Jake's View | HSBC has nothing to say sorry for if it did no wrong
There is something I do not understand here. The story, as it most commonly appears, is that HSBC's people in Geneva cheated by helping clients dodge tax and HSBC now proclaims itself sorry that this happened.
While calling the practices at the Swiss private bank shameful during a conference call with journalists yesterday, HSBC sought to showcase chief executive Stuart Gulliver's continued efforts to cut costs and reshape the culture of HSBC...
There is something I do not understand here. The story, as it most commonly appears, is that HSBC's people in Geneva cheated by helping clients dodge tax and HSBC now proclaims itself sorry that this happened.
It is entirely within the law, however, to avoid taxes and it is entirely proper for banks to help their clients do so. There is nothing wrong with paying a lower tax rate by booking your income in one jurisdiction rather than another if you may legitimately do so.
The key is whether you may legitimately do it, and there are plenty of circumstances in which you may. There are also circumstances in which you may not, and if you then attempt to do so, then you are evading taxes, which is illegal.
All we have been told about these happenings in Geneva, however, is that HSBC's clients "dodged" taxes. Yes, but was that tax avoidance or tax evasion? If the first, then there is no case to make against the bankers who helped. They were doing their jobs and there is nothing shameful in this.
If your banker or financial adviser tells you, "I can save you $20,000 by making this item an interest-withholding tax rather than a profits tax and it's entirely legit", imagine yourself saying, "No, I prefer paying more tax. It's my duty to beggar myself for my president."
