ATO to scrutinise companies that use ‘secrecy havens’

AUSTRALIAN companies who operate out of "secrecy havens" such as Panama should be heavily scrutinised, Australia's Tax Commissioner has told a senate committee.

Tax Commissioner Chris Jordan told the Senate Committee into Tax Avoidance yesterday the ATO should be "crawling all over" companies that had operations in a "secrecy haven" such as Panama.

Revelations that about 800 Australian companies used Panamanian law firm Mossack Fonseca to hide wealth offshore were discussed in depth at the hearing.

South Australian Senator Nick Xenophon asked Mr Jordan: "If a company is operating out of Panama, for instance, should that raise a red flag that has consequences to the default rate of tax for that company?"

"The answer is basically yes," Mr Jordan said.

"People don't normally go to Panama for straightforward business dealings. So there is a presumption that there is something we clearly need to look at."

Mr Jordan said the ATO had been working with the Federal Court to "fast-track" multinational tax avoidance cases.

"We are now in discussions - it started last year - with the Federal Court to see how we can get some of these more strategically important cases resolved," he said.

"They are very co- operative and interested in how we can appropriately identify and work with them to get things up quicker."

Mr Jordan said a landmark case against Chevron had cost the ATO $10 million and taken about 10 years to complete. Chevron is appealing the decision.

ABC investigative journalist Marian Wilkinson, who has helped with the examination of the Panama Papers, told the committee more Australian companies could still be hidden in the massive leak.

"There could well be others," she said. "So many owners and beneficial owners were hidden behind layers upon layers of nominee directors and cut-outs.

"I don't think you can simply state the 800 is it."

Ms Wilkinson said despite the size of the leak, Mossack Fonseca was just one of many such firms assisting with moving wealth offshore.

She said investigators were "deeply shocked" at the scale, depth and industrial nature of Mossack Fonseca's practice.


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