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On April 4, 2016 we posted Huge Leak From the Panamanian Law Firm Mossack Fonseca! where we discussed that, the offshore planning world was set on fire with the news that 11 million documents were leaked from the Panamanian law firm Mossack Fonseca. 

They showed how Mossack Fonseca has helped clients launder money, dodge sanctions and evade tax. The company says it has operated beyond reproach for 40 years and has never been charged with criminal wrong-doing.

Subsequently we posted OECD Ready to Act on Leaks From Panamanian Law Firm Mossack Fonseca  where we discussed how government officials from around the world have called on the OECD to convene a special project meeting of the Joint International Tax Shelter Information and Collaboration (JITSIC) Network to explore possibilities of co-operation and information-sharing, identify tax compliance risks and agree collaborative  action, in light of the “Panama Papers” revelations.

Now, just 10 days later we discover that Panamanian police have carried out a raid on the offices of Mossack Fonseca, the law firm whose client records were leaked last week. The operation, directed by prosecutor Javier Caravallo, searched for documentation that would establish the possible use of the firm for illicit activities, said the country's attorney general in a statement.
 
(Photo of Panamanian police outside of the Mossack Fonseca firm in Panama City on April 12.) 

Mossack Fonseca has denied any wrongdoing, saying it only set up offshore financial accounts and anonymous shell companies for clients and was not involved in how those accounts were used.

The law firm said on its Twitter account Tuesday night that it “continues to cooperate with authorities in investigations being made at our headquarters.”
 

Sources:

On April 12, 2016 the European Commission presented a proposal that would require all large Multinational Enterprises with operations in the European Union to Publicly Disclose certain tax-related information for all their entities in the EU and in designated tax havens on a country-by-country (CbC) basis.
 
The European Commission has indicated that it will establish a common EU list of tax haven jurisdictions as soon as possible. These Multinational Enterprises would also be required publish an aggregate figure for total taxes paid outside of the EU.

Reasons For and Objectives of the Proposal  A healthy Single Market needs a fair, efficient and growth-friendly corporate tax system, based on the principle that companies should pay taxes in the country where profits are generated. Aggressive tax planning undermines this principle. The majority of companies do not engage in aggressive tax planning and suffer a competitive disadvantage to those that do. Small and medium-sized companies are particularly affected by this phenomenon.  

Fighting against tax avoidance and aggressive tax planning, both at EU and global level, is a political priority for the European Commission. As part of a broader strategy for a Fair and Efficient Corporate Tax System in the EU, public scrutiny can help to ensure that profits are effectively taxed where they are generated.
 
Public scrutiny can reinforce public trust and strengthen companies' corporate social responsibility by contributing to the welfare through paying taxes in the country where they are active. In addition, it can also promote a better informed debate on potential shortcomings in tax laws. 
 
Responding to the calls from the G20 and elsewhere, greater transparency on the side of companies is needed to enable public scrutiny of whether tax is paid where profits are produced. This proposal requires that MNEs disclose publicly in a specific report the income tax they pay together with other relevant tax-related information. MNEs, whether headquartered in the EU or outside, with turnover of more than EUR 750m ($855mm) will need to comply with these additional transparency requirements.
 

• This proposal focusses on corporate groups with a worldwide consolidated net turnover of more than EUR 750 million, in line with the scope of global OECD initiatives on tax transparency.
• The proposal does not impose any obligations on small and medium-sized companies.
• It is proportionate both in terms of scope and information to be disclosed so as to limit compliance and other costs for affected companies, as well as to avoid jeopardizing their competitiveness or expose them unduly to double taxation risks.
• It fits into the multilateral approach supported by the G20 and the OECD.

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