SEPTEMBER Song - at least my September song (with acknowledgement and tribute to Kurt Weil and Maxwell Anderson, the composers): Damn, It's too long a time, from March to December.....to do just tax - and dream of November.....oh the days are too long - in July.....and and the internet's down (that makes me cry). Yet after 49 years, this much is true: without doin' tax, my writings would be few!

There! Seventy words - and I'll bet that you have absolutely no idea where September Song is from or what its theme was! It's about an aging dictator/governor of New Amsterdam, the pre-cursor to modern day New York City - It's time period: 1647. Peter Stuyvesant who ran what Wikipedia called a semi-fascist, ultra-corrupt government was the centrepiece of this musical entitled Knickerbocker Holiday . And likely he was challenged by some reformer trying for more transparency and corruption-free government. Do you think that will ever happen? Ask Volkswagen and their emission cheating.....ask Toshiba and their phantom income. Alas, some things are likely never to change. Is it any wonder that I view myself as an ethical, existential cynic?

Corruption, small-time in Hong Kong

Deloitte reports (from one of their various and sundry 31 July 2015 newsletters) that a Hong Kong magistrate ' s court convicted a married couple of evading taxes by claiming annual self-education expenses at the statutory ceiling amount for nine successive years. Both husband and wife were each given suspended two-year jail sentences and had to pay taxes, interest and penalties amounting to a total of $HK160,000 (about $US 20,000).

The penalties when compared to that which the Internal Revenue Service is doling out at present, is refreshingly fair. This case probably cost Hong Kong Inland Revenue Department more to process through the courts than they collected but tax evasion is a crime and IRD occasionally wishes to point this out to its tax filers - both big and small. Why anyone would care to cheat in Hong Kong or Singapore is beyond me - the tax rates are so reasonable and processing your returns are so refreshingly simple! But people apparently do cheat and three common areas they cheat at are expenses for self-education, which have a current maximum amount of $HK80,000 per year; residential care expenses for the elderly which also has a current maximum of $HK80,000 per year and approved charitable donations that can total 35 percent of income. All I can say is that if you've got expenses in these areas, you'd darned well better make sure you've got the receipts to back them up if you take deductions. And if you cannot prove the expense, then remember, you do have that tax in a low tax jurisdiction so pay the tax and get on with your life!

Outrage starting to boil over in Japan

The FT on 18 September, wrote about the growing anger Prime Minister Abe is starting to generate over the additional sales tax increase due to come into being in April, 2017. Last year, sales tax was sizeably increased to a hefty 8 percent. Understandably, growth stopped in Japan. There was to be an increase to 10 percent, this year. It was postponed which was a political necessity for Abe to keep his job (although, truth be told, the opposition is in such disarray that Abe could probably have gotten away with it). Now, what is being proposed is creation of a rebate system to be capped at approximately 4,000 yen per person per year. Shoppers would have to hand over their tax ID number whenever going to the supermarket in order to get a reduction from that future 10 percent back to 8 percent on food items and other 'essential' items. The Ministry of Finance wishes to avoid as what it sees as the pitfalls of the European, two-tiered consumption tax system and this is their proposed solution. Japan, which has energy cost crises because it has to import all its fossil fuels to replace nuclear; which faces an aging and medical cost problem eclipsed only in severity by South Korea and the costs of re-arming itself (under pressure from another country - care to guess who that country is?) is not truly ready to increase consumption taxes and it'll be interesting to see if political opposition is able to challenge Abe - and come up with a way to cover costs that it has little chance of escaping. It is not a matter of if there will be tax increases in Japan - it is simply when this will take place and exactly how it will be done.

To W-8BEN (or W-8-BENE or W-9) and how.....

I've mentioned this form before and there is absolutely no doubt in my mind that I will be mentioning it many, many times in the future. Last week I got an email from a client in panic - Hang Seng Bank in Hong Kong sent out a two page form letter explaining that the recipient must sign and return the second page of their two page letter plus another form, an IRS form, but without any explanation of what the forms were, or how to access the forms, or any type of explanation about which form is the one that should be filled out.

Frankly, the banks in Hong Kong have no idea. themselves! HSBC (which is Hang Seng's parent bank) was visited by another client of mine two days ago. When the client asked HSBC which form he was responsible for or if he had to do a separate form for each account, he got a blank stare and was told to 'ask your accountant - they're the ones who know about this'. Only the night before, I went to a Hong Kong Institute of CPAs conference specifically about FATCA and compliance in Hong Kong. The speaker was a San Diego, California CPA/attorney who presented things from the viewpoint of a domestically based tax filer rather than from the standpoint of the expat for whom the attending HK CPAs were there to learn about assisting (or were they there for that purpose or solely to get in their mandatory continuing professional education requirements - I leave that to you to judge, as you, the reader, probably go to the same sort of seminar.....). Regardless, I assisted the client in filling out a form W-8BEN-E, the 'difficult' form. Why should I do this? Why not - when I was not quite sure of what the answer was to be, I wrote comments next to the box checked on the form. Will anyone look at this? There's only one way to find out: wait and see if anyone at either HSBC or Hang Seng Bank does any more than minimum due diligence. Josh Maxwell, the speaker at the seminar, voiced some surprise that Hong Kong gave away so much and got less than nothing in return when the IGA between Hong Kong and the IRS was announced. Yes indeed, I was one of the earliest complainers (although I cannot, for the life of me, think of many others - certainly not the South China Morning Post, which displayed lack of investigative journalism by not even questioning anything about the IGA giveaway). Regardless, my client agreed that we were both attempting - sincerely - honestly - to the best of our respective abilities - to fill out form W-8BEN-E. Was this the correct form? Who knows? We care but obviously if the IRS is unwilling to explain any of this poppycock in a friendly language ( hey, it need not be English - that's what Google Translator is for - assuming that you are not in China, where Google does not currently exist), why should we go into any sort of emotional tizzy? Besides, if nothing else, this is as good a way to see if the banks in Hong Kong are really going to do anything other than collect these forms. Only time will tell......!