There is a fine line between legitimate tax planning and tax evasion. In fact, over the last few years it could be said that the line is becoming ever thinner as governmental and public pressure encourage individuals and organisations not simply to obey the letter of the tax law but add a moral layer to their tax planning regimes. As a result of this applied pressure, helped in part by changes in legislation, we’ve seen in recent times some multinationals start to move away from utilising every avenue of cross-border tax available to them.
Against this backdrop the ‘Panama papers’ have added fresh impetus to the tax debate. Originating from a Panamanian law firm it is alleged that some 11 million documents which purport to show money laundering and tax avoidance schemes have been leaked to a German newspaper. Reportedly the individuals and organisations affected span the globe with national authorities in a number of countries opening investigations.
What the outcome of these investigations will be is a matter for the future and no doubt action will be taken either to strengthen international or national tax legislation should the outcome warrant it. In the meantime, for the vast majority of ordinary individuals and small businesses which are able to benefit from the legitimate tax planning measures which have been introduced by Government, life goes on as before.
If you would like to speak to a tax adviser about tax planning, please contact Newshams Tax Advisers on 0800 211 8657 or email us at firstname.lastname@example.org.