Ecuadorian tax haven referendum, 2017

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A referendum on banning politicians and civil servants from having bank accounts or companies based in tax havens was held in Ecuador on 19 February 2017, alongside general elections.[1] The proposal was approved by voters, giving officials one year to transfer their assets.[2] If they do not, they will be removed from their posts.[2]

The question on the ballot was "Do you agree that, for those holding a popularly elected office or for public servants, there should be a prohibition on holding assets or capital, of any nature, in tax havens?"[2]

Classification of tax havens

In preparation for the referendum, the Ecuadorian Internal Revenue Service issued a resolution outlining the criteria for a jurisdiction to be considered a tax haven, establishing two categories: Preferential tax regimes, and low tax jurisdictions.[3] A preferential tax regime was classed as a jurisdiction whose effective tax rate is below 60% in relation to the Ecuadorian corporate income tax (CIT) rate of 13.2%.[3] A low tax jurisdiction was classed as having an effective tax rate below 60% in relation to the Ecuadorian CIT of 13.2% and no substantial economic activity.[3] The IRS may remove a country from their list of tax havens if it reforms its tax policy, if it enforces a treaty to avoid double taxation, including a special information exchange clause, or if its laws do not include banking confidentiality, securities or other regulations that prohibit sharing information with the Ecuadorian IRS.[3]

Along with this definition, the Ecuadorian IRS published a list of countries which currently meet the definition of a tax haven under their law.[3] This list included 28 jurisdictions in the Americas, 19 in Oceania, 16 in Europe, 13 in Asia, 9 in Africa and two other island territories.

Africa Americas Asia Europe Oceania Other

Campaign

Outgoing President Rafael Correa stated that he would campaign in favour of the proposal,[2] having previously stated that tax havens were one of the biggest issues for democracy.[4]

Results

Choice Votes %
Yes 5,030,579 55.12
No 4,096,559 44.88
Invalid/blank votes 1,336,496
Total 10,472,302 100
Registered voters/turnout 12,816,698 81.64
Source: CNE

Notes

  1. ^ a b c d e f g h i British Overseas Territory
  2. ^ a b c Part of the Kingdom of the Netherlands
  3. ^ United States unincorporated territory
  4. ^ a b c Overseas Collectivity of France
  5. ^ a b British Dependency
  6. ^ Australian External Territory
  7. ^ a b Free Association with New Zealand
  8. ^ Free Association with the United States
  9. ^ Dependent territory of New Zealand

References

  1. ^ Referendum on tax havens will be conducted in the elections of 2017 Ecuador Times, 22 November 2016
  2. ^ a b c d Ecuador to Hold Referendum on Tax Havens Telesur, 23 November 2016
  3. ^ a b c d e Ecuadorian IRS issues resolution with new list of tax haven jurisdictions EY, 9 February 2015
  4. ^ President Correa: tax havens are one of the biggest problems in our democracies Andes, 29 July 2016
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