Praetorian Trust

The Dutch government announced that it had investigated over 150 people in a joint operation with other European tax authorities to find out if VAT had been paid on purchases of luxury yachts. The Dutch announced that thru these investigations that it “earned” an additional 31 million euros in unpaid tax on over 1 billion dollars worth of yachts. ( see link)

Impressive work, even for the infamous investigator of Pink Panther fame?This sum of 31 million euros, equates to less than 0.03 per cent on the value of these luxury yachts. A super catch for the tax authorities who were clearly going after the big fish on this yacht outing. We wonder if the administrative cost of spearing this tax was as low as the return on going after these fraudulent VAT funds.

We have no problem with people paying the taxes on their income, capital gains, VAT or all the myriad taxes that governments deem to access on their citizens. Although we all dislike to do so we all pay taxes on the goods and services we purchase in the country of origin or wherever the tax is payable. However, as happens in every crisis, the rich, or those that the government or others deem as rich, are targeted for prospering during the better times. This is not just happening in China, with the number one on the Forbes 100 rich list, has mysteriously “disappeared” after being questioned by government officials, but also in the the so called capitalist countries like the UK. But we fear that this time, the final assault on the offshore industry has now begun, and this is the real fraud.

The UK, as we noted yesterday in our note, has announced that it will clamp down on the use of offshore accounts by citizens, and more than likely, begin to pressure the offshore centers to break their own laws and “exchange” information on account holders in various nation’s offshore centers. The big countries, England, France, Germany and others throughout Europe will us the financial crisis to batter down the gates of privacy that are key to the survival of the offshore centers around the world: from Bermuda to the Switzerland the hallowed ground of privacy are under assault. As in the case of the clampdown on civil liberties and privacy after the 9/11 attacks, the governments will again attack our personal privacy and rights during and after this financial meltdown.?

The funny thing about the tax man is that the big governments that he represents use the excuse of chasing “tax cheats” as a way to cover up their own regulatory mistakes that caused the financial crisis in the first place. Just as the Dutch authorities proved in the highly public “catch” of 31 million euro “VAT Fraud”, the assault on the offshore centers is just a smoke screen to cover up the huge mess these same authorities have made in regulating the financial system. These same regulators??the ones caught sleeping on the job of regulating the banks and financial institutions that are melting down, are chasing the legitimate businessmen and women who use legal means to minimize the taxes that they must pay to cover up the regulator’s mistakes.

The British Virgin Islands (BVI) has signed a Tax and Information Agreement (TIEA) and a double taxation avoidance agreement with the UK. 

The TIEA was signed in London on 29 October. It provides for an exchange of information on requests which relate either to a specific criminal or to a civil tax matter and which are under investigation. 

In addition the BVI and the UK have negotiated a declaration of intent for non-discriminatory tax treatment and a double taxation agreement covering taxes on income for pensioners, students and government employees.

Did greed get the better of Switzerlands biggest bank, and will the long term ramifications really topple the best banking secrecy we have?

Read article here, and comment below:

I thought I would like to share this article by Michael Lewis of Liar’s Poker fame from Portfolio.com.

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

The 500 Billion USD fiscal package announced by the Chinese government on Monday was still not enough to change market sentiment and global bourses are still in turmoil.

 

The markets are still undergoing a massive revaluation of asset values with no bottom in site. With all major commodities prices, inclusive of the metals and crude oil still on a downward spiral, one would think that the annoucements by ARAMCO and by BHP Billiton that they were both, respectively, curtailing production would indicate somekind of floor on commodities, but the market still seems to think otherwise.

 

Given the massive injections of funds into major infrastructure projects in China, and the subsequent necessity for increased imports of raw materials coupled with the cut back of supply in oil from the biggest OPEC member  and metals from the bellweather mining company it would seem that a bottom could be near for these commodities. Jim Rogers is betting on it and those interested in long term wealthcreation must think about including commodities as a major portion of their portfolios now.

 

Chinse demand will not and cannot replace the engine of growth which was the US consumer. However given the abundance of funds readily available in China to combate the effects of the shut down of the American market, the Chinese economy will continue to grow. 

 

Owning commodities now will help you secure your financial future in these turbulent times. And, direct, or indirect investments in the companies that will benefit from continued economic growth in China will also protect and grow your assets now and in the future.

In one year the MSCI all country index has lost what it took four years to accumulate. 

That’s a T for Trillion. The reality is, the index lost a bulk of this value in a matter of moments.

Either we should take the long view on our investments that we are still holding and enjoy the view from the lakeside beach or take our hits and get out before we get hit any harder. 

Another 20% drop in the global indexes is still not out of the question. Time to get out of the water and back to the safety of the shore and we can help you get back on your feet again.

It is going to be a long, cold, and dark winter for investors, so better re-adjust and re-work NOW. It is our job to help organize your assets to meet your long term goals and needs of your family. Give us a call and come see us in Zurich sometime this month or risk not only getting wet from the market losers crying more tears but losing all that you have gained over the years. Lets regroup and reassess to protect what you have and restructure to assure maximize both safety and returns in this new world order. 

Lets not forget: MSCI’s all-country world stock index has shed nearly 50% of its value since hitting an all time high- last year in November. The clock is ticking, and the relative calm of the past few days portends, to our way of thinking, more dark days. Prediction is not our business, but in the days ahead as the post American election euphoria wears off and the hang over of this massive credit crisis begins to pound the reality of the situation into politicians and policy makers of every stripe and nationality we see an opportunity to restructure your portfolio before the hedge funds and others jump out the safety exits that remain.

Vacheron Constantin the watchmaker to those of affluence with more than 253 years of tradition, has created a timepiece with a thumb-print of its own. Called Quai de l’lle the watch gives the potential owner the freedom to choose from seven customizable parts, from bezel to lugs.

Starting at EUR 25000 it is an investment most can afford, if one is looking for a personalized heirloom to hand down the line to his son.

Speak to our lifestyle agents at lifestyle@praetorian-trust.com or:

Visit: Vacheron-constantin.com