What do Amitabh Bachchan, the Queen of England, Russian state financial institutions and Nike have in common? Well, they're all named by Paradise Papers for using tax havens to hide their real wealth.
Almost 13.4 million files, amounting to the size of 1.4 TB data known as Paradise Papers were acquired by a German newspaper, Süddeutsche Zeitung. The newspaper has not disclosed its source. However, the raw data, as The Guardian reports has come from offshore service providers.
Now, before we start learning more about what names Paradise Papers has leaked and why, let's have a look at how tax havens work.
Tax havens are a facility through which big multi-national companies try to avoid paying tax. One of the most famous practices in this is 'corporate profit shifting (CPS)'.
Through CPS, the company registers itself in a low-tax jurisdiction country and then claims its profit from there.
Any individual who wishes to pay low tax on their income could become the citizen of a low-tax country. This practice is used by racing drivers and global sportspeople.
Now, if a person keeps their asset in a trust at an offshore tax haven, they can lawfully avoid paying tax in the country they're living.
Corporates avoiding tax is a significant phenomenon. In 2016, Moody's Investors Service estimated that large US technological companies held 1.64 trillion of cash offshore.
Ahead of two days before India marks the 'National Anti-Black Money Day' by celebrating the first anniversary of demonetization, comes the most significant leak that has shocked the nation.
Among 180 countries listed in the Paradise Papers, India stands at the 19th rank with 714 Indian names who keep their income offshore.
Now, have a look at the things which you need to know urgently.
The list of names in Paradise Papers includes famous Indian individuals like actor Amitabh Bachchan, Sanjay Dutt's wife Manyata, and Indian Union Minister Jayant Sinha.
The Jindal Steel, Sun Group, Havells, Hindujas, Apollo Tyres, Videoco, Emaar MGF, and the Hiranandani Group are some of the major Indian firms on the list, say reports.
From Apple to Microsoft and Google to Facebook, all of them have stuff piled up offshore, reports The Independent.
Economist, Gabriel Zucman analyzed the discrepancies in the countries' national account and exposed that $7.6 trillion, almost 85 of the world's total wealth is held offshore.
Most of the documents released under Paradise Papers have mentioned the name of Appleby. The law firm which consults companies on how to conduct business has outposts in the Cayman Islands, Bermuda, the British Virgin Islands, the Isle of Man, Jersey, and Guernsey.
Millions of pounds from Queen Elizabeth II's real estate are invested in the Cayman Islands, reports The Guardian after Paradise Papers leak.
Paradise Papers also reveal that financial institution having close ties with Russian President Vladimir Putin have funded vast amounts in social media giants like Facebook and Twitter.
What's interesting to notice is, all these investments were made through Yuri Milner, who is a business associate of Jared Kushner (Donald Trump's son-in-law), report Paradise Papers.
Yuri Milner states, "I'm not involved in any political activity. I'm not funding any political activity," report sources.
Image via - The Guardian
Well, that'd be the next exciting story to tell. Till then, you can flaunt this piece of information in your circle.
That's all, folks!