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The ‘tax heaven’ tempting Australians online

Getty

Getty

Australians wanting to buy a foreign company and set up a bank account in a zero tax country can do so in minutes for around $1000.

More than 11 million documents leaked on Monday show how wealthy individuals from around the world, including Australians, have formed companies in tax havens including the British Virgin Islands in the Caribbean, Belize in Central America and the Seychelles islands off Africa essentially to evade tax.

These were among 30 countries and territories published on an international tax haven blacklist by the European Union last year.

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The Australian Tax Office has identified more than 800 individuals as part of a wide-ranging investigation it is already conducting to claw back missing tax revenue from offshore assets and deals.

The ATO famously targeted actor Paul Hogan and artistic collaborator John Cornell over $150 million in alleged unpaid taxes as part of its long-running Operation Wickenby offshore tax probe, eventually reaching a settlement in 2012 on a “without admission” basis.

Paul Hogan

Paul Hogan was on the ATO’s target list. Photo: Getty

“The message is clear – taxpayers can’t rely on these secret arrangements being kept secret and we will act on any information that is provided to us,” ATO deputy commissioner Michael Cranston said in a statement on Monday.

But far from being a secretive activity, research by The New Daily has found that anyone with a computer can quickly buy an offshore company with a linked bank account.

What’s more, the companies selling these off-the-shelf products and services make no secret of the fact that those buying them can avoid paying tax and disclosing their identity.

Screen Shot 2016-04-04 at 3.31.39 pm

Source: Fidelity Group

Off-the-shelf shopping in Latvia

Based in Riga, Latvia, a company called Fidelity Group sells ready-made shelf companies and “turn key” packages including bank accounts in the BVI, Belize and the Seychelles starting at $US500.

For a bit more money, it will also provide nominee directors, a business address and even call handling services.

“By using directors, the legal persons are spread out, which is very convenient for building complex company ownership and control schemes,” Fidelity says.

Fidelity currently lists 20 shelf companies available in the BVI, including one called Bombardier Challenger Limited. However, another called Predator Drone Ltd has already been reserved.

In Belize and the Seychelles it has 12 companies available, including one called Vassar Bionic Corp. and another, Advocate Law and Order Ltd.

The BVI, Fidelity states on its website, offers “complete freedom from taxes” and “the most elaborate offshore legislation in the world” where the information about the owners, shareholders and directors of companies “is safely hidden from inquisitive eyes”.

“BVI offshore companies are free from the necessity of submitting financial statements to the tax authorities of the country, and from carrying out statutory audits.”

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Source: Fidelity Group

No shortage of tax havens

It seems, however, that registering a company in the BVI requires certified identification, proof of residence, a letter from a bank, and confirmation of the source of “legal funds”.

“The prestige of this jurisdiction has a downside,” Fidelity says. “The documentation requirements are generally stricter than in more ‘democratic’ offshore zones. If they seem too off-putting, we recommend that you try Belize or the Seychelles instead, where the process is much simpler.”

A separate group, Offshore Company Corp, offers to set up companies in the BVI and more than 20 other countries including Brunei, Cyprus, Samoa and Vanuatu, and lists an Australian phone contact number on its website. This number was diverted to an office in Hong Kong.

Another company, Ocra Worldwide, is based in the Isle of Man but also lists an Australian contact address in Sydney. It offers services ranging from offshore and international company formation to super yacht registration and management.

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