Ross Greenwood speaks to Senior Tax Counsel at the Tax Institute, Bob Deutsch, about the Paradise Papers which are a massive leak of tax haven records that expose the offshore financial system that entangles world political players, private wealth and corporate giants.
Introduction: What do the Paradise Papers reveal?
Ross Greenwood: Good evening and welcome back to the many news right around the country great to have your company. You would have been reading maybe, as you open your papers this morning about a messy leak of taxation documents these are the so-called “Paradise Paper’s”, now remember that last year there was this so called Panama Papers, will this are even more significant around half of them are in relation to a company originally based in Bermuda called Appleby which is a big tax law firm massive. Been going back for hundreds of years.
Well, these particular documents that have been leaked from that organization 13.4 million tax records go back some 66 years and go up until last year. Now there has been effectively the Australian Criminal Intelligence Commission, Australian Federal Police and old strike along with the tax office have basically launched a criminal investigation into any Austrians who might be named here. Now with the tax office also pains at saying right up front is that they may be people on this list, companies on this list that may be thoroughly legitimate The reason for it is any person can set up a company in a tax haven does not necessarily mean they are trying to avoid tax. They might think there’s a smear or a sniff of suspicion, but the point is if they tell this Austrian tax about their affairs and a fully open and transparent about them they no issue whatsoever.
To some of the names that have been named that may be beyond suspicion, Keith Urban and Nicole Kidman, the music stars Bono and Madonna, the Queen for goodness through an investment that her private company had made. They were backers of President Donald Trump in regards to his election and also then links to Russia, then even the family of Russian president Vladimir Putin’s. Nike, Apple have been named. Now, let’s go to the Tax Institute’s senior counsel Bob Deutsch who is online right now, many thanks for your time Bob.
Interview with: Bob Deutsch, Senior Tax Counsel at The Tax Institute
Bob Deutsch: Good evening Ross how are you doing.
Ross Greenwood: Good thank you. We should explain this to people shouldn’t we, and that is that really this is a very serious offense, but what you and I spoke about earlier today, is so long as people of told the tax office, they are fine, is it’s if they have not told I tax office and the tax office finds them and through the trolling of this information, that’s when I could be in some serious strife.
Bob Deutsch: That’s right, they may be in a position where they haven’t properly disclosed income that needed to be disclosed in Australia. In that case that income is taxable here and hasn’t been disclosed, they have been strife and they run the gauntlet of potential criminal prosecution. But I emphasize as you did in your introduction there’s obviously going to be legitimate situations and situations where people have acted fraudulently in contravention of Australian law.
Ross Greenwood: These types of leaks the Panama Papers and these Paradise Papers as they are called, they would be absolute life blood for tax investigators trying to get underneath the affairs of many prominent Australians and indeed prominent companies.
Bob Deutsch: Life blood for not just the Australian Revenue Authority, but revenue authorities all over the world, everybody would be interested in knowing what their resident and citizens are doing or the revenue authorities would. Obviously, from our point of view the Australian tax office going to be very interested to know who’s on this list and why they are and what type of income they have got off shore and whether that should have been disclosed as accessible income in Australia.
Ross Greenwood: One of the things is, say for example, we saw charges pressed against John Kinghorn, he has pleaded not guilty to the charges brought by the Australian Federal Police, this is last week, the founder of RAMS, the man who brought Krispy Kreme Donuts to Australia, but nonetheless, some of those charges against him, tax fraud in particular carry potential jail sentences of 10 years so, this is a very serious allegation and again anybody who is seen to have defrauded the tax office here in Australia could be potentially the subject of similar penalties.
Bob Deutsch: Absolutely, I should say at the outset that I know nothing about any specifics of the Kinghorn case, I’m not making any comment on that obviously, but as a general proposition, what you say absolutely correct, 10 years is the sentence that could very easily be imposed in circumstances like this. It’s conceivable that it could be longer even but obviously, also there’s possibility of shorter since it will depend on the nature of the activity that is involved and how long it has being going for.
Ross Greenwood: That being the case, the tax office will go through these, the individuals will look at these very carefully to see exactly what their potential liability will be. But what it’s also perhaps telling people is that the era of all of those tax havens of people not disclosing well, maybe those days are coming to an end.
Bob Deutsch: I think they are coming to an end and I think the tax office had an amnesty running up until the end of last year or towards the end of last year, that is now over and the tax office was very careful to explain that it was the last of the amnesty’s that were going to be offered and anybody who didn’t take it up would run the gauntlet of the criminal investigation. That’s what arising out of this latest disclosure of the Paradise Papers.
Ross Greenwood: Bob Deutsch the tax Institute senior council, great to have your explanation on this Bob because it gives it a very complex area, a very understandable explanation as well and Bob Deutsch, we appreciate your time here on the program.
Bob Deutsch: Pleasure Ross, great taking to you.
Ross Greenwood: This is one aspect of this that we should also pick up and that is revelations tonight on the ABC’s four corners. This is in regards to the INXS singer, Michael Hutchence who wrote many of its songs. Now of course, Michael Hutchence died, and then the issue of his daughter Tiger Lily and so forth as to what happens with actually his rights, now as a part of the Paradise Papers some understanding of his affairs have come to light, and in particular that of his lawyer, who was the trustee of his estate Colin Diamond.
Now, what’s suggested here as a result of investigations is that Four Corners tonight will reveal that Colin Diamond somehow it was grabbed ownership of Michael Hutchence estate and also his intellectual property rights all of his song titles and so forth from the family and from his own estate. How that is happened is still to be worked out. But let’s just pick up a little of Marian Wilkinson and just her report tonight on Four Corners in particular speaking with Michael Hutchence’s brother Red Hutchence.
Red: All the money slowly dwindled to a point where we became pecuniary beneficiaries meaning there was nothing left for any of us or anybody really, so nothing. There was nothing there. It all got chewed up in legal fees. They sold a lot of his assets even to do that.
Ross Greenwood: It does raise implications in particular of Tiger Lily and what she will actually end up getting from her father’s rights, it is going to be fascinating so that will be on Four Corners tonight Marion Wilkinson will be the reporter we got more money news coming up.
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