I hope people are paying attention to matters more important than Bristol Palin's baby. Obama's Tax hikes for corporations are driving some companies to relocate their corporate headquarters overseas in favor of tax systems like Ireland and Switzerland that encourage growth and are corporation-friendly. I wonder if the Swiss Gov is going to tell exec's of these companies they can't fly their private jets for business purposes..


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RPT-FEATURE-Corporate oil booms in low-tax Switzerland
Thu Mar 12, 2009 9:04am EDT

* Companies seek Swiss domiciles despite tax row

* U.S. political climate may be helping

* Appeal as corporate location may outlast offshore dispute



By Sam Cage

ZUG, Switzerland, March 12 (Reuters) - The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.

Yet a wave of energy companies has in the last few months announced plans to move to Switzerland -- mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama's tax-seeking administration.

In a country with scant crude oil production of its own, the virtual energy boom has changed the canton or state of Zug, about 30 minutes' drive from Zurich, beyond all recognition. Its economy was based on farming until it slashed tax rates to attract commerce after World War Two.

It still has a chocolate-box old town with views over a lake to the high Alps, but is now surrounded by gleaming corporate offices -- including commodity trader Glencore and oil refiner Petroplus -- shopping malls and housing developments.

Local authorities say about 13 percent of full-time jobs in Zug canton are in the raw materials sector.

Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.

"Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate," Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. "As a result, the redomestication will improve our ability to maintain a competitive worldwide effective corporate tax rate."

Guido Jud, head of Zug's tax office, said about 1,200 companies had set up shop there in 2008 -- in line with the long-term average, though it is difficult to assess how many of those are foreign companies until they file tax returns.

Swiss cantons are free to set their own tax rates. For example in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland. That compares with an average global corporate tax rate of 25.9 percent, according to consultancy KPMG.

"One trend that we see is that particularly Bermuda-based companies are now moving to Switzerland," said Martin Frey, a partner at law company Baker & McKenzie. "That may only partly be obviously for tax reasons, but also for security reasons and the fact that the Obama administration may go after them."


CORPORATE APPEAL

The moves come as the Alpine country is under pressure to stop providing a haven to rich individuals who have been illegally dodging taxes: the U.S. political climate could be contributing to the corporate relocations as authorities seek to crack down on tax avoidance and boost their own revenues.

A bill introduced in the U.S. Congress in March targeting "offshore tax dodges" by individuals and companies names Switzerland among tax havens for evaders.

Offshore tax abuses cost the U.S. Treasury an estimated $30-60 billion in lost revenues from corporation tax, plus $40-70 billion from individuals, according to the office of Senator Carl Levin, who is sponsoring the bill.

Switzerland holds around $2 trillion of estimated global undeclared assets, according to the Boston Consulting Group. Revenue generated from this could be squeezed as a U.S. probe of its biggest bank UBS dilutes banking secrecy.

Yet analysts say the Swiss, whose GDP in 2008 was about 530 billion Swiss francs ($460 billion) according to the International Monetary Fund, are less likely to meet opposition to the low-tax regimes that draw foreign companies: these are deemed less harmful tax avoidance, rather than evasion.

"They are still making some money by having lower taxes on companies," said Lee Sheppard, contributing editor to Tax Notes, a tax journal based in Washington DC.

"But they're not ever going to be making the amount that other governments are annoyed about losing."

Analysts note that because Switzerland has its own tax treaty with the United States, blacklisting it at a corporate or individual level could cause unproductive diplomatic incidents.

Low-tax jurisdictions like Bermuda or the Cayman Islands look more vulnerable because they have less diplomatic clout, which is prompting some companies to head for Switzerland.

The European Commission, the European Union's executive body, has said the tax regimes in cantons like Zug, Schwyz and Obwalden are a form of state aid: it wants Switzerland to end favourable treatment of foreign-earned profits.

Switzerland, which is not a member of the EU, denies the cantons' special status violates its free trade deal with the bloc and rejects negotiations with Brussels on fiscal matters.

But it has pledged to consider some other company taxation regulations the EU has objected to, such as the status of foreign companies, aiming to ensure these go beyond thinly staffed headquarters to invest and create jobs in Switzerland.



CONTINUING TREND

Baker & McKenzie's Frey thinks more companies will shift to Switzerland, and Zug's Jud also highlighted the country's neutrality and reliability as an attraction to energy companies who do business in less stable countries.

"We are not reckoning on an unusually strong boom, but a continual and sustainable growth on the scale of the last few years and decades," Jud said.

Companies say Switzerland's attractiveness as a corporate location goes beyond tax to include easy and efficient transport, a high quality of life high and well-trained staff.

In the current climate, the attractions for the companies that move clearly outweigh one drawback: by making the switch they potentially sacrifice inclusion in stock market indexes such as the closely watched benchmark Standard & Poor's 500.

"In the past and most recently with Transocean, Standard & Poor's has ruled that the process of redomesticating to Switzerland renders a company 'ineligible for continued inclusion' in the S&P 500," said Macquarie Research analyst Angie Sedita in a note.

In buoyant times, inclusion in such indexes has offered access to equity capital. But the S&P 500 has fallen more than 50 percent since October. (Additional reporting by Braden Reddall in Houston; Editing by Sara Ledwith) ($1=1.158 Swiss Franc)



full article:http://www.reuters.com/article/rbssEnergyNews/idUSL312427120090312?feedType=RSS&feedName=rbssEnergyNews&rpc=22

The real reason corporations are moving their headquarters to places like Sweeden and Switzerland aren't because they pay lower taxes. The United States has the lowest corporate tax rate (32.5% for those producing over $10 million in gross revenue) than any industrialized country in the world. Sweeden comes in at 112 and Switzerland at 118 with 48.2 and 49.8. However, if corporations take advantage of Switzerlands' 'no cash' rule, they can opt to pay no taxes at all so the Swiss government loses millions in tax revenues. The system is almost identical in Sweeden. The reason that CEOs and business leaders are going to Sweeden or Switzerland isn't for lower tax rates, it's because of their "blind eye tax system" which says you don't have to report any earnings you make outside the country. So the rich do this to avoid paying any taxes at all, just like their companies do. So the rich go overseas so they can hide their large, stockpiled wealth from the United States government (which is illegal.)

I was about to say that Obama isn't the cause for Corporations moving to Switzerland as much of Europe has a higher tax system over there. I know I am German

lowest corporate tax rate?? someone's smoking really good bud.. we have the highest corp. tax rate second only to Japan!! and that's before Obama gets his tax plan in place..

yes europe is highly progressive on it's personal income taxes but Ireland has slashed corp tax rates and companies are beating down their celtic door!

is that a clue??

Austria 25%
Belgium 33.99%
Canada 19.5%
Denmark 25%
Finland 26%
France 33.33%
Germany 30-33%
Greece 25%
Ireland 12.5%
Israel 26%
Italy 31.4%
Japan 30%
Luxemburg 21%
Netherlands 20-25
Norway 28%
Spain 30%
Sweden 26.3%
U.K. 28%
U.S.A. 15-35%


Yes as a German I payed up to 45% on individual taxes, which I don't have a chart on it now, but can post one up if you like! So I would say we are the top 5 in the world that pays alot of taxes as an individual, but concerning corporation taxes, well I never understood the US system. I guess it depends on how much you earn owning a business. As the chart indicates anywhere from 15 to 35%.

Germany pays 30 to 33% solid. I wish it was at 15% that would be great!

You are right about Ireland though. They are the lowest in the world.

I think alot of corporations around the world take advantage of the Switzerland Bank System. You get high interest gains for saving money there and you don't have to use your real name when opening a account. A code name suffices in many cases with confidential information that the Bank cannot share with any government. Sounds like a winner for those who are corrupted doesn't it.

I think there are countries protesting on this as many corrupt politicians have stored their money in those banks. I know the Nigerian dictator did and even Saddam Hussein at one time.

If anything American Businesses should go to Ireland and invest there. That low tax rate sounds like a winner for a corporation

Country / Corporate income tax rate - 2008
Japan – 39.5
United States – 39.3
France – 34.4
Belgium – 34.0
Canada – 33.5
Luxembourg – 30.4
Germany – 30.2
Australia – 30.0
New Zealand – 30.0
Spain – 30.0
Mexico – 28.0
Norway – 28.0
Sweden – 28.0
United Kingdom – 28.0
Italy – 27.5
Korea – 27.5
Portugal – 26.5
Finland – 26.0
Netherlands – 25.5
Austria – 25.0
Denmark – 25.0
Greece – 25.0
Switzerland – 21.2
Czech Republic – 21.0
Hungary – 20.0
Turkey – 20.0
Poland – 19.0
Slovak Republic – 19.0
Iceland – 15.0
Ireland – 12.5


Here is another poll, which is the one you probably looked at. It is different then the first one I posted. This is a chart for corporate taxes. Here it doesn't show for the US 15 - 35%, but instead 39.3%.

Wow I feel sorry for you Americans if this is true

this is the corp tax rate. the one in your first post looks like the personal income income tax rates, federal/national. and the 15-35% for US seems a little undestated if that's the case.

at any rate. the point is that this demonstrates that the way to foster growth in an economy is to encourage businesses to do business.. seems simply enough but the current administration seems to think the best way to encourage growth in the economy is to tax the hell out of businesses big, small and everywhere in between and then turn around and promise as many voters as many of their wildest dreams as possible. All of which ends up growing, not the economy, but the number of people happily dependent of government for increasingly greater number of aspects of their lives..

call me crazy..

the first one was also stated as a corporate tax rate. Here is the link http://www.worldwide-tax.com/

Yes taxing more during hard times is rough. I agree, yet many say that the biggest corporations under the Bush Administration were relieved in paying taxes like the oil barrons and this had hurted the economy for the money was needed for programs.

How true this is people will argue all day about it. I am sure of it.

Therefore the people who believe it to be true agree that corporations should pay taxes if not a little higher then individual man who owns no business.

I am for equal taxes for everyone except for those who earn less then 20,000 dollars a year. They can barely make ends meet(especially those who live in a city) and need programs to help them get better jobs to be able to pay taxes for programs that REALLY work for the people.

If it will be done well we shall see under the Obama administration and the Congress who have a hard time working together.

i say screw the taxes, why not just print up the money like we do now, only let our government do it instead of the federal reserve, then we can just pay for these programs without having to ask the american people for their money? let ceasre have his own money and us have ours.

Just curious, do people in other countries whine about paying taxes? AGain just curious, not looking to start a war here.

I paid alot of taxes in my country, yet I am not complaining for I am seeing that the money is put back to the public effectively. The taxes went down over the last 10 years after rebuilding East Germany so the people are satisfied.

We have great highways, sewage systems, water

We have quality products

We have universal health care as of a good education system

and we are but a tiny country!

Do people complain? Well yes they do everywhere in the world!

but overall our prime minister (a female by the way) is doing a splendid job for the people and of course oppossing parties will say the opposite because they want to lead the country, but what is new about that! nothing! It will always happen.

Some Germans are upset that we are now the 4th richest country in the world and not third anymore, but it is no biggie in the end.


but I can imagine that certain topics are sensitive for every country, but in the end I can understand that we all want to live a peaceful and good life.

which country are you from?

I am German

In this country, for instance, no one "whines" about that either.

What a load of BS. it is to suggest that US corporations aren't going there because of the taxes.

No, they just going there for the weather!

Whatever the tax law is, it is but an actual real tax rate that matters. I see this debate as an usual government-education rooted situation, where an economic discussion goes on about nominal terms, which do not make any difference whatsoever.

The real tax rate there is lower, because corporations do not pay taxes on an income generated worldwide.

Now, to say that to move out of jurisdiction, to escape the punitive effects of that said jurisdiction gone insane, is illegal? Hello? How do you define "legal"?

The Alp Mountains are truly beautiful to look at

Im tired of these huge companies getting all those tax breaks anyway. I feel if they send jobs over seas...then they should be banned from ever bringing that company back into the United States.
There should be a big cost for those companies to bring back their goods for resale here.

Kat

there you go! that's a real constructive way of thinking! that's the wat to encourage business growth in the US..

this mentality is the product of this constant class-warmongering that's just got to stop.. your employer is not your sworn enemy!!

Like our personal taxes, however, Corporate taxes are stepped and 39 only applies to the money between 100k and 335k. above 335k up to 10mil you pay around 35%. our highest earners pay 35%.