Paradise Papers Leak – What You Need to Know

It was last year that the Panama Papers were leaked and the world was shocked at many of the names who were caught up in the entire scandal. It exposed the extent of the efforts the rich and famous will go in order to preserve their wealth and to reduce their tax bill.

It is now 18 months later and a fresh tax affair scandal has been exposed, with a similar wave of controversy surrounding it, this time being called the Paradise Papers. It was given this name simply due to the association with the tax havens or “tax paradises” that have been involved in this fresh scandal.

This latest leak began when 13.4 million confidential documents that were connected with offshore investments were received by a German newspaper, with a lot of the details being publicised on the 5th of November. It is believed that the original source of these documents are from Appleby, which is a law firm that is based offshore, Asiaciti Trust and Estera which are corporate service providers, as well as other businesses that are registered in a total of 19 tax jurisdictions.

There are more than 120,000 companies and individuals named in the documents. Just some of the noteworthy names caught up in this scandal include Queen Elizabeth II, Bono, Wilbur Ross and Apple. It has been estimated that in total, the amount of money being talked about in the Paradise Papers sums up to a massive $10 trillion.

It was a German newspaper called Süddeutsche Zeitung that received the Paradise Papers, 18 months after they received the Panama Papers and exposed them to the world. These documents are being carefully analysed now by the relevant authorities, as well as everyone in the media as more high-profile names are being exposed every day.

Many well-known businesses were named as having offshore companies which allow them to avoid taxes that are in the region of billions of dollars. Some of the well-known companies that possess offshore companies include Apple, Facebook, McDonald’s Walmart and Nike.

There have also been many international dignitaries, celebrities and supremely wealthy people named. The company at the centre of this storm is Appleby and they stand by their statement that these papers show no evidence of wrongdoing and everything was carried out in a legal and law abiding manner.

The key distinction is the fine line between tax evasion and tax avoidance. Tax evasion is a legal offence that involves illegally paying less tax than they owe the relevant state. Tax avoidance is the process of using loopholes in tax law in order to legally pay less tax.

These Papers that were leaked allegedly showcase how many major companies across the world have been exploiting offshore tax havens in order to reduce their tax bill. While those involved in the scandal have plead their innocence and insisted that this was all above board and is legal tax avoidance, there is certainly going to be numerous investigations into the legality of these measures.

It is definitely a story to keep your eye on as continues to develop. Remember, there were over 13.4 million documents that were leaked, so it will take time for people and the authorities to comb through them all.

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