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Money matters: New EU tax laws could leave expats high and dry
Graham Macdonald
MBMG International Ltd.
The 15 EU member states have issued a new tax directive which
could have dire consequences on many expats’ offshore saving and investments.
The 15 EU member states agreed in June to impose tougher
rules on their overseas tax havens following six years of intense negotiations.
From January 1, 2005, 12 of the EU’s 15 member states will exchange
information about investments and savings they hold from residents of other EU
states.
Belgium, Luxembourg and Austria have been allowed a
transition period in which the countries do not need to exchange information
about their bank accounts. Instead, they can apply a withholding tax and protect
investor confidentiality.
But the confidentiality privilege comes at a price as the
three countries are obliged to take a 15% tax charge from their EU customer’s
gains, but the rate will later increase to 35%.
As an example, banks in Luxembourg and Switzerland will
withhold 15% of an account’s gains and send 75% of the amount to tax coffers
in the homeland of the account holder.
However, the three countries aren’t too unhappy with this
as the EU has forced non-EU Switzerland to do exactly the same to their EU
customers with bank accounts in Swiss banks. This means that all interest income
will be declared to a person’s home country’s tax authorities.
“In my opinion this is how the situation will remain for
many years to come. It doesn’t matter that the transition period only runs to
2011 as the three countries will only reveal their customers’ identity if
Switzerland does the same. And who can imagine that?” asks a Luxembourg-based
investment adviser who prefers to remain anonymous. “It’s a very touchy
political question and no one wants to stick his or her neck out.”
For haven’s sake
The UK and Netherlands have pledged not only to implement the
new savings tax directive in their own countries, but also apply it in their
independent and associated territories. This means European expats with
investments and bank accounts in Gibraltar, the Channel Islands, the Isle of
Man, the Cayman Islands, the British Virgin Islands, Anguilla, the Turks and
Caicos Islands and Montserrat will be subject to the tougher tax directive from
January 1, 2005.
These tax havens are resisting the new EU directive and
question whether they should be included at all. The overseas territories fear
losing lucrative customers if the islands are forced to reveal their identities.
The Cayman Islands took its case to the European Court, but
the court said the grievance was with the UK and not the EU, as it has no power
to enforce its writs outside the EU. Gibraltar has also sought legal advice on
whether the EU or the UK can impose the directive.
The tax havens are angry they are not allowed to choose
between adopting a withholding tax or agreeing to an exchange of information
regarding bank accounts.
The reason is that British Chancellor Gordon Brown has
decided to come totally clean and has even taken further steps. The chancellor
has not only promised to include all the UK’s associated territories, but has
only given them the option of exchanging information, consequently revealing
their customer identities.
Gordon Brown knows that many of these offshore islands are
regarded as tax havens, attracting tax-evading European citizens and criminal
syndicates. He wants to stop this to give the UK a better reputation.
The British chancellor seems to stand a good chance of
fulfilling this ambition. The victims will be European expats with investments
and savings in Gibraltar or the other tax heavens, which may no longer guarantee
confidentiality.
Options for the future
Individuals may also choose to waive confidentiality and
request the bank to send reports to tax authorities in the person’s homeland.
This can be a great advantage in cases where the actual tax rate would be below
15% (or later, 35%). Bankers do not expect many people to take this irreversible
step, but are ready to administrate these reporting procedures.
It’s important to note the new tax measures apply only to
gains made on bank accounts, not bonds and other debt instruments and mutual
funds when 40% or more of the investment portfolio is placed in bonds and
interest accounts. A different weighting of the portfolio would dramatically
change the situation.
The new tax applies only to residents of an EU country and to individuals
only, not companies. Anyone who is resident in Thailand will NOT be affected –
for the moment.
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on [email protected]
Snap Shots: How to get inspiration - without really trying
by Harry Flashman
Have you seen that advertising hoarding that proclaims
“Inspire the Next”? I really do not know what the message was supposed
to be, but it made me think about photographic inspiration.
Everyone should have a photographer whose work
stimulates them to greater heights. For me, these include Norman
Parkinson, Helmut Newton and Jeff Dunas, but the one photographer who
inspires me not only with his images, but also with his words, is Larry
Dale Gordon, whose name has cropped up in these columns more than once
over the years.
Now, when I say that your favourite photographer’s
work should inspire you, that does not mean that you should rush out and
slavishly copy their work. Don’t laugh, I have seen it done so many
times in camera club level photographers who have been most upset when I
mark them down for copying, rather than being creative. How many times
have I seen the kitten looking at the goldfish in the brandy balloon, or
the kitten hanging from a tree branch? Too many!
When I say “inspire” I mean that you look at the
work and say to yourself, “How did he/she do that?” What this means is
that you should look at the end result and work out how you can use that
technique to produce your own shot. This is not copying, this is getting
inspiration.
So why does Larry Dale Gordon (LDG) inspire me? There
are many reasons. First off, he is a self trained photographer, who
believes that the way to learn is to do it. Let me quote you from one of
his books, “I learned photography through experience; by putting film
through the camera, peering through the lenses, trial and error, and
pondering every facet of light. It’s the only way. If you think there is
another way, or a faster way, write a book telling how and you will make
considerably more money than by being a photographer.” These are very
wise words. Cut them out and stick them on your bathroom mirror and read
them every day!
I’ve tried to see just what it is about LDG’s
pictures that appeal so much to me and I’ve come up with two basic
concepts. Simplicity and Colour.
Look at the photograph I have used to illustrate this
week’s article. A classic sunset shot. The girl in the meditation
position. The unspoiled acres of shifting sand. Unfortunately, Pattaya
Mail is a black and white medium, so just imagine, if you will, what
that shot looks like predominantly orange/red with the black shadows. It
is a simple, uncluttered shot with really only one colour in it. It is
classic and timeless and there is absolutely nothing to detract (or
distract) the eye from single figure in the photograph.
OK, so you still want to get a picture like this one?
It has inspired you enough? Here’s how. Find a sand or gravel pit. There
are many around cement depots, or in an old quarry. Find a homogenous
background, one that does not have houses, cars, trees and the like. But
one that will allow you to see shapes as the sun starts getting lower. We
are looking for light and shadow, just like LDG.
Now is the time for a “tobacco” filter. On the
bright sunny day, with the light behind or to the side of your subject(s)
hold this brown/orange filter over the lens and pop the shutter. The
camera will do the rest. Experiment with different colours to get
strangely wonderful or weirdly dreadful results.
The only point to really remember is to get the light
behind or to the side of the subject. You want the sun’s rays to be
close to horizontal, so it will be late in the afternoon. That is the time
for not only ‘warm’ lighting, but lighting that will give strong and
long shadows.
Amaze your friends with a dramatic monochromatic shot - and if you
don’t tell them about Larry Dale Gordon, I won’t either!
Modern Medicine: You know you’re better
when you can pass wind
by Dr. Iain Corness, Consultant
Some of you have expressed interest in what
stimulates the topics outlined here each week. Most come from yourselves (and a
sincere thanks to you, John Langan, for the topic you inspired), but this
week’s topic came from my own experience. Very recent experience!
I was going to head it “You know you’re better when you
can fart,” but knowing how the editor might feel this was in bad taste, I
didn’t. Even though this is more of a bad smell than the other!
I could have called it, “The oyster and my porcelain
friend.” The world is your oyster they say, but for me it was the reverse -
the damned oyster took over my world.
What happened was that my wife brought home a bag of fresh
oysters from the local market. It was no special champagne celebration, but
merely a bargain spotted and capitalized upon. They were lovely, eaten with some
garlic and a very small dob of chilli sauce. Without a drop of alcohol passing
my lips (true!), I retired to bed at 11 p.m. to suddenly wake at midnight with
my mouth awash, tingling in my cheeks and the awful realization I was going to
vomit. With an agility that would have made an Olympic Hop, Step and Jumper
proud, I hurdled the bed, jumped into the toilet and emptied my stomach in the
porcelain bowl.
I returned to bed, to repeat the Olympic performance 20
minutes later, but by now it was bright yellow acrid bile. And again 20 minutes
after that, and on and on and on, with more encores than Mick Jagger.
The Olympic athlete at 4 a.m. was dragging a battered belly
from bed to toilet and return. It was time to forget about pride and my proud
boast of being “always well”. I was put in the car and my wife drove me to
the Bangkok-Pattaya Hospital.
It did not need a brain surgeon to work out that I had a case
of acute food poisoning, and one of those oysters would have been the culprit.
Diagnosis agreed upon, the principal treatment is fluid replacement. The
intravenous drip was soon in place, and some anti-vomiting medication and
anti-spasmodic drugs sent up my IV line.
In a daze I was transferred to a room where the angels in
white were waiting to tuck me in. There was also the usual bed in the room for
relatives of the patient, a concept that is not universal all over the world,
but one that I do strongly believe in. There is nothing more comforting than to
know one’s partner is there, caring and watching over you. Anything to allay
anxiety is good for the speedy recovery of any patient.
By the next morning, Mr. Oyster’s toxins had reached my
lower bowel, and their departure from my gastro-intestinal tract was aided by
rapid peristalsis. This is medical jargon for “the runs” and other
euphemisms for diarrhoea (“diarrhea” if you voted for George Bush).
There are a couple of schools of thought here. The one I
adhere to does not include something to immediately stopper you up, like
Imodium. The body (in this case the bowel) knows what is best and is rapidly
excreting the problem. What is important, however, is electrolyte replacement
therapy (the crystals you dissolve in water) to stop the body becoming
unbalanced in its electrolytic make up.
And as I said at the start of this article - you know
you’re better when you can fart! I’m better!
Learn to Live to Learn: All Things Are One
with Andrew WatsonDear
Readers,
It is an honour and a pleasure to take over this column from
George Benedikt. I have very much enjoyed reading his articles and from what I
hear, you have too. It is my objective to continue exploring the inherently
important subject of education in the same fashion – critically,
compassionately and sometimes, provocatively.
People might know me as a devoted disciple of the IB diploma
and whilst I will do my best to remain impartial, you might very well find that
my educational inclination becomes pervasive. I’ll tell you why. I’m
essentially an artist, but I’ve studied a range of subjects in a number of
different countries, from Global Politics to Fine Art, from Judaism to Drama,
from the States to Cambridge.
I’ve witnessed some horrific scenes that I would rather not
have witnessed (I was in Jerusalem for three years before coming to Thailand in
2001) and I’ve been fortunate enough to have seen extraordinary and heavenly
beauty. I am, as I believe we all are, the sum total of our experience and
education and whilst this proposal might seem fatuous, upon closer examination I
think that when you look at the problems and injustices in the world, locally,
regionally and globally, the reasons, solutions and the answer can be
found in education.
What that statement entails is expansive and I do not pretend
that I have a comprehensive answer but I do have the willingness and the passion
to keep looking for one.
In breaking down the world of education into manageable
parts, I will make reference to the “world outside”. In overhauling
education, I hope to bring to your attention many variables and ponderables that
hitherto you might have overlooked.
Assumption, presumption, cultural heritage and bias,
language, ignorance, bigotry, prejudice, multiple intelligences, concepts of
success and failure. Education, like life, (like art!) deals with these issues
and hopefully promotes values and offers solutions based in knowledge,
imagination, understanding, tolerance, strength, honour and integrity. After
all, if we are not in education for the purpose of helping our children create,
learn, understand, interact, tolerate and “succeed” and make the world a
better, safer place, then what?
Of course, what constitutes a better, safer world is where
disagreement starts. Some favour oppression, some favour bullying, and some
favour intimidation. Others prefer compassion, generosity and love. We see all
these aspects of human existence everyday in the media and around us but can we
make the link between what we might regard as “oppressive” behaviour that we
hear about, read about, comment on, ridicule and proclaim as unacceptable in others,
and our own behaviour towards others?
I believe that education helps us to understand ourselves and
others better. It is a mirror which can help us see who we truly are. I believe
that at the centre of education there must rest an acknowledgement of common
humanity and the delicate fragile interdependence that bonds us all together.
In writing about educational issues, I will often make
reference to interdependence. When I read books from The Alchemist to the Bible
and the Koran, see films like the Killing Fields, even cartoons like Toy Story,
listen to “Blowing in the Wind” or “Imagine”, look at paintings by
Caravaggio, I recognize an implicit and often explicit understanding in the
writers, directors and artists that we are all connected. And that makes
me feel like I want to celebrate life itself!
Thus, an action on one side of the world must and does
impact on us all. And I, who has spent so much of his life in Israel, cannot let
my first column pass without making mention of two happenings in the world of
the last two weeks.
Firstly, the passing of Yasser Arafat. Second, the
re-election of George Bush. One man’s terrorist is another man’s freedom
fighter. How are peoples of the world who have such polarised opinions of these
two individuals to be reconciled? By the bomb? By oppression? Surely not.
Reconciliation begins with conversation and if we are to avoid what Rabbi
Jonathan Sacks calls “the clash of civilizations” then education holds the
key, and whilst education may be a never ending journey, there is no justifiable
reason for not consciously embarking upon it. As Gandhi said, “Even the
longest journey starts with a single step.”
Whilst I will consciously try to write in the way I
teach, talk and play, sing, joke and paint, I have no intention of deviating
from the prescribed path of this column that has most recently been the
examination of the three major pre-university offerings, with parents’ and
students’ interests uppermost in my mind.
I will do my very best to get around to the many different
kinds of schools in the region and interview the key figures, educationalists,
teachers, parents and students and cross-examine them on the issues that have
been raised previously in these pages. I would like to stimulate informed debate
and I encourage you to send your thoughts, experiences and suggestions to me by
email at this address: [email protected]
Next week: ‘A’ Levels: The Nuts and Bolts
 Heart to Heart with Hillary
Dear Hillary,
Why is it that just when you think you are on top of things, whammo, along
comes something to knock you right down again. Everything was going fine,
had a nice girl, money in the bank and whammo. Girl gone, money gone. This
is not the first time it’s happened either. What do I do to stop being
bitten again?
Bitten Bad
Dear Bitten Bad,
All very easily explained, my poor Petal. You have been bitten by, what Mike
Smith in his delightful book Bangkok Angel describes as, the phantom Bangkok
Bum Biter. Everything is going well, but then, as you so nicely put it -
Whammo! What you need to understand is that since this has happened more
than once before, there is a certain lesson you are not quite getting the
grasp of, isn’t there? Since your misfortunes seem to lie in women and
money you have to first be more choosy with your girlfriends and secondly if
your money was in the bank and then it’s gone - why did you give her the
pin number or your ATM card? Or were you going out with the bank teller?
Dear Hillary,
This is a bit long, so you’ll have to excuse me. I
bought a house last year in a nice village. The people I bought it off
were very helpful and even let me have enough time to get some more money
over from England, and let me stay in the place while I was waiting. They
arranged the transfer and all that sort of thing so I could save money on
legals and even said they would pay the government taxes. I signed all the
bits of paper they gave me and handed over the money at the Lands Office
and we shook hands. I have been living there now for almost a year and
along comes this person who wants to know what I am doing there as he says
it is his house. I told him I had bought it, but he said no, he had bought
it and was waving the deed which he said shows that he is the owner. I
cannot find the people who sold it to me and it seems as though my name
was never put on the deed. I think I have been conned. Do you think I will
get my money back?
House Hunter
Dear House Hunter,
Let me ask you one question, Petal. Would you buy a
house in England without getting legal advice to make sure the title was
in the name of the person you were buying it from? Would you not check
after the sale transfer to make sure your name was on the deed? So why do
you do the opposite in this country? If anything it is even more important
over here to get legal advice when you are an expat and (most probably)
cannot read Thai. Go and see a reputable Thai lawyer (not one recommended
by the previous house seller) and find out where you stand. Sorry, right
now I think you’re homeless! Will you get your money back? Ask the
lawyer and also ask him how much it will cost in legal fees to try. Best
of luck.
Dear Hillary,
We came to Thailand to retire. My idea was to have the
time to do what we want to do, when we want to do it. I don’t have to
get up early to catch the 7.15 bus to work. I don’t have to watch a
clock till it gets to 5 p.m. so I can escape. That was the plan. I now
find I have an even bigger problem. My wife has turned our home into a
sort of zoo. I could put up with this if it didn’t mean that we have to
get up at 7.15 every morning to feed the puppies, or make sure we are home
by 5 p.m. to make sure the squirrel is in its cage. The whole idea of a
relaxed time in retirement has now gone. I have tried talking to her about
this, but it falls on deaf ears, or else she has to run off because the
pigeons are laying. What do I do?
The Zoo Keeper
Dear Zoo Keeper,
You certainly have a problem, Petal. I presume you have
been married a long time, so this behaviour is something new. Did you
leave children behind in your own country and this is perhaps the ‘empty
nest’ problem? Whatever the reason, you are going to have to get a time
that you can have a sensible heart-to-heart with her (not with Hillary).
Perhaps in between the pigeons and the rabbits could be a good time. You
are going to have to state your wishes and needs very strongly. This will
not be fixed overnight. Perhaps if the animals escaped it might make it
easier. They were on the streets before, so it should be nothing new. More
suitable pets might also be an idea. Tortoises only need food once a week
I believe. If this doesn’t work and she insists on looking after her
pets, you might have to find a couple of your own. Buffaloes might be a
good start, some of them have very interesting families! Best of luck.
PC Blues - News and Views:
Novell fires a broadside
Part 1
Micro$oft has a website explaining why Windows is
better than Linux. Novell, which makes NetWare, and was once the leader
in networking, and which, incidentally, owns the patents to UNIX
(despite SCO claiming otherwise), has created a website explaining why
Linux is better than Windows. Novell has also recently bought SuSE, the
German Linux distribution company, and so has several axes to grind in
this marketing war.
Ignoring the merits of their arguments, it is worth
noting the areas thought to be of interest. Novell addresses Security,
Performance and Reliability, Interoperability (the ease with which
arrange that different software packages can work together), Channel and
Partner Opportunities (I think this means after-sales support, but
don’t quote me), Distribution Fragmentation (will something which
works on SuSE also work on Mandrake?), Patents and Indemnification (some
of Linux MAY be infringing on someone’s patent, who might be inclined
to sue for compensation [Who? Micro$oft?]), and Total Cost of Ownership
(TCO).
This last, TCO, is a fun thing to play with. You
start with the cost of the CD, or for windows, the notional cost of
having Windows pre-loaded, and you add in the cost of administering and
maintaining the software, and the cost of training everyone to use it,
and end up with a magic number you can argue about.
Something they particularly highlight is a remark by
Micro$oft that there is a scarcity of Linux expertise among IT
professionals (and how is Micro$oft the best judge of that?). Novell,
who know a lot about UNIX, remark that cross-training from UNIX to Linux
is straightforward. They also remark that the retraining of windows
professionals to cater for Longhorn will cost a lot. Observe that there
will be a scarcity of Longhorn skills, as it is brand new (or will be if
it ever appears).
Also under this heading, Microsoft remark that
administration and management of Linux systems is difficult and
inconsistent since there is a lack of sophisticated and effective tools.
Novell respond to this with a sales pitch. There are, in fact, quite a
number of sophisticated and effective tools in use, and being developed:
there just isn’t any obvious market leader yet. This reflects the fact
that Linux supports a wider variety of applications than does Windows,
and so the tools in use tend to reflect the application area.
Novell wraps up the website with a note of ‘things
Micro$oft forgot to mention’. Micro$oft, on their website www.
microsoft.com/getthefacts, cite extracts from reports which they claim
are unfunded. However, Novell points out, they fail to mention the
strengths of Linux that are cited in those same reports.
The bit I particularly like is: “The ability to
modify and customize the Linux source code affords customers the most
intriguing possibilities for custom application development. This
ability stands in stark contrast to the closed or proprietary nature of
the Windows operating system.”
Next week, let us go back to the beginning again, and
look at the various differences of opinion. It is important to remember
that Novell has a proprietary interest in this, and so their views are
liable to bias.
Psychological Perspectives: Behavioral methods of dealing with low frustration tolerance
by Michael Catalanello,
Ph.D.
To experience wants, desires, and
preferences is a normal part of the human condition. We all know what it is
to want something, even strongly. When wants, desires and preferences are
frustrated, disappointment is a typical healthy emotional response.
Although not a pleasant feeling, we typically accept frustrating events and
take them in stride.
Wants come in a variety of shapes and sizes. Some of our
wants seem relatively small; for example, “I want to avoid a cold.”
“I want Thai food.” “I want to see the latest film.” Some of our
wants, however, may seem larger, more powerful and compelling, for example,
“I want justice,” “I want a raise,” “I want my lover back.”
Psychologist Albert Ellis has suggested that we humans
have a special talent for turning our wants and preferences into absolute
demands. We are most likely to do this if our desires, our preferences are
very strong. The tendency to elevate wants to the status of absolute needs
is a component of a condition sometimes called “low frustration
tolerance.”
It is worth noting that viewing a preference as an
absolute necessity doesn’t make it so. The decision that something that
we merely want is something that we must have is clearly arbitrary, and
irrational. Demanding what we can’t have is a waste of time and effort.
Demanding what we can have is usually unnecessary.
What are the consequences of elevating our preferences
to the status of absolute necessities and demands? Are there disadvantages
to thinking irrationally?
According to Ellis, our thoughts, emotions, and behavior
are closely interrelated. If we are thinking irrationally, we are likely to
experience emotional and behavioral disturbance as well. In effect, what
and how we think about our wants and desires determines the nature of our
emotional, as well as our behavioral responses to frustration.
When the things we demand are not forthcoming, we are
prone to feel, not only disappointment, but less pleasant emotions, perhaps
damning anger or despair. Strong feelings of anger or despair can be
unpleasant experiences. They can have other unpleasant consequences as
well.
Are you most effective when you are emotionally upset?
Does your anger help you choose the best method of dealing with the source
of your anger? Does despair make you more or less likely to achieve your
objectives? The evidence from the behavioral sciences points to the
ineffectiveness of certain emotions like anxiety, depression, damning
anger, guilt, hurt, jealousy, and shame in improving people’s
performance. These emotions, besides being unpleasant, can interfere with
clearheaded thinking and effective problem solving.
Certain methods of dealing with frustration and
emotional upsets, labeled “cognitive” methods, target the irrational
thoughts, attitudes and beliefs of the frustrated individual. By changing a
person’s thoughts, these methods produce positive changes in the
person’s emotions and behavior as well.
In addition to cognitive methods, psychologists have
also developed behavioral methods of dealing with frustration and
disappointment. These methods target self-defeating behaviors associated
with irrational thoughts and disturbing emotions, and promote more adaptive
behavior.
Often, persons with low frustration tolerance experience
a strong impulse to escape from, or avoid frustrating situations. Although
avoidance can occasionally be a valid course of action, people with low
frustration tolerance generally make far too much use of this tactic.
Accordingly, therapists will often recommend such a person stay in a
frustrating situation, at least over the short term. This is particularly
true if the avoidant behavior is interfering with new learning of more
effective responses.
Self-administered rewards and punishments can also be
used to help break unwanted habits and instill more desirable behavior
patterns. Thus, for example, if I am avoiding uncomfortable social
activities because of past frustrations, I can offer myself rewards for
confronting difficult social situations, and withhold rewards for continued
avoidance. This strategy is highly effective for changing behavior.
Dr. Catalanello is a licensed psychologist in his home
State of Louisiana, USA. He is a member of the Faculty of Liberal Arts at
Asian University, Chonburi. Address questions and comments to him at [email protected]
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