Japan Paraíso Fiscal

Mapping Financial Secrecy Japan Report on Japan Japan is ranked at eighth position on the 2011 Financial Secrecy Index. This ranking is based on a combination of its secrecy score and a scale weighting based on its share of the global market for offshore financial services. Japan has been assessed with 64 secrecy points out of a potential 100, which places it in the mid range of the secrecy scale (see chart 1 below). Japan accounts for slightly under 2 per cent of the global market for offshor

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  Mapping Financial SecrecyJapan   1   Published on October 4, 2011 © Tax Justice Network Report on Japan Japan is ranked at eighth position on the 2011 Financial Secrecy Index. This ranking is basedon a combination of its secrecy score and a scale weighting based on its share of the globalmarket for offshore financial services.Japan has been assessed with 64 secrecy points out of a potential 100, which places it in themid range of the secrecy scale (see chart 1 below).Japan accounts for slightly under 2 per cent of the global market for offshore financialservices, making it a small player compared with other secrecy jurisdictions (see chart 2below). Part 1: Telling the story Japan, like Germany, is not widely regarded as a secrecy jurisdiction  – but our decision finally to include it in this year’s index is vindicated. With a relatively high secrecy score of 64, and a huge offshore market - it has slightly under 2% of the global market share in offshorefinancial services - Japan is a major player in the secrecy world. Japan’s Big Bang in terms of offshore finance happened with the setting up of the so -calledJapan Offshore Market in 1986. Essentially, this was an effort to attract foreign financialbusiness by exempting it from tax and a range of financial regulations, and it was modelledon a similar U.S. facility set up by the United States two years earlier (and it was also areaction to the rapid growth of the offshore Euromarkets generally, pioneered by the City of    ModeratelysecretiveExceptionally secretive 31-4041-5051-6061-7071-8081-9091-100 Chart 1 - How Secretive?Chart 2 - How Big? tinylarge huge small  Mapping Financial SecrecyJapan   2   Published on October 4, 2011 © Tax Justice NetworkLondon since the 1950s.) This was followed by similar tax exemptions for Japanesegovernment bonds in 1999, and for municipal bonds in 2007. The scope of the tax exemptionwas widened in 2010 to include corporate bonds. Japan’s weak provisions on transparency and information exchange, combined with its tax -free treatment of various forms of foreign investment (and exemption from financial regulations) has made it a major destination for illicit financial flows. The country’s relatively poor record of co-operation with foreign governments on money-laundering adds to ourconcerns about this little-noticed secrecy jurisdiction. Next steps for Japan Japan ’s 64 per cent secrecy score shows that it must still make major progress in offeringsatisfactory financial transparency 1 . If it wishes to play a full part in the modern financialcommunity and to impede and deter illicit financial flows, including flows srcinating fromtax evasion, aggressive tax avoidance practices, corrupt practices and criminal activities, itshould take action on the points noted where it falls short of acceptable internationalstandards. See part 2 below for details of Japan ’s shortcoming s on transparency. See this linkhttp://www.secrecyjurisdictions.com/kfsi for an overview of how each of theseshortcomings can be fixed. Part 2: Secrecy Scores The secrecy score of 64 per cent for Japan has been computed by assessing the jurisdiction’s performance on the 15 Key Financial Secrecy Indicators, listed below.The numbers on the horizontal axis of the bar chart on the left refer to the Key FinancialSecrecy Indicators (KFSI). The presence of abluebar indicates a positive answer, as doesbluetext in the KFSI list below. The presence of aredbar indicates a negative answer as doesred  text in the KFSI list. Where the jurisdiction’s performance partly, but not fully   123456789101112131415 KFSI Japan - KFSI Assessment 36%64% Japan - Secrecy Score Transparency ScoreSecrecy Score  Mapping Financial SecrecyJapan   3   Published on October 4, 2011 © Tax Justice Networkcomplies with a Key Financial Secrecy Indicator, the text is colouredvioletin the list below(combination of red and blue).This paper draws on key data collected on Japan. Our data sources include regulatoryreports, legislation, regulation and news available at 31.12.2010 2 . The full data set isavailable here 3 . Our assessment is based on the 15 Key Financial Secrecy Indicators (KFSIs,below), reflecting the legal and financial arrangements of Japan. Details of these indicatorsare noted in the following table and all background data can be found on theMappingFinancial Secrecy web site 4 . This data is the basis on which the Financial Secrecy Index 5 iscompiled. The Key Financial Secrecy Indicators and the performance of Japan are:TRANSPARENCY OF BENEFICIAL OWNERSHIP  –  Japan  1. Banking secrecy: Does the jurisdiction have banking secrecy? Japan does not adequately curtail banking secrecy 2. Trust and Foundations Register: Is there a public register of Trusts and Foundations? Japan does not put details of trusts on public record  3.Recorded Company Ownership: Does the relevant authority obtain and keep updateddetails of the beneficial ownership of companies? Japan does not maintain company ownership details in official records   KEY ASPECTS OF CORPORATE TRANSPARENCY REGULATION  –  Japan  4.Public Company Ownership: Does the relevant authority make details of ownership of companies available on public record online for less than US$10? Japan does not require that ownership of companies is put on public record  5.Public Company Accounts: Does the relevant authority require that company accountsare made available for inspection by anyone for a fee of less than US$10? Japan does not require that company accounts be available on public record  6.Country-by-Country Reporting: Are companies listed on a national stock exchangerequired to comply with country-by-country financial reporting? Japan does not require country-by-country financial reporting by companies   EFFICIENCY OF TAX AND FINANCIAL REGULATION  –  Japan   Mapping Financial SecrecyJapan   4   Published on October 4, 2011 © Tax Justice Network7.Fit for Information Exchange: Are resident paying agents required to report to thedomestic tax administration information on payments to non-residents? Japan requires resident paying agents to tell the domestic tax authorities aboutpayments to non-residents  8.Efficiency of Tax Administration: Does the tax administration use taxpayer identifiersfor analysing information effectively, and is there a large taxpayer unit? Japan partly uses appropriate tools for effectively analysing tax related information  9.Avoids Promoting Tax Evasion: Does the jurisdiction grant unilateral tax credits forforeign tax payments? Japan avoids promoting tax evasion via a tax credit system  10.Harmful Legal Vehicles: Does the jurisdiction allow cell companies and trusts with fleeclauses? Japan partly allows harmful legal vehicles   INTERNATIONAL STANDARDS AND COOPERATION  –  Japan  11.Anti-Money Laundering: Does the jurisdiction comply with the FATFrecommendations? Japan partly complies with international anti-money laundering standards  12.Automatic Information Exchange: Does the jurisdiction participate fully in AutomaticInformation Exchange such as the European Savings Tax Directive? Japan does not participate fully in Automatic Information Exchange  13.Bilateral Treaties: Does the jurisdiction have at least 60 bilateral treaties providing forbroad information exchange, covering all tax matters, or is it part of the EuropeanCouncil/OECD convention? As of June 30, 2010, Japan had few tax information sharing agreements complyingwith basic OECD requirements  14.International Transparency Commitments: Has the jurisdiction ratified the five mostrelevant international treaties relating to financial transparency? Japan has partly ratified relevant international treaties relating to financialtransparency  15.International Judicial Cooperation: Does the jurisdiction cooperate with other states onmoney laundering and other criminal issues?
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