Vocabulary

To edge closer подходить ближе

To benefit извлекать пользу, выгоду

Worthy достойный, заслуживающий

Flawed полон недостатков, изъянов

Policing of taxation политика налогообложения

Gross большой

On a large scale в больших масштабах

Stringent строжайший

Reluctant делающий с неохотой, неохотный,

вынужденный

To impose налагать, облагать (налогом)

Withholding удерживающийся

Neatly четко, аккуратно

Confines пределы, рубеж, границы

Capital flight утечка капитала

Swift быстрый, скорый

Undeniable неоспоримый, несомненный

Unwelcome нежеланный, нежелательный, неприятный

Wedge клин

Agenda повестка дня

To eliminate исключать, упразднять, ликвидировать

Ominously угрожающе

To hint намекать

Subsidiarity помощь, субсидия

To vie соперничать

Flexibility гибкость, уступчивость

To misguide вводить в заблуждение

To tackle вырабатывать, решать, закреплять

OECD (the Organization of Economic Организация экономического

Cooperation and Development) сотрудничества и развития

Unilateral односторонний

Tax evaders уклоняющиеся от уплаты налогов

To stifle душить, подавлять

To promote помогать, содействовать, способствовать

To drop оставлять, прекращать

Exercise 17. Choose the correct explanation without using a glossary.

1. “to receive advantage, to profit” is …

a) to stifle

b) to benefit

c) to belt

2. “having value, merit or worth” is …

a) worthy

b) worthless

c) worst

3. “rigidly controlled, enforced, etc.; strict” is …

a) strong

b) ominous

c) stringent

4. “unwilling, resisting, opposing, disinclined” is …

a) relinquish

b) reluctant

c) worthy

5. “a boundary or bounded region; border, limit” are …

a) confines

b) confessions

c) benefits

6. “moving or capable of moving with great speed; rapid; fast” is …

a) sweet

b) swift

c) sweep

7. “that cannot be denied, indisputable” is …

a) unclean

b) uncomfortable

c) undeniable

8. “to take out, remove, get rid” is …

a) to eliminate

b) to benefit

c) to elevate

9. “threatening, sinister” is …

a) omissive

b) ominous

c) reluctant

10. “to struggle for superiority (with someone) or enter into competition (for something)” is…

a) to vie

b) to battle

c) to eliminate

Exercise 18. Reread the article of exercise 16 more carefully and complete the sentences given below using information from the article:

1. The European Union, UK objections aside, edged closer last week to agreement about ___________________________________________________ .

2. The EU is trying to improve the policing of the taxation of _______________

_______________________________________________________________.

3. The European Commission has proposed that EU countries should

______________________________________________________________ .

4. Now, with global capital more mobile, the movement of funds may be even

______________________________________________________________ .

5. The EU proposal is also unwelcome because _______________________

______________________________________________________________ .

6. The proposal is itself part of a package which includes plans to eliminate

______________________________________________________________ .

7. Until now, national governments have held fast to the principle of _______

______________________________________________________________ .

8. But the pressure being put on the UK to accept the withholding tax proposal suggests that ________________________________________________________

_____________________________________________________________________________.

9. Loss of tax flexibility would be a grave mistake and could permanently damage_____________________________________________________________

______________________________________________________________ .

10. Unilateral EU action will not stop tax evaders, but it could stifle the move towards _____________________________________________________________

______________________________________________________________ .

Exercise 19. Single out the main facts of the article and present them in a short review.

LESSON 2

Exercise 1. Read and discuss the text that follows. Use the glossary given after it. Give your opinion of “tax havens”.

Tax Havens Explained

What do the Bahamas, Bermuda, Hong Kong, Liberia, the Netherlands, the New Hebrides, Panama, and Switzerland have in common? They are all “tax havens”.

Essentially, a tax haven is a place where foreigners may receive income or own assets without paying high rates of tax upon them. Although, strictly speaking, not all tax havens are countries, we can refer to them as such here for the sake of convenience. In some havens the tax relief that foreigners enjoy stems from the absence of the chief forms of direct taxation – income, estate, and gift taxes; but in most countries the relief stems from special features of the tax system that result in a very low effective tax rate on certain forms of foreign investment.

Even though the list of tax havens includes several developed countries, most are developing countries. It is precisely their example that other developing countries are tempted to follow, in the hope that becoming a tax haven will help them solve some of their economic problems.

Tax haven operations consist fundamentally in establishing within a tax haven country one or more legal entities, such as trusts, personal holding companies, or corporate subsidiaries, and attributing to them income earned elsewhere in order that it should be taxed at the country’s low rates or perhaps not taxed at all. This objective is usually accomplished by either (1) accumulating income in the tax haven country at low rates of tax to be withdrawn later and invested elsewhere according to the investor’s wishes; or (2) artificially shifting business profits from high-tax countries to a tax haven country.

Low tax rates are perhaps the principal attraction offered by tax havens. Usually these low rates are associated with income taxation; in fact, what springs to mind immediately upon hearing the words “tax haven” is the absence of income taxation that exempts foreign investors. Though it is true that many of the advantages offered by tax haven countries are income tax advantages, these are by no means the only benefit that these countries offer to foreign investors.

Within the tax field, the absence of other taxes such as estate, inheritance, and gift taxes may be as important to certain investors as the absence of an income tax. Bilateral tax treaties between a tax haven country and some of the major developed countries are another feature that may attract investors. The existence of a tax treaty allows third-country investors to base their holding companies in tax havens and obtain a reduction in withholding taxes applied to the dividends and interest they receive from developed countries with which the tax haven country has the tax treaty.

Strict and well-enforced rules of banking secrecy and, in general, the possibility of doing business without close supervision by government agencies are additional attractions usually offered by tax haven countries. Other factors, such as the low cost of doing business, the existence of liberal banking liberations and the absence of exchange controls are also important. Finally, a good communications service, a well-developed legal system with an abundance of legal and accounting expertise, and, above all, a high degree of political and financial stability also help to make a country successful as a tax haven.