Recently Pandora's paper was in the news, it contained names of 35 world leaders, 300 public officials, 100 billionaires, rockstars, sportspeople, and other business leaders from 90 countries including India. Let's see why some prominent public figures are included in the name?, Why this is different from the leaks in the past? and much more with me in this article.
As you saw above the sheer reach of this Particular paper, that's what differentiates it from leaks like the Panama paper which was tied with only the law firm Mossack Fonseca or the Paradise paper which was associated with another off-shore law firm, Appleby. And the reason behind the massive reach is that this is a collaboration of more than 600 journalists from 150 media outlets in 117 countries.
What are these off-shore firms?
Well, let's say because of them this whole thing exists. You might have heard of the wealthiest people have their accounts in Swiss Banks because their laws prevent them from sharing customers Information with any other third party, similarly, there are some places like the Cayman Islands, or the British Virgin Islands, where taxes are low and have become the hub of these off-shore firms. These firms operate from these hubs and provide services to wealthy individuals to incorporate shell companies, trusts, foundations in either no-or-low tax jurisdictions.
Is this even legal?
Believe it or not, it is legal. According to a report, "the global rich held in 2007 approximately $12 trillion of their wealth in tax havens". Tax Havens are nothing but a jurisdiction with low taxes levied.
So this means every name mentioned in these papers is guilty right?
Errr..... No, I mean that depends on further investigation. Like for instance take Sachin Tendulkar's name in Pandora papers, records indicated that Sachin and his some family members were beneficial owners of an off-shore entity in the British Virgin Islands. It was shut in 2016, and the family received close to around $2.68 million. But here, as argued by Sachin’s representatives, the family invested in full compliance with Indian Laws and declared it in his income tax returns. So, a thorough investigation is necessary to judge someone present in these papers guilty.
The above case was just one among hundreds mentioned in the papers. Papers like Pandora sheds light on the secretive world of Tax Havens. What is remaining to see is that how Indian Tax Authorities act on these investigations, or will they even act?
Well that's for them to decide, for now, if you
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Disclaimer - Above information is to spread financial literacy. We are not SEBI registered financial advisors, kindly consult your financial advisor before making any investment decision.