Global Glance: Sep 8, 2015
A quick look at intriguing international stories
By John Bostwick, Managing Editor, Radius
Welcome back to Global Glance. This week we look at:
- How the US-Ireland tax treaty may save an Irish gambler millions
- An international photo essay from — Who else? — a small-motor manufacturer
- The surprising results of a global tree census
US-Ireland Tax Treaty May Save Irish High Roller Millions
The United States has signed income tax treaties with dozens of countries, from Armenia to Venezuela. As the IRS website explains: “Under these treaties, residents … of foreign countries are taxed at a reduced rate, or are exempt from US taxes on certain items of income they receive from sources within the United States.” Many of my Radius colleagues are deeply familiar with these treaties, and know how each might affect a given expatriate worker’s tax returns. Less than two weeks ago, in fact, Radius tax expert Luigi Nicoletta wrote a blog post on how the US-Germany tax treaty affects US expats working in Germany.
While important and mentally demanding work, the subject of expat tax planning is seldom addressed in the mainstream media. A shining exception to this rule occurred last week when a number of news sources reported on the story of Irish businessman and racehorse owner John McManus, who won over USD$17 million gambling in the US in 2012. As Forbes reported last Monday, the IRS audited McManus in 2014 and found that, due to the US-Ireland tax treaty, he was eligible for a refund of $5.22 million in US federal income taxes that had been withheld for the 2012 gambling win. Forbes goes on: “But one month later the claim was remanded to another department for additional review. Since then, the IRS has taken no action on the claim.”
McManus is now suing for the amount. If he wins, the Forbes article explains (in a passage reminiscent of many Radius client deliverables I’ve read): “McManus is subject to an Ireland domicile levy, a flat tax of €200,000 that applies to any Irish domiciliary whose world-wide income exceeds €1 million and whose Irish property is greater in value than €5 million and whose liability to Irish income tax for the year is less than €200,000. (The domicile levy was introduced in 2010).” In other words, his income tax exposure for the 2012 gambling win may drop from USD$5.22 million to about USD$225,000. See what I mean about expat tax planning being both important and mentally demanding?
International Photo Essay from — Who Else? — a Small-Motor Manufacturer
New Jersey-based Somfy Systems is, according to the company website, “the world’s leading manufacturer of specialized motors and control systems for retractable awnings, rolling shutters, interior shades, blinds, projection screens for residential and commercial use.” This sounds like, and may actually be, a fairly button-down industry, replete with lab-coated engineers and traditional sales forces with cases of samples. Somfy even indicates on its site that the company’s “roots go back as far as 1750.”
Despite these traditional-sounding trappings, Somfy recently published a photo essay that’s downright creative, even artistic. And it’s enjoyed a surprising amount of positive press. The essay has recently been featured in numerous media outlets, including The Washington Post and The Telegraph. Somfy’s description of the project is short enough to quote in full: “We approached photographers in 27 countries via a variety of freelance sites including Fiverr and Upwork. The brief was simple: take two photographs of the view from your window, (one in the morning and one in the evening) and tell us what you see and how it makes you feel.”
The Post and Telegraph articles contain text and pictures from Somfy’s essay, but it’s best to go directly to the company website. When you scroll down those pages, each daylight photo changes to a nighttime version of the same scene. Each electronic “diptych” is accompanied by a description from the photographer, the location where the pictures were taken, and a map of the world with the location highlighted. You have to hand it to Somfy’s marketers: Their innovative, international-themed campaign is drawing a lot of attention to the manufacturer.
Surprising Results of a Global Tree Census
Driving home from work last week, I heard a National Public Radio story that had the following intriguing lead: “Here’s a trivia question: How many trees are there on the planet?” My random guess of 100 billion wasn’t too far off from one previous estimate of 400 billion, which had been based on satellite imagery.
It appears that the previous evidenced-based estimate — virtually the only one in existence until recently — was astonishingly low. Thomas Crowther, a postdoctoral associate at Yale University’s School of Forestry and Environmental Studies, led the project. He and his team used ground-based information (i.e., people actually counting trees in specified areas) to inform satellite data and create a more accurate estimate of the total number of trees in the world. The project took about two years and resulted in a new estimate that was around eight times the previous one, or about 3 trillion trees. As a Wall Street Journal article on the census notes, that’s about 422 trees for every person on earth.
On the one hand, Crowther’s team’s findings are cause for celebration, or at least some relief. After all, trees are known as the lungs of the earth, and most agree that the more trees the world has the better. The study was in fact inspired by the nonprofit group Plant for the Planet, which according to its website “fights the climate crisis by planting trees around the world.” In the NPR article, however, Crowther cautions that the study’s findings should not be cause for complacency: “It's not like we've discovered new trees. … We've just generated a new number that will help us to understand the global forest.” Plant for the Planet has taken note. After the results of the study, the organization has revised its goal of planting a billion trees to planting a trillion.