Paradise Papers--What You Need to Know

Courtesy of Washington Post

Quick Info:

• Paradise Papers involves:
• Multinational corporations
• Politicians
• Elites
• World leaders

• Companies are investing in offshore companies to avoid paying billions of dollars in taxes.

• This trove of data covers nearly 40 years up to 2016.

• Paradise Papers are a leak of 13.4 million documents relating to 19 tax havens or “tax paradises" from 2 offshore providers:
• Appleby
• Asiaciti Trust

• Few corporations that own offshore companies to avoid paying billions in taxes:
• Facebook
• Nike
• Apple
• Uber
• Walmart
• Allianz Siemens
• McDonalds
• Yahoo!
• Allergen
• Goldman Sachs
• Twitter
• Bayer
• Amazon

• Few individuals whose names are listed:
• Queen Elizabeth II
• Rex Tillerson--US Secretary of State
• Wilbur Ross--US Secretary of Commerce
• Queen Noor of Jordan
• Juan Manuel Santos--President of Colombia
• Robert Mercer--MAJOR Republican donor
• Sheldon Adelson--MAJOR Republican donor
• Madonna--American singer
• Amitabh Bachchan--Indian actor

What are Tax Havens?

• Commonly referred to as tax shelters or offshore havens have few regulations on income.
• Although they are incredibly controversial--they are not illegal. 

• The promise of tax havens is secrecy--
• Offshore locales create and oversee companies that often are difficult, or impossible, to trace back to their owners.
• The built-in secrecy attracts:
• Money launderers
• Drug traffickers
• Kleptocrats 

• Offshore companies--or “shells”-- are companies with no employees or office space.

• Appleby is a member of the “Offshore Magic Circle,”--an informal clique of the planet’s leading offshore law practices
• The firm was founded Bermuda but has offices in:
• Hong Kong
• Shanghai
• the British Virgin Islands
• the Cayman Islands and other offshore centers

Why We Should Care:

• The amount of money involved is HUGE.
•  Boston Consulting Group (BCG) estimates $10 trillion are held in these offshore financial centers.
• Around half of that $10 trillion sum is concentrated not in the rich, but in the mega-rich.   
• The 0.001 percent of households.

• It is more than inequality and a lack of fairness-
• The offshore financial system is incredibly secretive--
• This enables the wealthy and powerful to hide their dealings and break the law.

• Ireland, Switzerland and the Netherlands have become known for using taxation loopholes to attract corporations and the world’s richest--
• Practices that cost their neighbors billions of dollars in revenue every year.

• Europe-- $78 billion in tax revenues lost due to offshore tax avoidance.

• USA-- $35 billion in tax revenues lost due to offshore tax avoidance.

• Asia-- $34 billion in tax revenues lost due to offshore tax avoidance.

• Latin America--$21 billion in tax revenues lost due to offshore tax avoidance.

• Africa-- $14 billion in tax revenues lost due to offshore tax avoidance.