PANDORA

PAPERS
11.9 million leak document case
PANDORA
PAPERS
Asimple guide to Pandora papers leak…….11.9 million
leak paper case.

Jens Martensson 2
SUMMARY
The Pandora Papers is a leak of almost 12 million documents that
reveals hidden wealth, tax avoidance and, in some cases, money
laundering by some of the world's rich and powerful.
• More than 600 journalists in 117 countries have been trawling
through the files from 14 sources for months, finding stories
that are being published .
• The data was obtained by the International Consortium of
Investigative Journalists (ICIJ) in Washington DC, which has
been working with more than 140 media organisations on its
biggest ever global investigation.
• BBC Panorama and the Guardian have led the investigation in
the UK

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WHAT HAS BEEN UNCOVERED?
 The Pandora Papers leak includes 6.4 million documents, almost three
million images, more than a million emails and almost half-a-million
spreadsheets.
 Stories revealed so far include:
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 the owners of more than 1,500 UK properties bought using offshore firms,
including individuals accused of corruption
 the Qatari ruling family who avoided £18.5m tax on a London super-
mansion
 Sir Philip and Lady Green went on a property spree after off-loading the
BHS retail chain which went on to collapse
 the prominent Tory donor who was involved in one of Europe's biggest
corruption scandals 3 4
 the King of Jordan's £70m spending spree on properties in the UK and US
through secretly-owned companies
 Azerbaijan's leading family's hidden involvement in property deals in the
UK worth more than £400m
 the Czech prime minister's failure to declare an offshore investment
company used to purchase two French villas for £12m
 how the family of Kenyan president Uhuru Kenyatta's secretly owned a 5 6
network of offshore companies for decades
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LARGE IMAGE SLIDE

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WHAT DO WE MEAN BY OFFSHORE?

The Pandora Papers reveal complex networks of companies that

are set up across borders, often resulting in hidden ownership of
money and assets.
For example, someone may have a property in the UK, but own it
via a chain of companies based in other countries, or "offshore".
These offshore countries or territories are where:
 it' s easy to set up companies
 there are laws that make it difficult to identify owners of
companies
 there is low or no corporation tax

The destinations are often called tax havens or secrecy

jurisdictions. There is no definitive list of tax havens, but the most
well known destinations include British Overseas Territories such
as the Cayman Islands and the British Virgin Islands, as well as
countries such as Switzerland and Singapore
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IT ILLEGAL TO USE A TAX HAVEN?

Loopholes in the law allow people to legally avoid paying some

taxes by moving their money or setting up companies in tax
havens, but it is often seen as unethical. The government says tax
avoidance "involves operating within the letter, but not the spirit,
of the law".
There are also a number of legitimate reasons people may want to
hold money and assets in different countries, such as protection
from criminal attacks or guarding against unstable governments.
Although having secretive offshore assets is not illegal, using a
complex network of secret companies to move around money and
assets is the perfect way to hide the proceeds of criminality.
There have been repeated calls for politicians to make it harder to
avoid tax or hide assets, particularly following previous leaks such
as the Panama Papers

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 HOW EASY IS IT TO HIDE MONEY
OFFSHORE?
 All you need to do is set up a shell company in one of the countries or
jurisdictions with high levels of secrecy. This is a company that exists in
name only, with no staff or office.
 It costs money though. Specialist firms are paid to set up and run shell
companies on your behalf. These firms can provide an address and
names of paid directors, therefore leaving no trail of who is ultimately
behind the business.

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 HOW MUCH MONEY IS HIDDEN IN
OFFSHORE?
 It is impossible to say for sure, but estimates have ranged from $5.6 trillion to
$32 trillion, according to the ICIJ. The International Monetary Fund has said
the use of tax havens costs governments worldwide up to $600bn in lost taxes
each year.
 Ms. Kumar said it is detrimental to the rest of society: "The ability to hide
money has a direct impact on your life... it affects your child's access to
education, access to health, access to a home.”

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Can offshore Trusts be seen as resident Indian
for tax purposes?
 There are certain grey areas of taxation where the Income-Tax Department is in
contestation with offshore trusts. After The Black Money (Undisclosed Foreign Income
and Assets) and Imposition of Tax Act, 2015, came into existence, resident Indians — if
they are ‘ settlors ’ , ‘trustees ’ , or ‘beneficiaries’ — have to report their foreign
financial interests and assets. NRIs are not required to do so — even though, as
mentioned above, the I-T Department has been sending notices to NRIs in certain cases.
 The I-T Department may consider an offshore trust to be a resident of India for taxation
purposes if the trustee is an Indian resident. In cases where the trustee is an offshore
entity or an NRI, if the tax department establishes the trustee is taking instructions from
a resident Indian, then too the trust may be considered a resident of India for taxation
purposes. For instance, in one case, an Indian wealth manager has been appointed a
‘protector’ (with powers to supervise the trustee) by an offshore trust, leaving a window
open for the taxman.
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HOW IS PANDORA PAPERS DIFFERENT FROM PANAMA PAPERS
AND PARADISE PAPERS?

While Panama and Paradise Papers had majorly focused on foreign

entities created by entities, corporates or individuals overseas, Pandora is
about the new method adopted by wealthy elites by setting up multiple
layered complex trust structures

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 IS SETTING UP A TRUST IN INDIA, OR ONE
OFFSHORE/ OUTSIDE THE COUNTRY,
ILLEGAL?
No. The Indian Trusts Act, 1882, gives legal basis to the concept of
trusts. While Indian laws do not see trusts as a legal person/ entity,
they do recognise the trust as an obligation of the trustee to manage
and use the assets settled in the trust for the benefit of ‘beneficiaries
’. India also recognises offshore trusts i.e., trusts set up in other tax
jurisdictions

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THANK
YOU
BBA (Gen) Shift 2
Submitted by- Himanshi Chaudhary
Aryan Chaudhary
Kunal kaistha
Navish Wadera