Lukáš Vician
Lukáš Vician
Small biographical info test.
20 November 2017

Legally, the activities uncovered through Paradise Papers are different from Panama Papers

Legally, the activities uncovered through Paradise Papers are different from Panama Papers

The issue of the widespread tax avoidance schemes employed by the wealthy individuals and large multinational companies came into spotlight at the level of the Member States as well as in the European institutions many years ago. The latest leaks show that the tax system in an integrated EU economy needs to be fixed if such tax avoidance is to be minimised.

 

However, it is not proper that the media informs the public of certain tax avoidance schemes through various leaks, while not uncovering anything illegal. Certainly, the public will get angry and we understand that were the taxes fully paid by these individuals, the relevant countries would have larger revenues. These could have been used for schools, hospitals or social/health care that desperately need reforming in many countries. However, if the laws allow the multinationals to employ certain strategies to minimise their tax obligations, we cannot label them as criminals for doing so. Tax avoidance is not the same as tax evasion. While the latter is illegal, tax avoidance through international structures is not against the law. Rather than criticizing the individuals and multinationals engaging in such activities, we should fix the cross-border tax systems and close the loopholes.

 

Moreover, rather than engaging in public hysteria and outcry over the revelations in Paradise Papers, it should be explained to the public that such structures may not always be used for the wrong reasons as the media shows. The offshore funds can be created with the goal of being sold into lots of jurisdictions and that its investors can pay their taxes due in their own countries of residence. There is nothing wrong with the individuals and multinationals doing what the law still does not prohibit.

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