Black Money Crackdown

Linking Offshore Structures To Tax Evasion: A Case Of Mistaken Identity.

Frictions between the two are bound to arise and sensationalism of the likes of “Panama and Paradise Papers” will accentuate challenges for legitimate tax-compliant investors and tax administrators

The BBC noted that the name “Paradise Papers” dovetails well with the French term for a tax haven, paradis fiscal. Recently, 13.4 million documents with over 1.4 terabytes of leaked data of an offshore law firm, Appleby, found its way to Wikipedia. The data leaked (by hackers) to a German newspaper comprised the most guarded investments and funding structures of over 120,000 businesses and individuals, not even sparing the world’s powerful monarchs, political leaders and most valued companies. The data shared with the International Consortium of Investigative Journalists (ICIJ), a network of 380 journalists working collaboratively, made headlines to rattle administrations, leading countries such as Spain and India to order official enquiries and possible investigations. The Paradise Papers, as the recent leaks are labeled, coming after the Panama Papers of 2016, are more about theatrics and less about content. The media tendency in such situations is to sensationalize news, painting all and sundry with the same brush—tax dodgers and money launderers are all treated on par with businesses that have legitimate structures. To associate offshore structures solely with crime, tax evasion, corruption and other illicit activities is a case of mistaken identity. In contrast, most are legitimate business structures created either to avail benefit of tax treaties signed between sovereign states or state aids to locate businesses in specified jurisdictions. At times, the nature of activities demand creation of pooling structures in jurisdictions which are neutral but have robust regulatory compliances.