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2010 Your Money Articles... so far
Pete
Posted: Wednesday, July 7, 2010 4:50 PM
Joined: 01/12/2008
Posts: 52


So far in 2010 I have written about the following subjects.


Jan-10  Booze & Cash, the real alternative investment 

Feb-10  Currency considerations 

Mar-10 Instituting a financial plan 

Apr-10  Cost of Delaying your saving plan 

May-10 Tax Residency, is it really that bad? 

June-10  Domicile, Residence... What's the difference.


There are huge changes coming over the coming 18 months which will change international tax and banking forever, I will try and keep you all up to date with as many of these changes as possible, but if anyone has any questions or thoughts on how some of these changes will affect yacht crew please don't hesitate to jump in.


Pete
Posted: Wednesday, August 4, 2010 11:05 AM
Joined: 01/12/2008
Posts: 52


The July 2010 Article was about how the EU TAX SAVINGS DIRECTIVE AFFECTS YOU.

THE EUROPEAN UNION SAVINGS DIRECTIVE (EUSD) came into effect on July 1, 2005, with the objective that countries involved disclose to each other interest earned by residents of EU countries holding a bank account in their jurisdiction.

Some non-EU “offshore centers” also agreed to disclose information about interest earned by EU residents. But some jurisdictions feared this would affect their banking confidentiality, so a system of withholding tax was implemented to allow tax to be collected by the EU state without disclosing account holder details.

This agreement was set to last at least seven years. The account holder could choose to authorize disclosure. Certain individuals who also could prove they were exempt from taxation in their country of residence would avoid the withholding tax. This tax applies to bank deposit interest and is passed anonymously to the EU countries concerned.

Current rates of withholding tax on interest are 20 percent and will rise to 35 percent after July 1, 2011.
So why an update now? The financial crisis means governments are increasing efforts to collect more taxes and so they are increasing pressure on offshore centers for greater transparency regarding EU residents’ savings. We understand that as of July 1, 2011, the Isle of Man will begin full disclosure of interest earned to the EU states
“linked” to their account holders. It appears Jersey will withhold tax at 35 percent of interest earned, but it’s unclear for how long.

It’s unclear how the administration of these declarations will take place and how each bank will decide about to whom they will disclose details. They are keen to fulfill all their obligations, but they are also aware that yacht crew are in an unusual position. Some banks will use the citizenship of the client to decide the disclosure but only if the client has used the yacht as the residential address. If an actual address is given in the EU, this will supersede.
Full tax disclosure will not affect all crew, but those crew who are genuinely EU residents and hold an Isle of Man or Jersey bank account, full disclosure of interest may cause embarrassment with their local tax authorities.

If your account address is linked to a non-EU country, then this legislation does not affect you. If your account is linked to an EU address, check whether this address is truly your correct residential address (see May edition
of Dockwalk for more on residency). If you are resident in the EU country to which your account is linked, then you should declare your worldwide income to that country anyway.

Offshore International Insurance bonds and corporate structures are currently not affected by the EU Savings Tax Directive. The better you understand your own residency situation, the better prepared you are. If in doubt, consult your adviser or bank for guidance or their approach to disclosure.

 
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