- Tax avoidance schemes are being offered up to the wealthy like holiday packages.
- The number of companies offering these packages appears to have risen, and the trend was noticed within last year’s Paradise Papers.
- These packages allow third-party companies to profit off tax havens while operating in a legal grey area.
Tax-avoidance schemes, that include creating offshore accounts in tax-free countries, are being offered to the wealthy like holiday packages.
A screenshot of the TMS Group’s “International Business Company Packages” page shows several plans – called “The Indian Ocean,” “The Caribbean,” and “The Oasis” – being offered to businesses or individuals shopping around for the best place to open up an offshore account.
Two of the packages promote setting up a company in one country, then creating a business address and offshore bank account in two more countries. Seychelles and Belize are offered as possible locations for the company set-up, while Malaysia is the chosen country for business addresses.
Another site, Offshore Desk, offers a $A2,870 “Seychelles Package,” allowing taxpayers of any country to incorporate a business in Seychelles and a bank account in Cyprus.
Like TMS, the package ad features a photo of a tropical island, and promises “zero taxation…alongside a quick, inexpensive and hassle-free formation process.”
Similar packages for offshore accounts in Vanuatu and Delaware, are shown on the site accompanied by flashy photos and low-cost promises.
Another intermediary site offers enticing Gold, Silver and Bronze packages to businesses looking to minimise taxes.
The company, aptly titled Offshore Simple, assures buyers it has many solutions for setting up an offshore bank account. The Bronze package, which includes a company and bank account in Seychelles, Belize and Panama, is currently selling at a discounted price of €999 $A1,526. The Silver package, which costs $A1,984 gives customers the Bronze package plus a UK address and a “New York Manhattan prestigious address” for mail forwarding.
Tax-avoidance packages are on the rise
The goal of these proposals is to allow third-party companies to profit off tax havens while staying in a legal grey area.
When The Paradise Papers leaked in November, more than 13 million documents provided evidence of billionaires, world leaders, celebrities, and drug traffickers, using offshore tax havens. Looking at the papers, the Australian Tax Office (ATO) noticed the number of companies offering tax evasion packages has grown.
“We have become increasingly aware of the commoditization of tax evasion,” Mark Konza, the ATO deputy commissioner, confirmed to Business Insider. “As part of our investigations we are looking very closely at the role intermediaries and promoters play in marketing various arrangements.”
Konza said that tax authorities are well aware that there are a “large number of companies” offering to play the middle-man in a range of tax avoidance services, and the internet has allowed for a proliferation of these companies globally.
“The sites themselves are not illegal; they simply offer the service of setting up the companies in secrecy countries,” Konza said. However, Konza added that these so-called intermediary companies are sometimes used to “hide taxable income,” and facilitate illegal activity.
The Paradise Papers were a follow up to the massive Panama Papers which shed light on global companies using countries with low tax rates to avoid paying taxes to their home country.
Placing finances into an offshore account is legal, however critics of the system, like the Tax Justice Network, say it facilitates illegal activity by providing an extra layer of secrecy to financial transactions.
Information obtained from the leaked Panama Papers showed offshore accounts were, in some cases, used to avoid taxes, conceal transactions, and launder money.
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