Post by Soutpeel on Apr 8, 2016 10:46:25 GMT 7
Panama Papers: How assets are hidden and taxes dodged
The revelations in the millions of papers leaked from the Panamanian law firm Mossack Fonseca uncovering a suspected money laundering ring run by close associates of Vladimir Putin may leave readers drowning in a sea of confusing terms and phrases.
Although there are legitimate ways of using tax havens, most of what has been going on is about hiding the true owners of money, the origin of the money and avoiding paying tax on the money.
If you are a wealthy business owner in Germany who has decided to evade tax, an international drugs dealer or the head of a brutal regime, the methods are all pretty similar.
Mossack Fonseca says it has always complied with international protocols to ensure the companies it incorporates are not used for tax evasion, money-laundering, terrorist finance or other illicit purposes.
Shell companies
A shell company has the outward appearance of being a legitimate business. But it is just an empty shell. It does nothing but manage the money in it, while hiding who owns the money. Its management is made up of lawyers, accountants or even the office cleaner, who do little more than sign documents and allow their names to appear on the letterhead. When the authorities try to find out who really owns or controls the money in the company, they are told the management does, but it is all just a front. Someone else is just paying them so they can hide their money from the authorities or in some cases their ex-wives. Shell companies can also be called "letterbox" companies, as they consist of little more than an address to post documents to.
www.bbc.com/news/business-35943740
The revelations in the millions of papers leaked from the Panamanian law firm Mossack Fonseca uncovering a suspected money laundering ring run by close associates of Vladimir Putin may leave readers drowning in a sea of confusing terms and phrases.
Although there are legitimate ways of using tax havens, most of what has been going on is about hiding the true owners of money, the origin of the money and avoiding paying tax on the money.
If you are a wealthy business owner in Germany who has decided to evade tax, an international drugs dealer or the head of a brutal regime, the methods are all pretty similar.
Mossack Fonseca says it has always complied with international protocols to ensure the companies it incorporates are not used for tax evasion, money-laundering, terrorist finance or other illicit purposes.
Shell companies
A shell company has the outward appearance of being a legitimate business. But it is just an empty shell. It does nothing but manage the money in it, while hiding who owns the money. Its management is made up of lawyers, accountants or even the office cleaner, who do little more than sign documents and allow their names to appear on the letterhead. When the authorities try to find out who really owns or controls the money in the company, they are told the management does, but it is all just a front. Someone else is just paying them so they can hide their money from the authorities or in some cases their ex-wives. Shell companies can also be called "letterbox" companies, as they consist of little more than an address to post documents to.
www.bbc.com/news/business-35943740
