Earlier this month, an unprecedented leak of confidential information made headlines across the globe. Millions of documents from Panamanian law firm Mossack Fonseca were provided to the German newspaper Sueddeutsche Zeitung. The International Consortium of Investigative Journalists alongside some 400 journalists began analysing the enormous amount of data in early 2015, a year before any information relating to the leak was published.
The Panama Papers have revealed details of offshore financial arrangements which shed light on the highly complex areas of tax avoidance and money laundering. Leading politicians and sports stars have been named alongside international criminals as clients of Mossack Fonseca.
Tax avoidance and money laundering has been the subject of much media attention, and is often considered a serious scourge on the modern world. Some of the world’s richest and most powerful people use offshore companies to hide assets and income from their respective governments.
But not all offshore companies are created or used for illegal purposes. In fact, many businesses have perfectly legitimate reasons for concealing their identity and assets from malicious competitors and enemies. Unfortunately, leaks such as this fail to distinguish between the illegal and the unethical. There is, and should be, a distinct line between the two. Tax evasion is illegal; tax avoidance is completely legal.
Our government has legislated a detailed and comprehensive set of rules that Australian businesses are required to follow. Most companies comply with the rules and regulations that govern their industry. Since 2006, however, the Australian Tax Office has recovered over $1 billion through its crime investigation activities. Whether or not a company has met their tax obligations is often a complex question which involves significant factual and legal analysis. Rather than allowing popular and often misguided opinion dictate the state of Australian taxation, objectivity must be maintained in the executive and judicial branches of government.
Robertson O’Gorman has extensive experience representing those charged or investigated for financial and corporate crime. Call us today on 3034 0000.