Leak shows scale of Luxembourg’s sweet tax deals

Leak shows scale of Luxembourg’s sweet tax deals
Updated 10 November 2014

Leak shows scale of Luxembourg’s sweet tax deals

Leak shows scale of Luxembourg’s sweet tax deals

BRUSSELS: Luxembourg, one of the world’s wealthiest nations, came under fire Thursday after leaked documents allegedly revealed the extent to which it has attracted multinationals and the super-rich with sweet tax deals, depriving other countries of valuable tax revenue.
The government defended itself saying it had done nothing illegal in its deals with corporations like Pepsi and IKEA. But other European nations, including neighbor France, criticized the tiny country’s tax practices — particularly when they have to impose austerity cuts on their citizens to make ends meet.
“Tax ‘optimization’ — companies that legally find solutions to pay little or no taxes — that is no longer acceptable for any country,” said French Finance Minister Michel Sapin. “I wish that in a few years we never have to talk about something like this again.”
Luxembourg’s other neighbors, Belgium and Germany, and the Netherlands were equally quick to condemn the practice, which gained center stage on Thursday when a group of investigative reporters produced documents allegedly showing that scores of major multinational companies have won such advantageous deals.
The practice can include offering low corporate tax rates to companies that have their European Union headquarters in Luxembourg, a nation of 520,000 that otherwise doesn’t have a big economy.
But Luxembourg is not alone in being aggressively competitive in attracting companies. Ireland and the Netherlands itself are being investigated by the European Union executive for their tax practices. The issue has come to the fore since the financial crisis saw governments scrounge for money to refill their coffers — and tolerance for such practices waned.
Luxembourg Finance Minister Pierre Gramegna insisted his country had not broken any law. “What has happened here is totally legal,” he said.
He said Luxembourg would cooperate with others to make sure tax standards are better coordinated on a global level as soon as possible. “The moment the rules change globally, it is evident that Luxembourg will apply them quickly,” Gramegna said.
The International Consortium of Investigative Journalists said the practice in Luxembourg was widespread after it pored through some 28,000 pages of confidential documents covering some 340 businesses that could be linked to the Grand Duchy for special tax deals.
European Parliament President Martin Schulz said that what was most worrying was that nations could simply come out and say it was all perfectly legal.
“This reality means that we need to urge the (EU) member states to work with us to end systematic tax evasion practices in Europe, be it in Luxemburg or any other country,” he said.
The EU has already broadened its crackdown on multinationals’ tax avoidance schemes, with a probe against Amazon’s practices launched last month. The ICIJ allegations now add many more high-profile names, including FedEx, Pepsi and IKEA.
The European Commission said that it was specifically targeting any deal that would sidestep market conditions and give an unfair edge to one company over others.
At a time of stringent austerity cuts, the tax advantages for multinationals and the wealthy are seen as evidence of an unfair society punishing the poor and rewarding the rich.
At a protest march of 100,000 workers against further austerity in Brussels, the issue of Luxembourg’s tax deals was raised time and again.
Socialist trade union leader Rudy De Leeuw said it amounted to “stealing from the common man while at the same time capitalists take their money to Luxembourg. This is unacceptable.”
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Raf Casert can be followed on Twitter at http://www.twitter.com/rcasert


Abu Dhabi’s ADQ in talks to invest $500m in India’s Flipkart

Abu Dhabi’s ADQ in talks to invest $500m in India’s Flipkart
Updated 47 min 41 sec ago

Abu Dhabi’s ADQ in talks to invest $500m in India’s Flipkart

Abu Dhabi’s ADQ in talks to invest $500m in India’s Flipkart
  • ADQ is discussing a $35 billion to $40 billion fundraising in Flipkart that would come ahead of a planned IPO that could take place as soon as 2022

RIYADH: Abu Dhabi sovereign fund ADQ is in talks to invest about $500 million in India’s Flipkart, as the Walmart Inc.-backed e-commerce firm raises funds ahead of a potential initial public offering next year, Bloomberg reported citing people familiar with the matter.
ADQ is discussing a $35 billion to $40 billion fundraising in Flipkart that would come ahead of a planned IPO that could take place as soon as 2022, the people said, asking not to be identified for information confidentiality.
The Indian e-commerce firm is seeking to raise at least $3 billion.
ADQ paid about $800 million for  a 45 percent stake in Louis Dreyfus Company (LDC) last year. The acquisitive investment group also bought the Egyptian pharmaceutical company “Amon” from the Canadian company (Bausch Health) for $740 million.

 


Tesla to accept bitcoin again when greener

Tesla to accept bitcoin again when greener
Updated 14 June 2021

Tesla to accept bitcoin again when greener

Tesla to accept bitcoin again when greener
  • Bitcoin are produced by powerful computers that have to solve equations and consume huge amounts of electricity in the process

NEW YORK: Elon Musk, CEO of electric vehicle maker Tesla, said on Sunday that the US company will accept bitcoin payments again when the virtual currency is greener.
The American manufacturer caused a sensation in February when it announced that customers could pay in cryptocurrency, an option that became possible at the end of March.
But then Musk changed his mind, indicating that bitcoin were no longer accepted — in the interest of protecting the environment.
“When there’s confirmation of reasonable (~50 percent) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the billionaire wrote on Twitter Sunday.
Bitcoin are produced by powerful computers that have to solve equations and consume huge amounts of electricity in the process.
The science journal Nature recently published a study showing that China’s bitcoin mines, which power nearly 80 percent of the world’s cryptocurrency trade and run in part from coal-fired power plants, risk jeopardizing the country’s climate goals.
Musk on Sunday reacted to an article raising the possibility that with his tweets, which regularly move the value of bitcoin in one direction or another, he is manipulating market prices for the benefit of his business.
“This is inaccurate,” he said. “Tesla only sold ~10 percent of holdings to confirm BTC could be liquidated easily without moving market.
The US automaker announced in early February that it had invested $ 1.5 billion of its ample cash in bitcoin and has since sold part of it.


Dubai’s yachts offer socially-distanced luxury

Dubai’s yachts offer socially-distanced luxury
Updated 14 June 2021

Dubai’s yachts offer socially-distanced luxury

Dubai’s yachts offer socially-distanced luxury
  • Charter companies said they have seen an increased interest in yachting after coronavirus measures eased, especially among those who want to spend time with friends and family

DUBAI: Dubai earned a reputation for delivering luxury for those with cash to splash years ago, but amid the Covid-19 pandemic, a new mode of travel has become popular — yachts.
“It’s more private, you’re with only family and friends, and it’s the ideal outing during a pandemic,” said Nada Naeem, a 36-year-old Saudi citizen living in Dubai.
Dozens of white yachts are seen every day zipping through the emirate’s bays, canals and islands, while others are docked along the coast in Gulf waters overlooking the skyline of high-rise towers.
“You feel like you can breathe,” Naeem said, adding that she had not left Dubai since the pandemic began last year. “It’s like you’ve traveled.”
Unlike so many parts of the world, Dubai opened its doors wide open to tourists just a few months after the coronavirus pandemic took hold last year.
Life in the Gulf emirate — one of the first destinations to welcome visitors again last July — returned to largely normal, with restaurants and hotels up and running and beaches open to the public.
The UAE, made up of seven emirates including Dubai, launched an energetic vaccination drive with some of the highest inoculation rates worldwide, and continues to enforce strict rules on wearing masks and social distancing.
But some are fearful of overseas travel, and wary of crowded places where the risk of catching COVID-19 is higher.
For those who can afford the price tag, yachts are seen as a safer bet.
“When they eased the lockdown ... people preferred something secure and safe with regulations,” said Mohammed Al-Sayyed, manager of Royal Star Yachts charter company.
“We are providing them with the proper customer service, following all the rules, sanitizing the yacht.”
For now, yachts are allowed to operate at 70 percent capacity.
The company has a fleet that includes a 141-foot (42-meter) yacht able to host 80 passengers at full capacity — if you can afford the $4,900 price for a three-hour cruise.
Charter companies said they have seen an increased interest in yachting after coronavirus measures eased, especially among those who want to spend time with friends and family.
“People want to do sightseeing, cruising,” said Sayyed, who has been in the yacht industry for eight years. “They want to relax.”
Cheaper yachts to hire include the company’s 90-foot “Big Daddy” — capable of normally carrying 65 people, at $1,225 for three hours — down to smaller boats.
Some in Dubai said that when the price was split between a group, the cost was not as steep as it seemed at first.
“It can actually be more affordable than an all-inclusive brunch at a restaurant,” said Naeem.
And while some groups have been busted by authorities flouting the rules and slapped with hefty fines, most excursions run smoothly.
Sayyed insisted his company follows all the rules and that even on the most luxurious “party yachts,” there are COVID-19 regulations still in place, including the need for passengers to socially distance from each other and wear masks.
Dubai, known for its skyscrapers and mega-projects, boasts the most diverse economy in the oil-reliant Gulf region and has built a reputation as a financial, commercial and tourism hub.
Tourism, which drew some 16 million visitors a year before the coronavirus hit, took a severe downturn in the first few months of the pandemic.
But a flood of arrivals since the beginning of the year has regenerated the industry, and helped many business activities recover.
Other yacht charter companies report an increase in demand for rentals in recent months.
And being out at sea doesn’t mean the guests must skimp on takeaway food or drinks. Jet skis and speed boats are on standby — for an extra fee — to take orders and deliver groceries from shore to ship.
“To go on a boat is as simple as being outdoors and being away from strangers, gathering with only those you trust,” said Palestinian Jeelan Herz, who has lived in the UAE for more than 30 years.
“It’s also something you can enjoy safely with children — go to the middle of the ocean, take part in water activities and take a nice dip.”


Kuwait’s economy contracted by 9.9% in 2020

Kuwait’s economy contracted by 9.9% in 2020
Updated 14 June 2021

Kuwait’s economy contracted by 9.9% in 2020

Kuwait’s economy contracted by 9.9% in 2020
DUBAI: Kuwait’s gross domestic product contracted 9.9 percent in 2020, compared with growth of 0.4 percent in 2019, mainly because of last year’s sharp drop in oil prices, state news agency KUNA reported on Sunday.
Kuwait, which makes half its revenues from oil, had its finances squeezed by an oil price crash and by the COVID-19 pandemic, while a draft law that would allow it to tap international debt has stalled amid disagreement between successive parliaments and cabinets.
The International Monetary Fund estimated in April that Kuwait’s GDP contracted 8 percent in 2020.
KUNA based its report on Central Bank of Kuwait’s governor, Mohammad Al-Hashel, who cited preliminary estimates and statistics and said the institution used all the tools available to it to blunt the pandemic’s impact.
He said preliminary estimates and statistics also showed the headline inflation rate increased to about 2.1 percent in 2020 from about 1.1 percent in 2019.
Kuwait’s population, which mostly comprises expatriate workers and their families, declined by 2.2 percent in 2020 after growing 3.3 percent in 2019.
Sources told Reuters in April that Kuwait has reached an agreement with state-owned Kuwait Petroleum Corporation under which the company will pay the government billions in accrued dividends, part of government efforts to cover the deficit.

Oil holds near multi-year highs amid demand recovery

Oil holds near multi-year highs amid demand recovery
Updated 14 June 2021

Oil holds near multi-year highs amid demand recovery

Oil holds near multi-year highs amid demand recovery
  • The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020

TOKYO: Oil prices held near multi-year highs on Monday, underpinned by an improved outlook for demand as increased COVID-19 vaccinations help lift travel curbs.
Brent crude was up 14 cents, or 0.2 percent, at $72.83 by 0123 GMT. It rose 1.1 percent last week and hit the highest since May 2019 of $73.09 on Friday.
US West Texas Intermediate was also up 14 cents, or 0.2 percent, at $71.05 a barrel, after reaching the highest since October 2018 at $71.24 on Friday and rising 1.9 percent on the week.
Vehicle traffic is returning to pre-pandemic levels in North America and much of Europe and more planes are in the air as lockdowns and other restrictions are being eased, driving three weeks of gains for the oil benchmarks.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, need to increase output to meet recovering demand, the International Energy Agency (IEA) said in its monthly report on Friday.
The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020.
“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the IEA said.
Goldman Sachs said last week it expects Brent to rise to $80 per barrel this summer as the rollout of inoculations boosts economic activity around the world.
US oil rigs rose by six to 365, the highest since April 2020, energy services company Baker Hughes Co. said in its weekly report.
It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.