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Denmark Buys Data From Leaked Panama Papers

Offshore Account Update

Posted on September 28, 2016 |

The Panama Papers refer to documents leaked from a Panama law firm which provide insider details about how offshore accounts are used to move money around, protect financial privacy, and sometimes evade taxes.  The Panama Papers contain more than 11.5 million documents from a Panama law firm. The data in the documents was leaked from a source who remains anonymous, but who indicates that the leak created substantial personal risk.

Many people whose information was leaked didn't actually break the law. The papers show things like the creation of offshore entities and offshore financial accounts, neither of which are illegal.

However, some people did not comply with requirements to report their offshore funds to their own county where they are citizens and/or did not pay the required taxes in their own country on their offshore funds.  Because of the tax evasion and failure to fulfill reporting obligations, some of the behaviors described in the Panama Papers could lead to criminal charges or to attempts to collect unpaid taxes.

The government of Denmark has now announced it will be using information obtained from the Panama Papers to conduct investigations. Denmark is actually buying data from the Panama Papers, and Danish taxpayers could find themselves the subject of investigations based on leaked, private information.  The actions taken by the Danish government show how strong the intensity is in the goal of fighting tax evasion, as well as the extent to which governments will go to try to find tax evaders.

Denmark’s Reason for the Purchase

Denmark officials have stated that the cost to buy the Panama papers is “a single-digit million kroner, where 9 million is equivalent to $1.4 million.” Parliament approved purchasing the papers because it is believed they contain reliable and accurate data on around 600 Danish people. As the taxation minister said, “everything suggests that it is useful information.”

The taxation minister believes that Denmark “owes it” to “all Danish taxpayers who faithfully pay their taxes” to try to find out the details on the hundreds of Danish people who may be using offshore accounts to avoid paying what is owed.

Anyone in Denmark who had dealings with the Panama law firm the documents were leaked from can now expect this purchase by the government to mean that their private information on confidential transactions with lawyers will be made available to the Danish government. 

Those in other countries whose information is in the Panama Papers may not be directly affected by Denmark's purchase. However, buying the data is a clear illustration of how far countries are willing to go to catch people who may not be paying all of the taxes that the government says are due.

Those with offshore accounts which aren't declared will have more options if they take action before a government investigation and crackdown, so anyone who is worried should consult with Kevin Thorn, a Boston tax attorney for help as soon as possible to find out what options they may have for resolving their tax issues with minimal consequences.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989


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