Recently the International Consortium of Investigative Journalists (the “ICIJ”) and the German newspaper Süddeutsche Zeitung obtained more than 11.5 million private and confidential financial documents (about 2.6 terabytes of information) which had been held by the Panamanian law firm Mossack Fonseca & Co. This has been popularly labelled the “Panama Papers”.
The Law Firm
Mossack Fonseca & Co. is a well known international law firm founded in 1977 by Jürgen Mossack and Ramón Fonseca with a specialty in providing corporate services and representing companies incorporated in Panama.
In particular, the firm is known for assisting individuals and entities with establishing offshore, tax exempt entities.
What Happened?
Approximately a year ago the German newspaper Süddeutsche Zeitung obtained the Panama Papers from an anonymous source. Süddeutsche Zeitung then shared these documents with the ICIJ.
On April 4, 2016, the ICIJ released the more than 11.5 million documents to a large network of about 100 global news agencies, including the Toronto Star.
Implicated Persons and Entities
The Panama Papers closely follows other major international leaks involving offshore structures held by individuals and entities resident in a wide number of jurisdictions, such as the 2012 “Offshore Leaks”, and the 2014 “Luxemburg Leaks”.
The Panama Papers is the largest international leak centered on private financial information thus far. It has implicated more than 214,448 entities, private citizens worldwide, and at least 12 current and former heads of state including Prime Minister David Cameron of the United Kingdom, Prime Minister Nawaz Sharif of Pakistan, President Jacob Zuma of South Africa, and President Xi Jinping of the People’s Republic of China.
What if the Panama Papers Implicates You?
It is notable that at least 350 readily identifiable Canadians have appeared in the leak, and domestic media outlets have begun to publicly release information on these individuals.
Given the current Federal Government’s recently stated intent to crack down on offshore tax havens, we anticipate that the Canada Revenue Agency will be conducting a closer examination of any Canadian persons or entities whose names appears in this leak.
If you have been, or anticipate being implicated by the Panama Papers, we would strongly encourage you to seek professional assistance to ensure that you are in compliance with Canadian tax legislation with regards to any offshore tax structures you may hold.