pass a federal tax on inheritances and gifts. You could say that they range from political obstacles with a weakened government to legal issues, as the competence of these taxes is at the state level, a constitutional amendment to allow the maneuver would be needed. And that’s where the politics mixes with the technique, as to pass an constitutional amendment are needed 3/5 of votes in the House of Representatives in two shifts, and 60% of the votes in the Senate, also in two shifts, not to mention the regiment periods and previous analyses by House and Senate special commissions, as the procedure would take too long for a strong government, in a weakened government that’s practically born dead. Surprisingly other proposals with simpler approval procedures (did not say easy, just simpler) didn’t make so much noise in the media and the latest news we heard was that the government was trying to follow the hardest path, which is not a surprise since the way this government has been following since the beginning of the first term.

Talking about the other proposals the first that comes to mind is taxation of large fortunes and the second is the return of taxation on dividends. Starting at the end, taxing dividends would be economic suicide at the best time if one really wanted to commit suicide. The impact would be tremendous in investments that are already extremely depressed and business confidence.
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BVI Updates FATCA Reporting Guidance

The British Virgin Islands has published revised guidance notes on the international tax compliance requirements under its intergovernmental agreements with the United States and the United Kingdom.

The original version, dating back to July 2014, has been updated to reflect subsequent developments. Attention is drawn to the revised deadline of June 30, 2015, (extended from May, 31, 2015) for financial institutions to report with respect to the 2014 reporting year under the US Foreign Account Tax Compliance Act (FATCA).
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How much Brazilians can take?

Brazilians are fed up with all the corruption scandals that there’s being revealed during the last years and it culminated in a multi-billion dollar Petrobras scandal involving some of the biggest construction companies in Brazil, threatening to undermine an already vulnerable economy. One would say it is the biggest scandal in the country’s history but there are already a new contender for top #1. Just last week another multi-billion dollar scandal was revealed, this one occurring in a government agency (CARF) responsible for fines levied by Brazil’s Internal Revenue Service.
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No Discount

Russia is following the steps of other countries like the US and Italy on the way of approving a law to allow taxpayers to regularize previously undeclared assets held offshore.

The Russian Government said on March 27, 2015, that the law, “On the Voluntary Declaration of Property and Bank Accounts (Deposits) by Individuals,” will allow taxpayers to repatriate assets taken out of the country in violation of tax, currency, and/or customs laws with a waiver on penalties.

The Government has said that information received will be treated as confidential, and an amnesty will be provided for criminal or administrative offenses committed.

The main goal is to retrieve taxes that were unpaid so as it happened in the US and Italy the Russian government will not press criminal charges on those who volunteer but will charge in full taxes, penalties and interest.
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Guilty Plea

Federal prosecutors in the United States have obtained another guilty plea in their continuing crackdown on Swiss banks and financial services that helped Americans cheat on their taxes.

The guilty plea by Swiss former asset manager Peter Amrein in a federal court in New York comes amid a criminal investigation that US authorities have said still includes 14 Swiss banks, notably the second-largest, Credit Suisse Group.

The institutions where he worked were not identified in the indictment, which accused him of conspiring with a Zurich-based Swiss lawyer, Edgar Paltzer, in setting up hidden accounts at Wegelin and at least four other Swiss banks that were not identified, some using names of made-up foundations in Liechtenstein. Wegelin, which was Switzerland’s oldest private bank, announced its closure after agreeing to pay $74 million (CHF71.8 million) and pleading guilty in 2013 to helping wealthy American clients avoid paying taxes.
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Amnesty to whom?

In a deal with U.S. prosecutors, Swiss private bank BSI SA agreed today to pay a $211 million penalty and hand over leads on more than 3,000 accounts with U.S. ties, as well as the actual names of an undisclosed, but presumably much smaller group of U.S. account owners.

The “non-prosecution agreement,” which allows BSI to avoid criminal charges in the U.S., is the first to be sealed under a controversial amnesty program the U.S. Department of Justice announced in August 2013 for all Swiss banks, except the 14 already under criminal investigation at that time.
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