The International Consortium of Investigative Journalists (ICIJ) has released details of offshore tax planning activities contained in 11.9 million confidential files leaked from 14 offshore services firms – the so-called “Pandora Papers”. This follows the release of the “Paradise Papers” in 2017 and the 2016 “Panama Papers”.
The ICIJ said it has spent 2 years investigating the details contained in the new Pandora Papers. According to the ICIJ, the documents identify 956 companies in offshore havens tied to 336 high-level politicians and public officials. More than two-thirds of those companies were set up in the British Virgin Islands. In all, the ICIJ said the Pandora Papers reveal the true owners of more than 29,000 offshore companies. The owners allegedly come from more than 200 countries and territories, with the largest contingents from Russia, the UK, Argentina and China.
The ICIJ said a document in the Pandora Papers shows that banks around the world helped their customers set up at least 3,926 offshore companies with the assistance of Alemán, Cordero, Galindo & Lee, a Panamanian law firm led by a former ambassador to the US. The document shows that the firm – also known as Alcogal – set up at least 312 companies in the British Virgin Islands for clients of an American financial services firm.
ATO to investigate Pandora Papers for any Australian links
In a statement on 4 October 2021, the ATO said it is aware of the Pandora Papers and will be analysing the information to identify any possible Australian links.
ATO Deputy Commissioner and Serious Financial Crime Taskforce (SFCT) Chief, Will Day, said the ATO will certainly look at this data set and compare it with the data the ATO already has to identify any potential connections. While the information in such data leaks is “interesting”, Mr Day noted that the ATO doesn’t rely on data leaks to do its job. “We detect, investigate and deal with offshore tax evasion year-round”, Mr Day said.
The ATO said it was important to remember that being included in a data leak doesn’t automatically mean that there has been tax evasion or crime. “There are a range of legitimate reasons that someone may have for an offshore bank account or structure”, Mr Day said. The ATO encouraged those who may have undeclared offshore income to contact the ATO.
This article was first published in Thomson Reuters’ Weekly Tax Bulletin.