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The Australians Embroiled In The 'Paradise Papers' Tax Haven Leak

Nicole Kidman, INXS, miners named in huge tax investigation.

06/11/2017 12:52 PM AEDT | Updated 06/11/2017 12:52 PM AEDT
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The estate of deceased INXS frontman Michael Hutchence has been entangled in the Paradise Papers leak.

The estate of former INXS frontman Michael Hutchence, actress Nicole Kidman and the Australian arm of mining giant Glencore have become entangled in the largest leak of information in history, a mammoth journalistic investigation on the world's tax havens dubbed the Paradise Papers.

The leak -- 13.4 million documents and 1.4 terabytes of data -- was obtained by German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ), which further shared the trove with nearly 100 media partners worldwide.

Included in the leak -- alongside links to Queen Elizabeth, U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau -- are several prominent Australian identities.

As the Australian Financial Review reported "many senior Australian business figures appear in the data in their entirely legitimate roles as executives and directors of offshore subsidiaries and some ASX-listed companies. It should be noted these are standard, legal business structures."

As The Guardian and the ABC report, one of the more intriguing disclosures is information about the estate of deceased INXS frontman Michael Hutchence.

The Paradise Papers show how the singer's former lawyer Colin Diamond claimed key parts of Hutchence's estate, and embarked on a plan revolving around "commercial exploitation of the sound recordings, images, films and related materials embodying the performance of Michael Hutchence".

Papers included in the leak show Diamond's plans for a company called Helipad Plain, which was created in Mauritius in 2015. The ABC reports the company was involved in plans to commercially exploit the 20th anniversary of Hutchence's death, including a documentary, releasing previously unheard songs, and a film.

A deep investigation into the case of Hutchence will air on ABC's Four Corners on Monday night.

The Guardian reports the Australian arm of mining company Glencore was "involved in cross-currency swaps of up to $25bn of a type under specific investigation by the Australian tax office". These type of swaps, while legal, are being investigated by the ATO with suspicion they may be used to avoid tax by shuttling interest payments from high-tax nations to low-tax nations.

The papers show that Bermuda-based and Australian-based arms of Glencore swapped billions of dollars in Australian currency to American currency in 2013.

Actress Nicole Kidman and her husband Keith Urban are also named in the papers; The Australian Financial Review reported the pair registered a limited liability partnership in Tennessee in 2014. The company, Island 67 LLC, was then registered in in the Bahamas in March 2015 as a foreign company attempting to buy land in the country.

Closer to home, the fallout over the Paradise Papers release has struck instantly in Canberra. The ATO confirmed it had been made aware of the investigation in recent weeks, and stood ready to take action on any Australians avoiding tax obligations.

"We anticipate further data may be published by the ICIJ and the ATO will continue to work closely with other tax administrations to share intelligence on advisers operating globally," ATO deputy commissioner for international affairs, Mark Konza, said in a statement.

"Domestically, we are working with the Australian Criminal Intelligence Commission, the Australian Federal Police, and Austrac to further cross-check data and build our intelligence base, undertake audits, apply significant tax penalties where appropriate and refer cases to the Serious Financial Crime Taskforce for criminal investigation."

Konza said the ATO "investigate all leads and have the resources and expertise to take action against taxpayers or intermediaries found to be caught-up in the illegal use of offshore structures or providers".

In an interview on ABC radio on Monday, Federal Treasurer Scott Morrison said the ATO was "on the front foot" in regards to investigating any Australian misdoing exposed in the Paradise Papers publication.

"Australia is doing what we must be doing in relation to these latest revelations. We have been leading the charge in relation to international jurisdictions since the last set of papers," Morrison said at a doorstop interview later on Monday.

"As we heard at Estimates, the ATO said that Australia's laws, particularly on multinational tax avoidance, were exactly what they need to be to enable the ATO to get the job done. The ATO have also said they have the resources. They have more than 1,000 people at the ATO who are working specifically on issues related to companies, multinationals and private companies."

Morrison said the Government had been working hard on ensuring big corporations met their tax obligations in Australia.

"Pay your tax. That has always been my message to big multinationals. Pay your tax based on what you earn here in Australia. The good news is that it is happening more and more often. The tax office has pointed to $4 billion of settlements, around about $1 billion of which have been specifically able to be dealt with because of our tougher multinational anti-avoidance laws," he said.

"On top of that we have about $7 billion worth of sales which have come back into the GST net because of our tougher multinational anti avoidance laws. So my message to multinationals is pay your tax and increasingly that is exactly what they are doing."

"Not only are we doing everything that the ATO believes we should be doing but when you look around the world we have now one of the toughest, if not the toughest jurisdiction on multinational tax avoidance of anywhere in the world."

Labor, however, is calling on the Government to do more. The opposition assistant treasurer Dr Andrew Leigh said more needed to be done to expose these 'tax havens'.

"Until the Government commits to a comprehensive Tax Haven Transparency package, as Labor has, the public is going to rely on Paradise Papers style leaks to expose the murky use of tax havens," he said in a statement.

"But the Turnbull Government is more likely devoting their energy to a scare campaign about public information about who uses these tax havens and how much tax they pay. Malcolm Turnbull's team won't commit to making companies bidding for government contracts state where they pay tax - so the public where their money really goes - and they won't commit to rewards for whistleblowers who do the right thing."

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