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AUSTRALIA & JAPAN SIGN NEW TAX TREATY |
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Australia and Japan have signed a new tax treaty to replace an existing treaty signed in 1969. The new treaty is aimed at reducing costs to businesses and removing obstacles inhibiting further corporate expansion into Japan. Bilateral trade between these two countries is significant - in 2006, Japan was Australia’s third largest investor with an investment stock of AUD51 billion, and has also been Australia’s largest export market for 40 years. Further, Australia is now one of the largest recipients of offshore investment by Japanese mutual funds and Japan is the fourth largest destination of Australian investment abroad.
The new treaty will broadly update taxation arrangements between the two countries and will limit the tax that the source country may charge residents of the other country on dividends, interest and royalties.
It will enter into force 30 days after the Australian and Japanese governments have completed their domestic requirements. |
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IMF REVIEWS BERMUDA'S AML REGIME |
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The International Monetary Fund (IMF) conducted a review of Bermuda’s regulatory regime for combating money laundering and the financing of terrorism in 2007, and its findings have led the IMF to urge the Bermudian authorities to speed up the process of updating anti-money laundering and counter-terrorist financing laws (AML/CFT). It noted that there had been little legislative change since the AML law and Guidance Notes were brought into force in 1998, and the last IMF assessment in 2003.
However, the IMF did acknowledge that several pieces of new legislation were enacted by Parliament in June 2007 to address a number of weaknesses in the regime, namely amendments to the Proceeds of Crime Act, the Criminal Justice International Cooperation (Bermuda) Act, and the Financial Intelligence Act.
The jurisdiction’s government welcomed the conclusions of the report and the Bermuda authorities are using the recommendations to develop a roadmap for further enhancements to Bermuda’s AML/CFT regime. |
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MAURITIUS CREATES PROSPEROUS ECONOMY THROUGH SHEER WILL |
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Small, isolated island-states that have recently escaped colonial status are not expected to have vigorous economies and a record of free elections nor strong human rights protection, but Mauritius has accomplished this feat in the last 40 years. Since 1968 when Mauritius achieved independence, growth has averaged 5% to 6% per annum. In those years the economy has been transitioned from a primarily agricultural and fisheries oriented market to one with robust tourist inflow and an offshore industry, as well as substantial construction and industry components. The net result is a standard of living that compares favourably to any in nearby Africa, despite the fact that the only nearby land mass is impoverished Madagascar. Per annum income averages USD13,000, unemployment is 9%, while people living under the poverty line only amount to 10%.
Sectors the government is keen to expand include information and technology as it built a large cyber city to attract foreign investors and clients. The State has funded a heavy Internet infrastructure based in Mauritius’ volcanic hills around a 12-story business centre. Technology streams are accessed both via satellite and a fibre-optic cable linking Portugal, Malaysia, South Africa and Mauritius, offering a net memory centre to back up data as well as web-hosting, e-commerce and financial transactions. Technology planners travelled from Indian technology centres such as Bangalore and Hyderabad to give guidance and the island hopes to continue a transition from agriculture while still preserving lucrative sugar-producing areas. A goal of the builders is to make a "Disaster Recovery Service" open to the entire world, in the event that terrorism strikes any mainland information hubs in Asia or Africa. |
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HONG KONG RANKED WORLD'S FREEST ECONOMY |
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Hong Kong has been rated the world’s freest economy for the 14th consecutive year by the US-based Heritage Foundation in its 2008 Index of Economic Freedom which ranked 157 countries and territories.
The survey assessed 10 individual areas namely: business freedom; trade freedom; fiscal freedom; government size; monetary freedom; investment freedom; financial freedom; property rights; fdm fm corruption; and labour freedom.
Hong Kong scored exceptionally well in almost all areas. Its income and corporate tax rates are very competitive, and overall taxation is relatively small as a percentage of GDP. Business regulation is simple and investment is strongly encouraged, and there are virtually no restrictions on foreign capital. It could have done better in trade freedom and its weakest score was in monetary freedom and would be higher if Hong Kong ended its remaining price controls.
Singapore came in a close second and Ireland was in third place. Switzerland, the UK and the US were in the top ten. Emerging economic powerhouses India and China were ranked among the least free economies (115th and 126th respectively), despite their fast growth. North Korea was ranked as the world’s most economically repressed country, with Cuba, Zimbabwe, Libya and Myanmar remaining at the bottom of the chart. To see the full index, go to the Heritage Foundation website: www. heritage.org/research/features/index. |
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