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'Panama Papers' Group Strikes Again with 'Paradise Papers' (theguardian.com) 402

Long-time Slashdot reader Freshly Exhumed tipped us off to a new document leak that's just revealed massive tax havens used by the world's most wealthy and powerful people. An anonymous reader quotes the Guardian: The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Suddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times. The project has been called the Paradise Papers.
It's the same group responsible for the Panama Papers, and the Guardian reports that in these 13.4 million new files, journalists have discovered:
  • "Aggressive tax avoidance by multinational corporations, including Nike and Apple."

"The publication of this investigation, for which more than 380 journalists have spent a year combing through data that stretches back 70 years, comes at a time of growing global income inequality," reports the Guardian. "Meanwhile, multinational companies are shifting a growing share of profits offshore -- €600 billion in the last year alone -- the leading economist Gabriel Zucman will reveal in a study to be published later this week. "Tax havens are one of the key engines of the rise in global inequality," he said."

'Panama Papers' Group Strikes Again with 'Paradise Papers'

Comments Filter:
  • by Anonymous Coward on Sunday November 05, 2017 @07:57PM (#55495937)

    Now that tax avoidance is proven to work we should all do it. It's irresponsible to pay money when you don't have to. You don't send an extra $100 to your cable provider just because, do you?

    • by turkeydance ( 1266624 ) on Sunday November 05, 2017 @08:03PM (#55495959)
      agreed. AVOIDance is legal. EVASION is not. i avoid with cash payments. i don't evade, unless TurboTax does.
      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Technically true, but still though, there's something to be said lobbying so that the definition of those terms is in your favor. If the wealthy shuffling profits to the Caymans or wherever isn't tax evasion, then the rest of us should be able to do the same thing with our taxes by sticking our W-2s under large rock. Somehow, laws are written such that only one of those, the option afforded the wealthy, is acceptable, and I think that's what people take issue with.

      • by Swave An deBwoner ( 907414 ) on Sunday November 05, 2017 @08:45PM (#55496145)

        Using cash to avoid payment of taxes is in fact evasion.

        And the IRS pays finders fees to folks who assist them in obtaining evidence of the act.

        • And they keep increasing the bounty every year. I'm honestly just waiting 'til the bounty is higher than the fine to see how people start cheating on their taxes and then turn themselves in because it makes them pay less.

      • by raymorris ( 2726007 ) on Sunday November 05, 2017 @08:46PM (#55496147) Journal

        > i avoid with cash payments. i don't evade, unless TurboTax does.

        You're not just guilty of evasion, but the *felony* variety.
        If you accept cash payments and intentionally don't file a return showing those payments, that's misdemeanor tax evasion. When you file a return which says "total income... Under penalty of perjury" which you know does not accurately include those cash payments, that's FELONY tax evasion.

        https://www.irs.gov/compliance... [irs.gov]

        Common tax avoidance methods include 401k, IRA, HSA, and FSA.

      • Actually using cash to avoid is textbook case of tax evasion as is most definitely not legal.
    • Now that tax avoidance is proven to work we should all do it

      Tax avoidance has always worked.

      It's irresponsible to pay money when you don't have to.

      It actually is, or else the rules will never be changed.

    • by ceoyoyo ( 59147 )

      Not doing the right thing unless compelled is pretty much the definition of irresponsibility.

  • by WindBourne ( 631190 ) on Sunday November 05, 2017 @08:05PM (#55495975) Journal
    China charges 20% vat on everything, along with hefty tariffs on Western imports. Mexico charges 17% tariffs and then gives 100 % tax break to most local companies, which includes the vat. Most of Europe has 15-20% vats , combined with corporate taxes, even if companies operate outside of the nation. America needs to do a 0 corporate tax on American made goods/services (start at 50% and raise to 80% by 5 each year ). Keep 35% corporate tax on.foreign goods and apply a 20% vat on everything esp imported goods/parts/services. This will put a stop to this BS.
    • by Anonymous Coward

      Imagine if the US put hefty tariffs on everything that was imported to "even" the playing field...many of the world's economies would suffer. Taxes aren't a one-size fits all. Ever wonder how many jobs would be eliminated if everything was simplified? Complexity==jobs

      • Re: (Score:2, Insightful)

        Imagine if the US put hefty tariffs on everything

        VATs are not tariffs. Chinese companies pay VAT on products sold in China, but not on exports. American companies pay income tax on all their sales.

        China taxes consumption. America taxes production. So they build, we buy. This is a major reason why we have massive deficits and debts.

        Corporate income taxes should be abolished and replaced with a VAT and a border adjustment tax [investopedia.com].

    • by locater16 ( 2326718 ) on Sunday November 05, 2017 @10:02PM (#55496489)
      Tariffs are for people that don't have a clue how economics work. Your phone, your food, your car, your clothes are all cheap because you get them from wherever the cheapest source in the world is delivered to you without interference from the government. It doesn't help pay taxes, it never could, and even if it did all the things taxes pay for would cost more to begin with so you'd never get "more" out of that revenue to begin with.

      BTW Britain, France, and plenty of other places use VATs and hey look at all the tax avoidance while Apple's profits go to Ireland! You are on top of the Dunning-Kruger effect in economics if you think VATs or Tarrifs have anything to do with tax avoidance or evasion.
      • by AmiMoJo ( 196126 )

        The EU has a simple and effective plan: companies pay corporation tax where they do business. If Starbucks sells one of their foul coffees to some unlucky Frenchman, it doesn't matter if they have to pay crippling licencing fees to an Irish parent company and end up losing money. The French tax authority just looks at the profit that the Irish company made on a sale in France, and charges the French subsidiary tax based on that amount.

        Companies can either comply or go bust.

    • by Anubis IV ( 1279820 ) on Sunday November 05, 2017 @08:32PM (#55496073)

      I seem to recall the Prime Minister of India being ousted as a result of the Panama Papers. So, not exactly nothing.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        I know they all look alike ;-) but it was actually the PM of Pakistan in this case. A couple of famous film stars were smacked around by the Indian media for offshoring a bunch of their investments. The panama papers also took down Iceland's PM and had Cameron suffering from foot-in-mouth disease for a while.

        • They not only look alike, they're also very obviously fully fungible. Or did you notice any kind of difference when this one got tossed out and that one posed as the drop-in replacement?

          Granted, that has little to do with being Indian or Pakistani, that's more a feature of politician. That's also why political murder has gone out of fashion. Why bother putting a hole in this sock puppet, it's the same as the sock puppet replacing it.

      • by AmiMoJo ( 196126 ) <mojo&world3,net> on Monday November 06, 2017 @08:09AM (#55498199) Homepage Journal

        They badly damaged Marine Le Pen, the far-right candidate in France's last election.

        The Icelandic government lead by Sigmundur Gunnlaugsson was brought down by information in those leaks.

        We learned a lot about how Russia's leaders and their friends hide wealth and funnel it covertly overseas, to interfere in the democratic processes of other nations.

        The investigation of FIFA was aided by the release, resulting in raids on their offices in Switzerland. A lot of the bribery that was going on was only proven by these papers becoming available.

        Ukraine's government fell apart due to the leaks.

        The impeachment of Brazilian president Dilma Rousseff was in no small part due to the Panama Papers, and several members of her government and the Brazilian state have been prosecuted.

        That's all I can remember off the top of my head, but Wikipeida has a really, really long list: https://en.wikipedia.org/wiki/... [wikipedia.org]

    • by alvinrod ( 889928 ) on Sunday November 05, 2017 @08:45PM (#55496143)
      Well the journalist who uncovered it died when her vehicle blew up. I'm pretty sure she didn't drive a Pinto so I'm a little but suspicious about the whole ordeal, but it was a pretty big result for her.

      More seriously though, the problem is that they're all dirty. Republicans, Democrats, everyone. That makes it easy for any side to ignore the misdeeds of their own and sling mud at the other side. That's why nothing really comes of it, because they all know that they're all dirty, so they can't really go after each other in any serious manner.

      Even more seriously though, what the fuck did everyone expect. No one wants to pay high taxes. The people that make most of the money realize how much the government sucks at doing most (not all, just most) of things it tries to do, and the people who are wealthy and okay with high taxes because they can accomplish some good would probably be just as well (if not better) off taking their money and doing it themselves. If you want companies to pay taxes, apply market principles to this situation as well and assume that people will shop around for better deals. Lower tax rates to make it less profitable for companies to try to off shore profits and they'll gladly take the path of least resistance.
      • by Cl1mh4224rd ( 265427 ) on Sunday November 05, 2017 @10:02PM (#55496491)

        Lower tax rates to make it less profitable for companies to try to off shore profits and they'll gladly take the path of least resistance.

        Lower them to what? People keep saying that, but nobody offers a number. Where's that sweet spot that gets the government more money in taxes and saves these large corporations money? Does it even exist? Advocates simply assume that it must, but nobody seems to care to know.

        • by Gussington ( 4512999 ) on Sunday November 05, 2017 @11:16PM (#55496739)

          Lower them to what? People keep saying that, but nobody offers a number. Where's that sweet spot that gets the government more money in taxes and saves these large corporations money? Does it even exist? Advocates simply assume that it must, but nobody seems to care to know.

          Like smaller government. Non-one seems to offer up a suitable number of smallness, but it sounds great to shout that phrase around at every opportunity.
          Apparently if the Government was reduced to 1 person, and tax was 0.1%, we'd all be better off somehow...

      • " Lower tax rates to make it less profitable for companies to try to off shore profits and they'll gladly take the path of least resistance." So, basically, turn America into even more of a tax haven than it already is? Winning!
    • The previous President of Iceland [wikipedia.org] would beg to differ.

  • And? (Score:5, Funny)

    by darth dickinson ( 169021 ) on Sunday November 05, 2017 @08:16PM (#55495995) Homepage

    Wake me when we will actually do something about it.

  • 380 journalists (Score:2, Interesting)

    by Anonymous Coward

    Are they going to release the source material to the public so that we can find anything that the 380 journalists "accidentally" missed or forgot to report in their zeal to be completely unbiased and impartial while on the payroll of major news organizations?

  • by Anonymous Coward

    How can we have good government if every fucking official is dirty? Clinton, Podesta, Trumps crew, all filthy. Whatâ(TM)s a responsible citizen who wants reasonable government to do?

  • I'll bet when the Richard Bransons and Bill Gates and Warren Buffetts of the world get together and talk about their grand schemes they laugh at the little people who make it all possible.
  • by DontBeAMoran ( 4843879 ) on Sunday November 05, 2017 @09:05PM (#55496249)

    "The tax-avoiding Cayman Islands trust managed by the Canadian prime minister Justin Trudeau's chief moneyman."

    Yeah! Canada!

    Wait... what?

    • Stephen Bronfman and a trust fund he is involved with appear to have avoided Canadian, US and Israeli taxes. I love how the media, instead of starting with his name mention that he is a friend and head of election fund raising for the Canadian prime minister. I'll wait and find out if the anyone in the governing party knew about it. If they have I expect resignations at the very least.
    • The average Canadian Liberal voter probably has this for a thought process reading through the events of the summary in order:
      1. Oh no! Those slimeballs!
      2. Aha! Trump is mentioned! More proof he's basically the worst person ever!!
      3. (Finally reading the line you quote) Well, this is just a rogue individual and doesn't reflect on how awesome Trudeau is.
  • by buss_error ( 142273 ) on Sunday November 05, 2017 @09:12PM (#55496265) Homepage Journal

    Aggressive tax avoidance by multinational corporations, including Nike and Apple.

    It is legal in the US to avoid paying a tax. It is not legal to evade a tax, however.
    What's the difference?

    Burger King was "bought" by Horton's, a Canadian company, and licenses back all the Burger King IP from Horton. If this consumes effectively most of the profit, Burger King can legally not pay US taxes on it's income. (Previous statement is opinion, assuming facts I have not verified.) This is why I don't go to Burger King anymore.

    It is my understanding that Apple does that as well, but again, I have not verified it to be factual, and is thus to be considered opinion. This is why I don't purchase Apple products.

    This would appear to be completely allowed within the US tax code. (I am not a tax professional, if you want to do this, you should purchase an opinion from a licensed tax professional.)

    What is not legal is for company Blah to use false accounting to evade a tax. That will get you an orange jumpsuit and those fetching chrome bracelets.

  • "...multinational companies are shifting a growing share of profits offshore -- â600 billion in the last year alone..."

    So what, exactly, is "offshore" for a multinational? The moon? Another planet?
    • Offshore is a small shithole country that does virtually nothing but run a bank with low taxes, but is recognized as a country.

      The Cook islands, despite only having 17 thousand people, likely stores many hundreds of millions to several billions worth of US dollars, despite requiring several million/year in foreign aid to keep its residents at a reasonable standard of living.

      An estimated 1 teradollars is hiding around places like that.

      • by msauve ( 701917 )
        So? The only use for money is to spend it. And the world banks try to maintain a minimum level of inflation, for bad reasons. So whatever is stored in such counties is completely and utterly useless until it's moved to a first world country to be spent, diminished by the cost of inflation.
      • Offshore is a small shithole country that does virtually nothing but run a bank with low taxes, but is recognized as a country.

        Sort of like Delaware is recognized as a state?

  • by Freshly Exhumed ( 105597 ) on Monday November 06, 2017 @01:35AM (#55497139) Homepage

    If you are one of those who praises tax avoidance as a laudable life goal, you are a freeloading, coat-tail riding maladroit.

    The biggest value of the data dump is that an otherwise closed doorway into a strange world in which the 1%ers exist is suddenly thrown open to show that monetary enrichment dissolves any and all notions of patriotism and shared values.

    Sociopaths will continue to praise their own legal proprietary, and imbeciles will continue to cheer on their beloved sociopaths, but those who try to live and excel while doing their share to make their own lives and the world they live in better get chumped again and again by an evil breed. This data dump helps to see this much clearly.

    It is not about some phoney notion that tax avoidance is somehow laudable; it is about exposing corruption.

    • Re: (Score:3, Insightful)

      by Baron_Yam ( 643147 )

      Tax avoidance being a problem means the tax laws need to be rewritten. Expecting people not to keep as much of their wealth as possible within the law is foolish. You 'avoid' taxes every time you claim a deduction... go ahead, tell me you never claim a deduction on your taxes...

      Tax evasion, on the other hand... that's effectively treason, since you're not giving your share as required by the laws of the society within which you generated your wealth in the first place. Tax evasion makes you a parasite.


      • "Expecting people not to keep as much of their wealth as possible within the law is foolish."

        No, that's incorrect. Expecting people not to pay their fair share as possible within the law is foolish. No freeloaders, no coat-tail-riders, no overgrown babies who never learned that sharing is critical to their own existence. No excuses.

        • The law defines what your fair share is; you're setting an overriding, undocumented, vague 'standard' and then complaining when people don't meet it.

  • by Tom ( 822 ) on Monday November 06, 2017 @02:20AM (#55497241) Homepage Journal

    Here's the thing that most people don't get:

    The modern elites are not nation-bound anymore. They live on yachts in international waters, fly around the world in private planes (or state-owned ones) and have their money in several different tax heavens and jurisdictions so that no amount of sanctions or other problems can shut them down.

    If you honestly think any of them care about your country or my country or whatever todays "axis of evil" is, you are a complete idiot. The only thing they care about is money and power, which is why they have it. If you focus your entire life around the question of "how do I get more money?" then you have a much higher chance of making it than us normal people who are burdened with ethics, friends (real friends, not just useful contacts) and a soul or whatever you want to call that piece of humanity inside of you.

    We have a brilliant example in my home country, which has been ruled for over a decade now by a person whose only demonstrated skill is how to get and keep power.

    Really, all of this is so clear to anyone with three working brain cells, as they're not even trying to hide anything anymore. The only question we all should be asking ourselves is how to shut down this global robbery.

  • by hyades1 ( 1149581 ) <hyades1@hotmail.com> on Monday November 06, 2017 @02:55AM (#55497301)

    From TFA: "Ross, a billionaire and close friend of Trump, retained holdings in Navigator after taking office this year. The relationship means he stands to benefit from the operations of a Russian company run by Putin's family and close allies, some of whom are under US sanctions.

    Of course the Commerce Secretary wouldn't have much say in trade regulations, would he?

  • by hyades1 ( 1149581 ) <hyades1@hotmail.com> on Monday November 06, 2017 @06:22AM (#55497847)

    TFA mentions that Donald Trump's close friend and Commerce Secretary Wilbur Ross "stands to benefit from the operations of a Russian company run by Putin's family and close allies, some of whom are under US sanctions."

    The link it provides is also pretty damning: https://www.theguardian.com/ne... [theguardian.com]

    I suspect real Americans take a dim view of a high administration official who maintains financial ties to companies being sanctioned by the US government.

  • by nealric ( 3647765 ) on Monday November 06, 2017 @08:52AM (#55498379)

    I am a tax corporate attorney. My job is to ensure that a Fortune 500 company does not pay more tax than legally owed. When operating internationally, half the game is just making sure you don't get hosed and end up getting double-taxed by two different jurisdictions or not being allowed to use a big loss you have suffered to offset a gain elsewhere- so when I say more than "legally owed" I do not mean more than technically owed after some complected scheme is executed.

    These stories tend to confuse tax evasion, tax avoidance, and money laundering. While an offshore company may be used for any of those things, the mere use of an offshore company doesn't necessarily mean a company or person is engaging in any of them.

    In my business, we use offshore companies as neutral third locations. For example, if we need to operate in a dodgy part of Africa, we likely don't want to form a subsidiary in that country because such countries often lack robust corporate law and because it can be very administratively burdensome to form a new company there. The Caymans offers robust corporate law, a functioning court system, quick setup, and quick dissolution. There are both tax and non-tax reasons not to use a U.S. company for that purpose. If we were to sell that subsidiary, a foreign buyer may not want to purchase a U.S. company with all of the administrative and legal burden that comes with owning one. Tax-wise, using a non-U.S. entity prevents that company from being taxed in both the U.S. and the operating country. It would still be subject to U.S. tax if it sends money to the U.S. parent, but it's usually possible to manage tax attributes and cash so that's not necessary.

    A tax avoidance motive might be something like an earnings-stripping transaction where intellectual property is licensed to a low-tax country. However, the tax code hardly allows carte-blanche for doing transactions like this, and the time has long passed when you could just set up a Cayman company with no employees that holds all of your intellectual property. Large companies are audited every single year or are under a continuous audit program the IRS runs- nobody in the world of big business "gets away" with something- everything must be legally justified. As a result, the most aggressive tax avoidance transactions tend to be seen from medium sized privately held businesses and high net worth individuals- not large public companies.

    For individuals without extensive business operations, offshore companies rarely offer any legal tax benefit. As an individual, you are still subject to worldwide taxation. Rules such as the personal foreign holding company rules in the tax code are specifically designed to prevent offshore companies from being used for personal tax avoidance.

    You will find individuals who use offshore company for straight-up tax evasion. This is one of the things Paul Manefort was indicted for. Legally, you must declare offshore accounts- and he allegedly did not. Laws such as FATCA and foreign equivalents are making this strategy tougher to pull off because they require tax withholding on transfer to an offshore location if the individual refuses to provide information necessary to report the transaction to the tax authorities.

    Finally, you will find offshore accounts used for money laundering. That is a very different type of operation from multinationals using them for a legal benefit. It's worth noting that not all offshore locations are created equal in this regard. Jurisdictions like the Caymans and Bermuda have extensive anti-money laundering laws that they do their best to enforce. As a result, most Cayman and Bermuda companies are subsidiaries of legitimate business. By contrast, a fortune 500 company would almost never use Panama for a subsidiary unless it was actually doing business in-country.

    TLDR: Articles like this talk about offshore companies as if they are always illegitimate and treat tax avoidance, tax evasion, and money laundering as the same thing. There are both legitimate and illegitimate uses of offshore companies, and each of these things are separate phenomena.

What the gods would destroy they first submit to an IEEE standards committee.