Pandora Papers: Celebrities take advantage of tax haven

The names of several celebrities appear in the Pandora Papers leak, revealing how they profited from corporate structures in tax-exempt jurisdictions such as the British Virgin Islands or the Bahamas to acquire assets or collect their income. can. For an investigation by the International Consortium of Investigative Journalists (ICIJ), of which Radio-Canada is a participant.

Unveiled on Sunday, the Pandora Papers is a massive leak of nearly 12 million documents from 14 firms offering foreign incorporation services. The names of billionaires, politicians and criminals appear on it. Several of them on Monday sought to refute earlier reports by media partners of the ICIJ in which they were implicated.

These offshore companies are often in countries or regions where the tax rate is minimal or even zero. Registering such a company through a specialized firm can cost a few hundred dollars, and the secrecy provided by a tax haven can sometimes obscure the identity of their rightful owner, thus the people who give them their assets. to hide from the public and potentially from the authorities.

These maneuvers can allow celebrities or other wealthy people to avoid paying taxes in the countries in which they live, often quite legally.

Documents show that, in many cases, key stakeholders have been able to save hundreds of thousands or even millions of dollars in taxes. Taxes that can be used exclusively to finance public services, whether for health or infrastructure.

Here are some of the super-rich celebrities who appeared in this massive leak of confidential financial documents:

• Beatles Drummer Ringo Starr, there are two companies registered in the Bahamas. These were used to buy properties including a house in Los Angeles, reports ICIJ. He also created five trusts in Panama. Three of them have life insurance policies of which Mr. Starr’s children are the beneficiaries, and one holds his royalties and his show fees. Mr. Starr’s fortune is estimated at around $503 million. Representatives for Ringo Starr declined to answer questions from the ICIJ.

• British singer Elton John Owns more than a dozen companies registered in the British Virgin Islands. They derive their income from its many business activities. In many cases, Mr. John has created duplicate companies: one for income from the UK and the other for income from elsewhere. All companies that receive income from the UK are registered in the name of David Furnish, husband of Elton John.

  In this country, celebrities can report income from tourism, royalties, or record sales as business income. This gives them the benefit of a lower tax rate than salaried employees. Elton John’s personal fortune is valued at over $667 million. His representatives assured the ICIJ that Mr. John’s companies pay corporate taxes in the UK and that they have not used them to reduce their taxes or avoid paying them.

• Form to form three foreign companies on behalf of Colombian singer Shakira Appears in Pandora Papers. The date dates back to 2019, when a tax evasion investigation was being conducted in Spain regarding the use of such companies. In July, a judge determined that her trial could proceed, because there was sufficient evidence that she failed to pay more than $20 million in taxes between 2012 and 2014. At that time, his representatives had assured that he had paid the overdue amount as soon as he came to know that he owed the tax authorities money.

  Shakira’s representatives told Sixth, a media partner of ICIJ, that the forms pertain to companies that were registered several years before the investigation was targeted, before it was resident in Spain. They state that these documents were used to transfer the companies to a law firm so that they could be dissolved. They ensure that these companies do not have any income and do not carry out commercial activities. The singer’s representatives explained to the media Country, also a participant of the ICIJ, that Shakira has resorted to foreign companies because her income comes from outside Spain and the authorities in this country are aware of all her companies.

Forms have surfaced in the Pandora Papers to form three foreign companies under the name of Colombian singer Shakira.

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Photo : Reuters / Mike Blake

• Spanish singer Julio Iglesias Owns more than 20 companies registered in the British Virgin Islands. Eight of these have held property in the Miami area since 2008. ICIJ has been able to identify two other companies related to the singer that are not mentioned in the Pandora Papers and which also have homes in the area. Other companies owned by Mr. Iglesias had five lots on Indian Creek Island, Florida, an exclusive community known as the “bunker of billionaires”. Two lots were sold in 2020.

  According to ICIJ, some of the singer’s companies are eligible for tax exemption on the wealth tax of their assets. Mr. Iglesias’ personal wealth is estimated to be around $1.2 billion. He did not respond to multiple interview requests from ICIJ.

Julio Iglesias is the owner of over 20 companies registered in the British Virgin Islands.

Photo : Getty Images / Miquel Benitez

• German model and actress Claudia Schiffer She is the owner of six companies registered in the British Virgin Islands, where she has also established a trust for the benefit of family members. ’90s fashion icon reveals ICIJ partner south german newspaper that she has complied with applicable tax laws in the United Kingdom, where she lives with her husband.
• Argentine football player ngel di Maria He was sentenced to a year in prison in 2017 for tax evasion after Spanish tax authorities accused him of embezzling 1.3 million euros with the help of a Panama-based shell company. The Paris Saint-Germain star player, who was playing for Manchester United at the time, managed to avoid serving his sentence by paying a fine of more than €2 million. This company was used to receive payments related to image rights, particularly in relation to sponsorship contracts or advertisements.

  The Pandora Papers reveal that his Panamanian Front company, in addition to signing a deal with Adidas, continued to raise funds even after Mr. Di Maria paid his fine. A spokesman for Mr Di María told the ICIJ that the player had founded his Panamanian Front company on the recommendation of a “tax professional”, adding that many other Spanish athletes playing overseas were required to collect income related to image rights. external companies were invited to form . The contract between Angel Di Maria and Paris Saint-Germain is worth more than $20 million per year.

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Former Formula One financier Bernie Ecclestone purchased a soccer club using a company registered in the British Virgin Islands.

Photo : Getty Images / Clive Mason

• British billionaire Bernie Ecclestone Bought the UK Queens Park Rangers Soccer Club for $35.4 million in 2007 using a company registered in the British Virgin Islands. The former Formula 1 financier made the purchase together with former Renault Formula 1 team owner Flavio Briatore. The club was eventually sold through a Malaysian company to Air Asia founder Tony Fernandes.

  Pandora Papers documents show that by buying Queens Park Rangers, Mr. Fernandes also bought back the loans of M/s. The team was formed by Ecclestone and Briatore and four offshore companies based in the British Virgin Islands, Cyprus and Delaware. The club was already in debt when M.M. Ecclestone and Briatore bought it in 2007, and it suffered losses every year until it was sold.

  Tax experts explained to ICIJ that such loss can be deducted from personal income of M/s. Ecclestone and Briatore lowered their tax bills. In an interview with the ICIJ, Mr Ecclestone said that he became involved in buying the club “as a favor” to Mr Briatore, believing his use of his name to attract most other investors and managers. was done to. Mr Briatore did not respond to interview requests from the ICIJ. The Tax Justice Network revealed in 2018 that nearly one in four English or Scottish soccer clubs’ significant holdings came from outside the UK.

Avec Les Information by Mia Zuckerkandel, Marcos García Rey, Kevin Hall, Antonio Delgado, Joaquin Castellón, Daniele Grasso, Mauritius Macht, David Cohn, Simon Goodley and Ivan Ruiz