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THIS WEEK, A trove of documents were released detailing how massive corporations and high-earning individuals move their incomes around the world to avoid paying high rates of tax.
Dubbed the Paradise Papers, they were first published in the German newspaper Süddeutsche Zeitung, revealing 13.4 million documents from 120,000 clients of the Bermuda law firm Appleby.
According to the BBC, the name “Paradise Papers” was chosen because of the “idyllic profiles of many of the offshore jurisdictions whose workings are unveiled”, while also dovetailing “nicely with the French term for a tax haven – paradis fiscal“.
The documents were then shared with the International Consortium of Independent Journalists leading to a series of stories about how companies move money around the world to avoid tax.
What’s important to note about the Paradise Papers, is this kind of activity is legal – they’re a series of tax loopholes that many argue is just smart. It does however shed a light on private interests of the royals, celebrities, and companies and their operations, as well as spark a debate about whether a more comprehensive tax law is needed.
It’s also sparked a debate about whether it’s moral to publish tax documents and legal advise indiscriminately, and whether the right to privacy lessens with the more money and influence an individual, or a business, has.
So in case you missed the onslaught of stories that have been coming out over the past week, here’s a quick recap:
The Irish links
U2 frontman Bono is shown in the leak to own a stake in a Maltese company that bought in 2007 a Lithuanian shopping mall via a Lithuanian holding company, which may have broken tax rules by using an unlawful accounting technique.
The singer later issued a statement to say that he was “distressed” by the leaked documents.
He said he had been “assured by those running the company that it is fully tax compliant”.
Apple and Google have both been asked to appear before the Public Accounts Committee next year following the Paradise Papers revelations.
According to the Guardian, documents show that Apple reacted to criticism of its tax affairs by secretly moving parts of its business to the island of Jersey, which offers attractive tax structures.
Meanwhile, the BBC reported that three cast members of Dublin comedian Brendan O’Carroll’s hit sitcom, Mrs Brown’s Boys, had diverted millions of pounds through a tax-friendly offshore scheme.
According to the British broadcaster – which airs the Bafta award-winning comedy – Patrick Houlihan and husband and wife Martin and Fiona Delany had transferred more than £2 million in fees into a Mauritius-based trust and sent the money back as loans.
Fiona Delany is the real-life daughter of O’Carroll and stars as Maria Brown on the show. Her husband, Martin, plays Trevor, while Houlihan plays Dermot Brown.
Houlihan gave an interview to the Irish Times, a partner of the ICIJ, in which he claimed he doesn’t understand the tax scheme used for part of his income.
The Irish Times reported that the Paradise Papers showed that many corporate activities by business tycoon Denis O’Brien are conducted through companies housed in the Isle of Man.
The self-governing island has a zero corporation tax rate and charges no capital gains tax nor stamp duty. The British crown dependency has denied it is a tax haven, while there is no suggestion that any of the structures reportedly used by O’Brien are unlawful.
O’Brien hasn’t yet responded to the reports.
Politics
Queen Elizabeth II has, through the Duchy of Lancaster which provides her income and handles her investments, placed around €11.3 million of her private money in funds held in the Cayman Islands and Bermuda.
The funds were reinvested in an array of businesses, including controversial rent-to-own retailer BrightHouse which has been accused of exploiting the poor.
Her son, Prince Charles, has invested millions of pounds in offshore funds and businesses, including a Bermuda-based sustainable forestry company once run by a close friend.
The US Commerce Secretary Wilbur Ross holds a 31% stake in maritime transport company Navigator Holdings through a complex web of offshore investments.
In Canada, Prime Minister Justin Trudeau‘s top fundraiser and senior advisor Stephen Bronfman, heir to the Seagram fortune, moved some $60 million to an offshore haven in the Cayman Islands.
Brazil’s economy and agriculture ministers, Henrique Meirelles and Blairo Maggi, are also cited in offshore companies in tax havens.
Celebrities
Pop star Madonna bought shares in a medical supplies firm, according to the New York Times, while Radio France said she had invested in a firm that gained from taxes on virtually non-existent capital gains.
Britain’s four-time Formula One champion Lewis Hamilton avoided paying taxes on a private jet, receiving a £3.3 million Vat refund in 2013 after it was imported into the Isle of Man, a low-tax British Crown Dependency.
Colombian singer Shakira who lives in Barcelona, was domiciled in the Bahamas for tax reasons and transferred 31.6 million euros earned in royalties to Malta, France’s Le Monde newspaper said.
Multinationals
US sportswear giant Nike used a loophole in Dutch fiscal law to reduce, via two companies based in the Netherlands, its tax rate in Europe to just two percent compared to the 25% average for European companies.
The taxi-hailing app Uber and the manufacturer of Botox, the Allergan pharmaceutical laboratory, allegedly used similar methods to Nike.
The Paradise Papers also revealed that Russian companies with links to the Kremlin invested hundreds of millions of dollars in Twitter and Facebook.
- With reporting from AFP and Fora.ie
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Tax loopholes are deliberately set up by governments for rich individuals and businesses to take of advantage of. So by definition there’s nothing illegal here. If you want something to change you need to elect a government that will tax the rich but most parties say that’s impossible.
@ed w: If rich people don’t have to pay tax, why should anyone else?
@Zx5vZulB: because the government work for the rich people. The poor people work for the government
If there was illegal activities, such as banned accounting practices, where there is no enforcement there is no law! Again demonstrating the lack of accountability with white collar crime, which is still a crime least those in
Power forget.
“It’s also sparked a debate about whether it’s moral to publish tax documents and legal advise indiscriminately”
It’s definitely moral (and not “indiscriminate”…) to leak these details if people are deliberately circumventing paying taxes and contributing financially to society like everybody else. There’s nothing that undermines public confidence in paying their fair share more than seeing the people who are most able to pay get away with financial murder.
Privacy is important. So is paying your taxes. If you are concerned about your private accounts being leaked, then stop messing about and contribute like the rest of us and you won’t have anything to worry about. Or go live in blasted Bermuda where there are no public services to pay for.
Why aren’t the streets in Dublin or the likes full of protest about the Paradise Papers?
In striking contrast to the bombshell release of the Panama Papers in mid-2016 that immediately triggered a 10,000-person-strong protest in Iceland leading to the resignation of Prime Minister Sigmundur Davíð Gunnlaugsson, the Paradise Papers have thus far made many headlines but no uprisings, not in Ireland either, how come? For your conscience, time to act now, and hold the rich and also famous up to account for tax avoidance, legal or not. Source: https://www.theguardian.com/commentisfree/2017/nov/10/protest-paradise-papers-micah-white
@Gerben Uunk: Eh because Ireland benefits from tax loopholes.
@Gerben Uunk: because this is Ireland. People expect to be done over by the rich. What gets me is them lording around telling us which charity they supported. The rest of us don’t get a choice, just plan old public services or health or homeless for us tax payers. We could do with a did out, if the rich are listening.
@Gerben Uunk: Because it’s a bit odd protesting something that is legal. These people/companies have smart accountants. If your accountant came to you and said I can give you an extra €500 income and it’s legal (due to legal tax avoidance practices), would you say ‘no’?
@Melissa O’Callaghan: Thanks a million Melissa, sound reply! We need real accountability by the rich & famous in Ireland, how come that they can can hide behind tax loopholes at full extend. Wonder how many Oireachtas members TD’s and Senators, as well Cllr’s we can chase for this kind of tax avoidance.
The Irish are well used to being trodden on. First the British, now the Irish. They moan but will do nothing. Anyone that stands against the status quo is labeled a thug or terrorist by the powers that be.
@Gerben Uunk: imagine how little corporations pay in bangladesh 30 euros a month …NIKE sicken me.i wish we had a world wide campaign to BLACKLIST low salary mu,tinationals
@Shakka1244: the irish farmer has being trodding on us for years with benefits and vat abuse//GRANT GENIUSES..
Legal, it may be, based on loopholes but it’s morally disgusting. A fair tax on rich individuals and corporations can reduce taxes for those struggling at the bottom. Bono & Co should be apologising and ashamed, not making up excuses. Feigned ignorance is no excuse to hide behind, neither in legal nor moral matters. There are ethical investor management companies rich people can turn to if they don’t have time to do the research themselves.
Turns out that a lot of the rich Brexiteers were less than patriotic in the matter of paying taxes but then again that is to be expected and I am sure, at some stage, the leak will hit its target.
@Gerald Kelleher:
Who do you mean that was for brexit but doesn’t pay tax there. Genuine question.
@Maurice Bourke: there are a fair few that contributed a lot of money to the Brexit campaign
I read their last boom called the Panama papers a few months back.
Whole sale tax avasion but iv yet to hear of any one convicted.
Tax cheats cheat us all. Are you listening Leo? Will we need a publicity campaign on the side of buses costing enough to put three people in employment for a year for you to take action on this?
It’s time to tax passports at a flat rate of income with no deductions. Similar should be done for corporations at inception and upon transfers abroad
@iohanx: what about people with multiple passports?
It is interesting to note that instead of congratulating Bono et al for keeping their hard earned monies away from the circus that that is the Irish Treasury, some people are commenting on the unfairness of it all. Get a life or better still go into business and try to reconcile the long hard hours you have to work with the lazy, licentious layabouts that populate this country taking what they can from the State and ultimately the wealth creators who employ the people who pay too much tax. Focus your attention on the millions wasted each week paying useless civil servants who are unemployable in the private sector and the handout generation who cannot work because of the loss of benefits. Sort that and then we can have a genuine conversation about tax avoidance but then again our taxes would be so low we would not need that conversation.
@: You think if we sorted out useless civil servants and benefit scroungers we’d have barely any taxes? Do you think the health service and the school system run on thin air, or what?
Anyone that saw Panorama investigates on BBC last night will have saw the documents uncovered about Apple which conclusively shows the Irish Government KNOWINGLY helped to enable Apple to use Ireland as an offshore tax haven to avoid paying tax in other countries, the evidence unearthed makes a mockery of what this government has told us to date and once the rather slow Irish media catch up the information will surely cause the Government to fall followed by Criminal investigation!
Brendan O’Carrol, his daughter and daughters partner are all seriously indicated in wide scale tax avoidance the spit is going to hit the fan!
all a bit of a damp squib really… no one cares as is evidence across all social media
@frank sullivan:
Yeah!
Why are you commenting on the “damp squib” then. Your standard of trolling needs upgrading.
@Christy Nolan: I’ll comment on whatever i want whenever i want, if it annoy you well then that just an added bonus inst it LOL
@frank sullivan:
You searched all social media for this “damp squib”. Enjoy your trolling. It doesn’t annoy me but the “damp squib” obviously affects you.
The thing is if we were all told about these loopholes and tax avoidance measures we would all be on the bandwagon, queing around the corner to sign up. Fair balls to them
Well I think if there aren’t enough jobs left after the robots have taken over, then perhaps the rich could start paying their fair share of tax and the hospitals would still be functioning.
Just because you say its legal, does not mean it is legal. That’s what we have courts for. And that’s why the secrecy is so important, because if the Revenue Comissioners don’t know about your what you are doing with your money, then they can’t challenge it. The media is really falling down on this point.
have your say