YOU may remember the glaring spotlight that was thrust on the tax affairs of society’s elite in 2016 when the Panama Papers were released to the public.
Now, the International Consortium of Journalists has published roughly 13.4 million secret documents, nicknamed the Paradise Papers, which reveal almost €500 billion worth of tax avoidance harbored in tax haven countries. The documents have been published and distributed by some 100 different media organizations but were initially leaked by German newspaper Süddeutsche Zeitung.
Among the international household names are Nike and Apple, who are using comparative schemes to aggressively limit their tax payments, and Champions League partner Gazprom, who funded a shell company that invested in a Milner-affiliated company that held roughly 1 billion dollars in Facebook shares shortly before it’s 2012 initial public offering.
The documents also put into question the ownership conditions of Everton football club, with the Premier League now believed to be investigating the terms of the initial acquisition.
However, the biggest revelation to emerge from the list is the head of the British royal family. The documents suggest that around £10 million of Queen Elizabeth’s private funds are currently being held in offshore portfolios in the Cayman Islands and Bermuda, and have been since 2004.
One of the companies the queen has invested in is BrightHouse, a household goods and electronics retailer with a bad reputation of exploiting the poor by charging high-interest rates.
The investments in offshore accounts were made by the Duchy of Lancaster, the queen’s private financial manager, which stated that “all of our investments are fully audited and legitimate.”
The other notable individual to be exposed by these documents is Bono. The documents revealed that the U2 frontman used a company based in Malta called Nude Estates, to pay for a share in a shopping center in a small town in Lithuania. The company bought the mall for €5.8 million in 2007, before transferring it to a company in Guernsey called Nude Estates 1 in 2012. Foreign investors to this island nation pay as little as 5% tax on profits.
Bono has made no apologies for his tax affairs after past revelations.
In 2015, he said U2 “paid a fortune in tax. An earlier decision by the band to run some of their business through the Netherlands was, he said, “just some smart people we have working for us trying to be sensible about the way we’re taxed. And that’s just one of our companies, by the way. There are loads of companies”.
So what impact does this have on the Irish economy? Jim Clarken, CEO of Oxfam Ireland has said that countries are losing billions every year through tax avoidance; “We must remember that tax dodging impacts on everyone whether they live in richer nations or the developing world. It fuels poverty and inequality. When the super-rich and corporations dodge taxes it is ordinary people, who pay the price.”
“Just think how the additional revenue could help improve services in a country like Ireland. The extra taxation could be directed towards schools, hospitals, and other social services. Some of the billions dodged by corporations and the super-rich in poor countries every year could fund the healthcare services needed to prevent the deaths of millions of mothers, babies, and children.”