Panama Papers: Australia, NZ begin investigations

Tax authorities down under began their week by investigating local clients of a Panamanian law firm, implicated at the centre of a large tax evasion scheme uncovered by a data leak on Sunday.

The leak of the ‘Panama Papers’ consisted of almost 12m documents from law firm Mossack Fonseca - based in Panama City - purportedly showing the details of hundreds of thousands of clients in a number of countries.

German newspaper Süddeutsche Zeitung first received the documents and shared them with other news outlets, before the investigation was published at the weekend by the outlets and the International Consortium of Investigative Journalists.

It is understood the documents showed a number of companies registered in tax havens were being used to launder money, complete drug deals and trade arms, as well as evade tax obligations. They covered a period from 1977 to last year.

The Australian Tax Office confirmed it had begun investigating more than 800 clients of Mossack Fonseca on Monday, saying in a statement that it had “now linked over 120 of them to an associate offshore service provider located in Hong Kong.”

In New Zealand, the Inland Revenue Department said it was working closely with its tax treaty partners - which include the Australian Tax Office - to secure the details of any tax residents of New Zealand involved with Mossack Fonseca.

After the leak on Sunday, Mossack Fonseca’s director Ramon Fonseca condemned the hacking and subsequent leak as an attack on privacy.

He denied wrongdoing, and told news agencies that most of the 240,000 offshore companies his firm had helped set up were used for legitimate purposes.

Fonseca was a senior official within the Panamanian government until last month.