Do we need offshore if there is bitcoin?

Offshore scandals associated with leaks of data on customers of "tax havens", their accounts and assets, occur almost every year. One of the latest such scandals is the publication of the "Panama file", when from the servers of the Panama law firm Mossack Fonseca, unknown persons stole as a result of a hacker attack the largest database of thousands of offshore companies. In May last year, the International Consortium of Investigative Journalists (ICIJ) posted this data in free access. In addition to the names of firms, there are names of owners and beneficiaries of offshore firms and accounts, including well-known state and political figures.

Such leaks of information give a powerful impetus to the curtailment of offshore activities.

The locomotive of the movement for the liquidation of all kinds of "tax havens" and "legal shelters" was made by Washington. The beginning of the US fight against offshore companies can be dated in 2001. First, after the events of September 11, 2001, the fight against offshore companies, according to US officials, was part of the fight against the financing of international terrorism. Secondly, in 2001 the American power giant Enron collapsed. This was the largest corporate bankruptcy in the post-war history of America, as a result of which shareholders lost $ 74 billion. The investigation revealed that the corporation created 800 offshore companies, where it withdrew its funds, bringing the case to bankruptcy.

For more than a decade and a half, Washington has been trying, on the one hand, to close the most offensive off-shores, on the other hand, to return the profits and assets of American corporations from the offshore home. According to the most conservative estimates, because of the offshores, the American treasury loses at least $ 100 billion annually. Under pressure from Washington, Switzerland began to abandon its famous banking secrecy. With the arrival in 2010 of the White House, Barack Obama managed to adopt a very important law, known as the FATCA (Foreign Account Tax Compliance Act). This is the law on the taxation of foreign accounts, the main purpose of which is to prevent tax evasion by American citizens working and living in other countries. The law obliges banks and other financial institutions to provide information about their customers (data on account numbers and balances on them, as well as turnover on accounts) to the Internal Revenue Service (IRS). As a result, more than 77,000 banks from around the world transmit information about their customers to the US Internal Revenue Service. These customers began to disclose even Swiss banks, previously considered a safe haven for the finances of anonymous depositors. Participate in this program and banks of countries-offshore.

Places where you can save your capital without revealing your identity, is getting smaller.

Washington pushed to fight offshore and Europe. Since 2013, European countries, together with other OECD countries, have begun the development of the Common Reporting Standard (CRS). The standard is already in place, more than 100 jurisdictions currently participate in the CRS system, including some offshore jurisdictions. All of them become transparent for the tax authorities and financial supervisory authorities of the countries that signed the agreement on the CRS system. Yes, outside the system there are still about the same number of jurisdictions that do not want to "denude", but experts predict that traditional offshore zones will disappear very quickly.

However, one thing is alarming. Washington, which initiated the fight against offshore companies and provoked the OECD countries to create a CRS system, has not yet signed the relevant documents and has not accepted any obligations to other states to transfer data on accounts and other assets of foreigners in the territory of the United States. I suspect that I will not accept it in the future.

What is the picture emerging? Customers who are accustomed to exotic off-shores like Cyprus, Panama, the Virgin Islands or Liechtenstein will have to say goodbye to them. The options for such customers are only three.

The first is to return assets and capital home. Fortunately, many countries periodically arrange various "amnesties" (for example, they establish a preferential tax rate for returnable capital).

The second is to rush into the United States: after all, Washington, by sweeping offshore offshore all over the world, has left one global offshore company called USA.

The third is to try to go into the shadows called "Cryptocurrency".

We'll talk about the first two options separately. And now about whether the third option saves.

Cryptocurrency came into being from the strength of a dozen years ago. Today, according to experts, there are about 600 Cryptocurrencies in the world. The most famous of them is bitcoin (BTC). The advantage of most Cryptocurrencies is that when they are used, complete confidentiality of transactions (purchase and sale, lease, loan, unilateral transfer, etc.) is ensured. Operations are beyond the scope of financial regulators and tax services. Moreover, ensuring

What else to dream about? One can imagine that networks of bitcoins and other Cryptocurrencies are ideal tax havens and harassment by law enforcement (when, for example, Cryptocurrencies are used to buy drugs, weapons, etc.). For several years now, a professor at the University of Florida Omri Marian (Omri Marian) says that crypto-currencies are more reliable shelters than classic offshore ones.

In connection with the enactment of the FATCA law and the CRS system, the interest in cryptocurrencies from those who are accustomed to ordinary offshore companies has increased dramatically. Thus, the average price of the military-technical cooperation in 2014 was $ 310, in 2015 - 360, and in 2016 - $ 1,000. In early March 2017, the price of military-technical cooperation reached $ 1268 - it is more expensive than a troy ounce of gold (its price At the beginning of March, 1233 dollars)! The project bitcoin has the limiting value of the number of "coins", equal to 21 million. Now about 16 million have been created. Experts believe that if a massive transfer of funds from offshore starts, the prices for military-technical cooperation will grow exponentially. According to the same professor Omni Marian, the price of one "coin" of military technical cooperation can reach $ 3 million, then all coins (21 million units) will be pulled by 63 trillion. Bitcoin from the "microbe" (the total value of 16 million "coins" at the end of last year was estimated at 16 billion dollars) will turn into a "crypto-elephant"! Another supporter of cryptocurrency Trace Mayer believes that for a sharp rise in the rate of military technical cooperation it is enough to transfer only 1 percent of assets from offshore to this cryptocurrency. The maximum benefit will be the one who will do it before the others.

Author: Valentin Katasonov
Professor, Doctor of Economic Sciences
Source: http://www.fondsk.ru/news/2017/04/06/nuzhny-li-ofshory-esli-est-bitkoin-43782.html