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Uganda: Civil Society Position on Tax Revenue Measures for FY 2017/18 (21.04.2017)

Report from the MoFPED shows the growing Ugandan debt by June 2016!

Again, the Ministry of Finance, Planning and Economic Development (MoFPED) dropped another report on the fiscal policies and the fiscal health of the economy in Uganda. The National Resistance Movement (NRM) have created this environment as the growing debt and growing interest payment comes with their planned debt rise. Still, the PriceWaterhouseCoopers spelled gloom earlier in the year, as this report was dropped on the MoFPED web page today. Even if the Report was spelled out in December 2016. It is if like the NRM didn’t want this to spelled out early. Since the numbers aren’t compelling of an arts piece, more issues… just take a look!

The stock of total public debt grew from US$ 7.2 billion at the end of June 2015 to US$ 8.4 billion in June 2016. This represents an increase from 30.6% of GDP to 33.8% over the two periods. The increase was largely on account of external debt, which grew from US$ 4.4 billion to US$ 5.2 billion over the period. Domestic debt increased from US$ 2.8 billion to US$ 3.2 billion” (MoFPED, P:V, 2016).

That the debt are growing quick, as the public debt grew with US$ 1.2 billion, that the percentage of GDP went up with 3,2%, the external debt rose with US$ 0.8 billion and the Domestic debt went up US$ 0.4 billion. All of these numbers show the amount of monies that the Government are adding on their debt, as the UNRA and the development projects are suspended by World Bank. So the Infrastructure development can be questioned as the growing debt, as the government must have other uses of the growing and scaled up debt. Since the transparency of the economy isn’t there and that the sanctioned bills comes from the State House. Just look at the growing interest rates as well.

Interest Payment as a percentage of GDP stood at 2.2% as at end June 2016, up from 1.9% as at June 2015. The increase is largely explained by interest payments on domestic debt, which grew from Shs 1,077 billion in FY2014/15 to 1,470 billion in FY2015/16. There was a significant increase in the weighted average interest rate of Government debt; from 5.9% to 6.5% in June 2015/16. This followed increases in the weighted interest rates for both domestic and external debt, from 13.6% to 15.3% for domestic debt and from 0.9% to 1.2% external debt. As interest rates increase, so do the debt service obligations of Government” (MoFPED, P: 4, 2016).

The difference between June 2015 and June 2016 the percentage has grown with 0.3%, the domestic interest rate grew with Shs. 0.393 billion. The Interest rate alone went up by percentage 0.6%, as the weighted interest rates went up 1.7%. The key sentence that the report wrote and I repeat: “As interest rates increase, so do the debt service obligations of Government”.

That idea isn’t only on the interest payment percentages are running higher, but as the debt goes up, the interests goes up. So the Debt Service Obligations are going up for the Government. This is a natural outcome, that the obligations for the state goes up with the amount of debt it rises. So the government can try to portray this is controlled, and to one extent it is under control. Still, the growth in this regard proves that the NRM regime are pilling up debt and increasing their debt, as well as interests. In the end this will make the state worse. Especially knowing that the energy dams have been built poorly and many of the expensive roads haven been fruitful. This is development that the growing debt is being used to…

So the NRM regime and the Ugandan government isn’t believable… the rise of debt and interests show’s the current state of affairs. Even if the percentage is after plan, the government still has to take charge and make sure they can pay back both the debt and interests. Peace.

Reference:

Ministry of Finance, Planning and Economic Development (MoFPED) – ‘DEBT SUSTAINABILITY

ANALYSIS REPORT 2015/16’

Uganda: UPC Calls for Economic Reforms (05.04.2017)

Var Jern-Ernas store prosjekt for de Blå-Blå: Uendelig Sentralisering og Privatisering?

Snart er den første Blå-Blå regjeringen periode over, den ser ut som en slagen sammensluttning av borgerlige partier som gikk inn med mot og kraft etter 2 perioder med Rød-Grønt samarbeid, der Jens Stoltenberg hadde regjert med ro og faktisk handlingsrom.

Erna Solbergs Høyre gikk i regjering med Fremskrittspartiet med Siv Jensen, også med støtte fra Kristelig Folkeparti med Knut Arild Hareide og Venstres Trine Skei Grande. Alle disse laget deres Sundvold erklæring som skulle være de borgerlige parti svar på Soria Moria. Dette skulle være starten på en frisk bris etter årene med Senterpartiet, Sosialistiske Venstreparti og Arbeiderpartiet i regjeringen.

Etter disse årene, hva er inntrykk av samarbeidet mellom borgerlige og hva har de oppnådd? De har skiftet det politiske klimaet, men ikke til det bedre. Åpne sår og konflikter er mer realistisk den solid dialog. Fremskrittspartiet har hardnet og mindre medmenneskelig, mindre nå enn da de var i opposisjon. Høyre partiets ledere og ministere er mer opptatt av prestisje enn av å lytte til folket.

De neste lederne i Høyre som Bent Høie og Jan Tore Sanner er i spydspissen av politisk arroganse og lite ydmykhet med makt. De kan lett gå imot alle rapporter og kjøpslå inne på tinget, men å høre på kommune Norge eller fagfolk innen helsevesenet er ikke så nøye. At Fremskrittspartiets Ketil Solvik Olsen vil privatisere jernbanen er å forvente og dele det opp til bitte små bedrifter. Som igjen hjalp flere konsulenter i jobb er ikke så nøye. Alt skal helt privatiseres slik at de rike borgerlige kan nyte samfunnet, mens resten ikke får råd til de trengende sosiale oppgavene. Høyre og FrP drømmer om Amerika og gjøre den Norske staten like liten som det Republikanske partiet i USA gjør akkurat nå. Der alt er styrt av bedrifter og intet annet enn det nødvendige av staten. Fordi det er god butikk og dyrt for innbyggerne. Dette vil skje om Høyre og FrP får oppnådd alle sine våte drømmer om «samfunnsbygging» på bedrifters premisser.

Vel, de har prøvd og prøver, det å åpne for Poker og Segway viser bare populismen som er innarbeidet, i sammen med deres iver etter å prøve å være folkelige. Der Blå-Blå paradigme virker som mer tvang, mer skattelette for de rike, presise prosjekt og unødig liberalisering av statelige bedrifter. Man kan lure hva er grunnen og hva er det de vil?

Høyre virker mer og mer som partiet for de store bedriftene, ikke for de folket. Vi skal likevel tro på Norge og mulighetene som Høyre skal vise oss. Arbeidsmarkedet er laget for næringslivet, hardere og hardere å søke jobber og få jobb. Boligmarkedet så trangt og smalt, at om man ikke har foreldre som kan være kausjonister å kommer man nesten ikke inn. Helsevesenet bli klart for å bli slaktet, Postvesenet er slaktet, Jernbaneverket og NSB er slaktet, videre er listen lang. Var dette de ville få til?

At man liberalisere for det liberale politikkens skyld, mindre stat, dyrere for borgerne for samme utgifter, økte kostnader og økte skatter, mens skattelettene kommer til de som allerede har formuer og eier bedrifter. De som trenger det og trenger støtte, må jobbe mer for å få det de trenger, mens de som allerede har alt og alle muligheter får mer friheter. Er det dette samfunnet som Høyre og de Blå-Blå jobber for?

Hva skal vi tro på og hvordan tillit skal vi ha til Høyre og deres BLÅ agenda?

Jeg bare tviler på virkningene vil være og være rimelige, at de vil ha den ønskede effekten som de stortingsrepresentantene og ministrene i regjeringen. Det virker mer som nyttige verktøy for de allerede rike, enn for de som trenger staten. Der statelig bedrifter og organisasjoner skal brukes eller bli privatisert, slik at staten skal kjøpe offentlige tjenester og ikke være tjenestebærende. Fordi dette er god politikk.

At staten ikke skal eie, men skal leie, at staten skal ende opp som leilending i sitt eget rike. Staten skal ikke om de får sitt ønske eie sykehus, skoler, televerk, kraftverk eller andre nødvendig infrastruktur. Det skal helst ikke være offentlige selskap som bygger veier, hus eller større infrastruktur prosjekt. Alt skal på anbud og skal være helst igjennom internasjonale forretningsforbindelser som både passer EØS avtalen og frihandel. Ingenting skal være statisk og sikkert. Det skal ikke være statlig selskap som sikrer nødvendige tjenester eller utbygging som ellers hadde blitt overpriset og dyrt for borgerne. Fordi dette er ikke nøye, de rike får skattelette og de ordinære må betale mer for de trengte oppgavene som er i samfunnet.

Er dette det som ønsket fra Høyre eller har jeg misforstått, med all privatiseringen, med all nedleggelse og tvunget sentralisering. Der man har gjort mer eller mindre alt fritt kapitalistisk, uten tanker om konsekvensene. Derfor ønsker vi mer liberalisering og til slutt en dyrere stat på grunn av ideologiske grunner om fri finans og fritt marked. Istedenfor å se på prisen av frigi og sette det tidligere statelige tjenester på de åpne markedet.

Slik som en kan se etter flere år med åpent marked for strøm og elektrisitet som har skutt i været. Det samme kan sies ettersom boligprisene har bare økt og økt. Dette har skjedd ettersom boligprisene ble deregulert på 1980-tallet. Derfor har vi idag eiendomsmeglere, finansanalytikere, boligspekulanter og andre som tjener enorm profitt på utleie og bygging av hus. Som gjør både livet hardere for førstegangs kjøpere og også for alle andre som skal betale for eie et hjem.

Er det slikt det skal bli å ta toget, når staten skal bruke skattepenger for å bygge veier, når borgerne skal betale strømmen at prisene bare skal opp fordi markedet bestemmer og politikerne ikke skal ha styring eller instrumenter for å sikre at har det man trenger. Fordi ideologisk så skal staten bare ha hær og politi, ellers så skal resten ordnes og betales ved tjenester på siden.

Det er slik det ser, ettersom hver del av staten blir separert, hver del av lokaldemokratiet blir sammenslått og hver bidige statelig organisasjon blir privatisert og solgt på det åpne markedet. Snart vil skatteetaten være privatisert til PriceWaterhouseCoopers eller Deloitte. Den Norske Bank (DNB) skal snart ta over Tollvesenet etter de også undertegnet en direkte samarbeidsavtale med politiet og Securitas. Slik at også dette ikke er direkte eid eller styrt av staten. Fordi alt skal privatiseres om mulig. Det er overdrevent, men hvorfor skal sykehus, skoler og veibygging være privat og ikke andre statelige foretak?

Snart kan jo disse som er så gira på gjøre jernbaneverket og NSB i tre foretak, kan gjøre om brannvesenet og politivesenet til private foretak som leier ut tjenester og sikkerhetstilbud i de større byene der Securitas eller andre større bedrifter prøver å få anbudet slik at de kan gjøre politi arbeid istedenfor staten? Når noe blir privatisert mer og mer, hvorfor ikke dette? Er ikke dette FrP og Høyre vil?

Mindre skatt for rike, mer avgifter for folk flest, mindre stat og mer privat virksomhet, gjerne også så liten stat at private foretak gjør det staten gjorde tidligere på premisset av profitt over å levere en god tjeneste til befolkningen. Fordi det er ikke så nøye. Det er viktigere at pampene i Høyre tjener gode penger.

Da mitt siste spørsmål vil vi risikere å være prøve kaniner for mer politisk prestisje og større iver etter å sentralisere våre demokratiske institusjoner slik at vi ikke kjenner de som representerer oss eller har anelse om hvilke kontor som har oppgaver til å hjelpe oss. Vil kjøpe denne tiltenkte sparepakken av våre tjenester slik at Høyre kan gi skattelette til de rike, mens vi andre må betale like mye enn så lenge, kanskje mer senere fordi vi må gjøre om de feil anslag som Høyre og Fremskrittspartiet hadde.

Denne privatiseringen og sentraliseringen er kanskje billig på papiret, men når regnestykket og betalingen både av utformingen, budsjettene, øremerking av midler og tiltenkt profitt til de nye samfunnsaktørene, vil det egentlig bli så billig?

Jeg tviler på dette, gjør du? Peace.

PwC report spells gloom over rising debt in Uganda!

Ugandan shillings

A report released by PricewaterhouseCoopers limited has delivered this month is clearly seeing what others has seen with the economic situation and the use of funds by the National Resistance Movement (NRM) and their regime. This report by a company which is an international company who works with other businesses and civil society organizations who needs economic advice and advisory services for taxes and such; therefore the report from PwC on economic situation is telling. Their speciality on their outlook will be saying with auditors and financial analyst whose words means a lot. They are professional analysts in this field are writing and saying this on the economic climate. The Economic climate is worrying and that has been visible. The liability of the growing debt in the republic has been a hazard together with the lacking internal revenue for the state as well. Just take a look!

Sluggish economy with higher debt:

“This bulletin comes at a very crucial time for the Uganda economy when growth is slowing down, private sector credit is on a decline, consumer demand is low, implementation and execution of critical public infrastructure projects is very sluggish, and the public sector debt burden on the economy is at the highest it has ever been” (PwC, P: 3, 2017). “If the domestic revenues collections continue to underperform, the government will be forced to borrow more from the domestic market. The increase in government borrowing may result in a substantial increase in yields on government securities, which may result in an increase in borrowing rates, which may constrain the private sector credit growth even further” (PwC, P: 7, 2017).

Growing debt:

“The Uganda’s public debt burden has risen by 12.7% in the past four years from 25.9% of GDP in FY 2012/13, to 38.6% of GDP in FY 2016/17. The debt burden is projected to continue rising to 45% of GDP by 2020. Debt as a percentage of revenues has risen by 54% since 2012 and is expected to exceed 250% by 2018. The country’s ever increasing debt burden has resulted in a deterioration of the debt affordability situation” (PwC, P: 8, 2017). “Uganda’s capital expenditures are still too reliant on external finance. Currently debt servicing constitutes 11% of the total government expenditure, one of the highest debt burdens in sub-Saharan Africa. This is expected to increase to 16% of the total government expenditure by 2018. Uganda’s debt burden has risen faster than the government’s own resources, resulting in a debt-to-revenue ratio of 236%, one of the highest amongst B-rated countries. This has prompted Moody’s recent down grade of Uganda’s long-term bond rating by one notch to B2 from B1” (PwC, P: 8, 2017).

An Economy with challenges:

“2016 was an economically difficult year for Uganda. The economy faced numerous challenges due to the continued uncertainty surrounding the recovery in global economic growth, weak commodity prices and geopolitical events in our key trading partners. As a result, of these numerous challenges, our export earnings, FDI flows and remittances to Uganda all went down. These developments, together with a slowdown in the execution of public investment projects and weaker than expected private sector demand, had a major effect on the economy” (…) “Other internal risks include delays in the implementation of public infrastructure projects such as the Standard Gauge Railway (SGR) linking Uganda to its East African neighbours, and the key infrastructure projects critical for the commencement of oil production” (PwC, P: 4-5, 2017).

If you are worried by the Republic and their economy after this, than you haven’t followed the class since this signs have been there for while! The state of the economy is fragile and the debt rise should concern all the ones inside the Republic and also outside. However, this could change, but that has to be done by the government and steer in another direction as today. The greed and the common sense of developing the economy is forgotten, as they are fixated on infrastructure projects and oil developments, while borrowing to fill the losses of donor-aid and internal revenue. This could be done in many ways, but that would not be easy. Peace.

Reference:

PricewaterhouseCoopers Limited (PwC) – ‘Uganda Economic Outlook 2017’ (February 2017)

The Kenya Human Rights Commission to Commence contempt Proceedings against Fazul Mohammed and the NGO Board (07.01.2017)

khrc-07-01-2017-p1khrc-07-01-2017-p2

DNB Nor plan of setting up a Carlson Funds as a “Societe Anonyme” (S.A.) to initially save taxes and write of their subsidiary in Luxemburg; they might claim differently to save face, but the agreement with Luxemburg Authorities says otherwise!

Biathlon Ad Vital DNB

The Company in Scandinavia famous for getting George Clooney to be parts of their commercials and being synonymous with the Norwegian National Team of biathlon, making Ole Einar Bjørndalen wearing a Vital hat to the races and competition as a display of one of the main sponsors of the National Team. That is ordinary in sports, and is ordinary in the time we live in. So that a big bank is supporting a National Team is everyday event, but that is not what I will write about and discuss. As I got to read one of the papers in the Panama Papers leak. Here it is and hope you can see how DNB Nor ASA used the opportunities for meager taxation and higher earning for their subsidiary.

Before you continue her is a classy ad from the company:

Now we will see how the Norwegian Company can also be a little greedy and trying to avoid taxes in Norway, but still earning the profits and having accounts, but using the PriceWaterCoopers (PWC) offer for a Shell Company in Luxemburg to save taxes and still keep the funds in safety in Luxemburg. That is the grand DNB Nor who is the largest bank group in Norway.

Here is how they do it, and it is epic ways of using the shell-companies to avoid Norwegian tax regime and use a Corporate Fund that is a S.A. “Societe Anonyme” as financial company in Luxemburg to simply benefit from the specific tax status for a company in Luxemburg instead of the Norwegian one. Let me take you for a ride!

What is the Carlson Fund Management Company S.A.:

“Carlson is a Luxembourg resident company incorporated on August 14, 1990 as a limited company (“Societe Anonyme”) in order to develop the German and other European markets” (…) “Carlson is a company of DnB Nor group (hereafter the “Group”). The Group is Norway’s largest financial services group with total combined assets of NOK 1,834 billion. It includes strong brands such as DnB NOR, Vital, Nordlandsbanken, Cresco, Postbank.en, DnB NORD and Carlson” (…)”Carlson is part of the life and asset management branch of activities of the Group, DnB NOR Asset Management. It is Norway’s largest fund manager and has a leading position within discretionary asset management for institutional clients in Norway and Sweden” (…)”Until July 28, 2006, the purpose of Carlson was the creation, management and administration of a unique fund, Carlson Fund, created in Luxembourg on August 31, 1990. In this respect, based on the Luxembourg law on UCis, Carlson benefited from a specific tax status exempting the company from Luxembourg corporate income tax, municipal business tax and net wealth tax”.

You think that is saga in the making just see what more they did to secure lesser tax in Norway and close to none in Luxemburg, because corporate greed is what makes the world run like Ussain Bolt!

“By resolution of the Extraordinary General Meeting (“EGM”) held on July 28, 2006, Carlson has amended its by-laws in order to comply with the law of December 20, 2002 transposing the UCITS III Directive 85/611/EEC into Luxembourg law. Since the EGM, Carlson has been responsible for the management and administration of several investment funds. Carlson currently manages a portfolio of funds under 3 fund umbrellas: Carlson Fund, DnB NOR Fund and more recently DnB NOR Part II Fund since February l, 2008 (hereafter the “Funds”)” (…) “As from the date of the EGM (i.e. July 28, 2006), Carlson became subject to an unlimited tax liability and is considered as a newly incorporated entity for tax purposes”.

DNB Bankkort

You think that is bad and telling how the Carlson entity of Luxemburg, which funds and fueling money from the DNB Nor and their subsidies and banks in Norway. As he Tax is high here for any profitable business, this kind of transaction and order clears lots of funds from the Company and banks, which gives higher profits, because of less tax as they follows through consultation to follow the exemptions laws in the tax-haven. Here we go!

How do they secure the tax-exemption with the laws in Luxemburg?  

“Based on article 35 (4) of the Luxembourg Income Tax Law (“LITL”), when a company becomes taxable, all its assets and liabilities have to be valuated, at the time of the conversion, at their fair market value The assets and liabilities concerned are those “contributed” to the fully taxable entity, including intangible assets (article 59 (2) LITL)” (…)”the tax balance sheet has to take into account all the assets and liabilities of Carlson (i.e. the whole assets and liabilities whose, by nature, intend to serve the activity of the company2) including the valuation of the management contract. The administrative doctrine precises that is assimilated as an asset all the potential assets that can be exploited in the context of the activity of the company and with an individual economic value” (…)”Carlson has to revalue its capital in its opening tax balance sheet. The revalued capital includes the share capital of the formerly tax exempt company, the reserves accumulated by Carlson until the moment of the conversion, as well as the revaluation reserves resulting from the step-up at the moment of the conversion. The revalued capital is treated as “fiscal capital” in the hands of Carlson from a tax point of view. Any repayment (of part) of this “capital” to Carlson’s shareholders will therefore not be subject to withholding tax in line with the provisions of article 97 (3) b LITL”.

Now we have seen how the DNB Nord have put a S.A. Society Anonyme with the Carlson Funds to drop money into the Tax-Haven of Luxemburg as the DNB thinks the suits of Luxemburg to perfection and wondered if Barney Stinson bought suits made for Luxemburg.

DNB set up the Society Anonyme is set up with a new “EMG” to get unlimited tax-liability in Luxemburg. So the advice made the funds from the company under the Carlson from the time of the board-meeting by law of the 28. July 2006. The continued thing they did was to take their assets and monies fueled into the Carlson Funds, so the liabilities together with all of contracted value and management in the tax-balance sheet. So there fueling of moneys into the Fund is also fiscal capital and because of the status of the S.A. hide more in the secret company there.

DNB Nor

Then the control of Carlson Funds is by all means controlled by DNB Nord as written here:

“As an example, a major part of the support activities (e.g. accounting) is done in close collaboration with the members of the Group located in Sweden/Norway. Moreover, the members of the team managing Carlson in Luxembourg are all senior officers originated from the Group. Consequently, the distribution of the Funds in Luxembourg is mainly performed thanks to the support of the Group”.

Here is what the group is supposed to pay in tax:

“Taking into account the total 2006 and 2007 value of the business compared to the total 2006 and 2007 annual profit before tax, Carlson will pay an annual and arm’s length remuneration in accordance with articles 56 and 164 (3) LITL to the Group for its support representing 65,92% of its annual profit before tax” (…) “Carlson will benefit from such retrocession of fees over a period of 10 years. As the taxable activity of the Company started in 2006, we propose to recognize such retrocession as from August I, 2006 until the financial year 2016” (…)”The computation of the percentage of notional retrocession of fees will be subject to a supervision period of 4 years (2006-2010). In case of significant/major changes in the business in Luxembourg, Carlson commits itself to inform the Luxembourg tax authorities of any significant changes that would modify its business and/or its tax position in order to agree on the more appropriate tax treatment”.

If you wonder what retrocession means that is planned underwritings of the earnings of the company. Underwritings or retrocession is usually a volunteer act of a company to return property or ceding property, though usually by request and not by forced transaction. Also the underwriting is also done to diversifying assets by consolidating them amongst the stakeholders. That means the last one the percentage of the company which is 65 % of the profits of DNB NORD’s Carlson Funds will dived 65% of the funds to the stakeholders of the company. Initially meaning that the Stakeholders or the Owners  of the DNB NORD and that before any tax in Luxemburg, which is beautiful business model for the Stakeholders and for the ones owning DNB, and by literal controlling Carlos Funds.

The Company found another way to dodge a little more tax:

Net Wealth Tax: As no intangible asset is recognized in the tax balance sheet of the Company, there is no increase of the unitary value of Carlson for net wealth tax purposes”.

This is initially saying that since they have not written any assets of value when they started to operate, therefore they does not have assets or monies worth to be classified for the Wealth Tax Purposes in Luxemburg. Here was yet another way of using the loopholes in Luxemburg to get even less taxation and a favorable way of using the tax-system there.

This article in the middle of the charter of Carlson Funds says the truth of the company:

The purpose of the corporation is the creation, administration and management of one or several Luxembourg and/or foreign collective investment funds in transferable securities authorized according to the Directive 85/611/EEC, as amended (”UCITS”) and of other Luxembourg and foreign collective investment funds not covered by trus Directive (“UCI”) (all together the “Funds”) on behalf of their unitholders or shareholders in accordance with the provisions of chapter 13 of the Luxembow-g law of December 20, 2002 on undertakings for collective investment, as it may be amended from time to time (the “2002 Law”) , and the issue of certificates or statements of confirmation evidencing undivided co-ownership interests in such Funds. The corporation shall manage any activities connected with the management, administration and promotion of the Funds. It may on behalf of the Funds, enter into any contracts, proceed to any registrations and transfers in its nam~ or jn third parties’ names in the register of shares or debentures of any Luxembourg or foreign companies, and exercise on behalf of the Funds and the holders of certificates of the Funds, all rights and privileges, especially all voting rights attached to the securities constituting assets of the Funds. The foregoing powers shall not be considered as exhaustive, but only as declaratory”.

EuroOK

This here says enough of the practices of the Norwegian Banking group of DNB Nor or DNB Nord ASA had a subsidiary for recess their tax-operation and use the lucrative opportunities for keeping the profit without having issues with the Tax-regime in Norway. As the Norwegian rules and tax-regulation without studying them is stricter and has to be stricter than this. Because the end of the Tax contract with Luxemburg disclose the information where they are planning not to pay for their “Net Wealth Tax Due”. So even if the funds grow massively and the monies invested in the Carlson Funds, the opportunity to underwrite 65 % before the tax on its profit and that is possible with the “underwriting” method. In that sense the taxation of the will always is 10% on very little part of the funds, as the stakeholders can theatrically take 65 Euros on the 100 euros. Leave behind 35 Euros of it profit and pay 3, 5 Euro on the 100 Euros of Profit, that is a beautiful operations. If it wasn’t for the underwriting of the revenue then the company would have by the standard tax of Luxemburg paid 10 Euros of tax. 10 Euros is not much of a profit of 100 Euros, but still vastly more than 3, 5 Euros, the difference by quick calculation is 6, 5 euros. That is nearly a price of a Big-Mac Combo-menu that cost around 8 Euros in Luxemburg.

That is because of the technic of underwriting and sharing that with the shareholders and stakeholders of the Carlos Funds S.A. in Luxemburg which is their subsidiary. As written so nicely to the Luxemburg Department of Tax Collection in 2nd July 2008:

“on behalf of our client Carlson Fund Management Company S.A. (hereafter also referred to as “Carlson”), we respectfully request you to confirm, in writing, the content of this letter as to the Luxembourg tax treatment applicable to the situation described herein”.

That the Carlson was supposed to get the reasonable Tax Treatment for the company so there was a hashed plan from the get-go together with the Company of PriceWaterCooper. The plan was made an acted upon. This would not been possible if the DNB Nor did not use the guidance and setting up the charter after the laws there and follow the guidelines of the company setting it up for making sure of having less tax.

As explained with the 100 Euros scenario. The certainty is not any excuse from the DNB Nor can tell away.  As they explained in 2016 to the Norwegian Press:

“No, DNB Luxemburg does not help the costumers to avoid tax. The Advisors function as discussion and talking-partners when it comes to financial questions, which offers legal and legitimate tax-plan for the costumers who live abroad. It could for example be about advice about financial-solution, cross-border transactions, complicated inheritance-regulation and other taxing environment that would be different from the ones who are living in Norway” (…)”DNB does not operate in Luxemburg because of taxation (Foss, 2016).

Well, I have already explained there operation and how they get to pay as little tax as possible through their operation. So DNB Nor had or still have the Carlson Fund Management Company S.A. in Luxemburg to save taxes and earn more monies in their operation and company there. Something they would be able to do in Norway or under Norwegian taxing regulation. Peace.

Reference:

MF I/ECCi/ AEGN/C21108001 M-PEWR – “Carlson Fund Management Company S.A. – Identification tax number: 2006 2240 378- Recognition of a license fee for tax purposes” (02.07.2008) – PriceWaterCooper (PWC)

Foss, Andres Bakke – ‘DNB i redegjørelse i 2014: DNB Luxembourg hjelper ikke kundene med å unndra skatt’ (08.04.2016) link: http://www.aftenposten.no/okonomi/DNB-i-redegjorelse-i-2014-DNB-Luxembourg-hjelper-ikke-kundene-med-a-unndra-skatt-8422413.html#xtor=RSS-3

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