Paradise Papers

More than thirteen million papers were obtained by the German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and 94 media partners around the world. 

They relate to a firm called Appleby which was set up at the end of the 19th century in Bermuda and now has offices around the world.   

What these media partners had discovered were made public on Sunday 5 November 2017 and there have been further revelations over the subsequent days. 

This has been called the Paradise papers to reflect the French phrase for tax havens which is “paradis fiscaus”. 

These latest revelations follow on from the Pana Papers which were made public in April 2016. 

Michael Izza, Chief Executive at ICAEW, put up a blog on Tuesday 7 November The challenge of Paradise 

In addition to the comments of Michael Izza it is also worth putting the latest leaks in the context of all the work that has been going on internationally to coordinate improvements to the way domestic and international tax systems work as well as to create greater transparency and exchange of information between governments. 

The OECD Global Forum on Transparency and Exchange of Information now has 146 member countries signed up and more than 100 countries have committed to the automatic exchange of financial account information. The first exchanges were due to take place in September 2017 – for a list of the countries that have adopted the Common Reporting Standard (CRS) see here. It is early days and we await to see how it works in practice. 

It is also worth noting in the light of the various public comments about investment overseas that taking money abroad and investing it overseas have been legal, and acceptable, since the abolition of Exchange Controls in 1979. However if any resultant income and/or gains are not reported to the relevant tax authority, then that could amount to tax evasion. 

In recent years the UK has introduced a number of measures to address the non-reporting of offshore income and gains including both criminal and civil sanctions. In addition, since 30 September 2017, a corporate criminal offence has also been introduced for any firm or company that assists someone committing a tax evasion offence – for information on this see our previous news item.