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Tax Implications on ‘Panama Papers’ Leaked_1

04 Apr 2016

Tax Implications on ‘Panama Papers’ Leaked

        The whole globe countries are shocked by the leaked information regarding a lot of famous peoples that setting up companies in tax haven countries in relation with international financial and corporate restructuring.

        There are 2961 peoples and companies from Indonesia mentioned in this ‘Panama Papers’ list. The leaked data was from 1977 up to 2014. In reality, some people in the list had passed away and some companies had been closed / liquidated.

Actually setting up a company in tax haven countries is not against the law. The tax exposures of the leaked list of names data for taxation is the obligation to report in their tax return i.e. the share amount where usually is very minimum (possibly only USD 1). The more serious issues are what are the corporate structures and financial transactions that they have after setting up a company in tax haven countries.

        If the tax office can find any transactions unreported properly, then the said tax payers should explain what is the purpose of setting up a company in tax haven countries and the structure of corporate and financial transactions that they have done.

Some alternative solutions for the tax payers that are on the list are :

  1. Those tax payers can be proactive to amend their tax return and report the share at vehicle companies. This is to avoid the tax authority to deem the tax liabilities.
  2. Tax amnesty is a good way to report it but it is still big question when it will be approved by the parliament.
  3. In addition the said tax payers need to refresh their mind what are the kind of financial transactions that they have at that time and review what are the tax consequences. Probably the tax exposures are not as significant as they think if they can prove that there is no significant hidden revenue / assets according to the tax laws and regulations and tax treaties as well.
  4. If some peoples on the list is used by their superior / boss as nominee, they can explain and give the supporting documents to the authority.
  5. Consult with tax experts / registered tax consultant that can handle international cases (should hold Brevet C certificate) is recommended.


Agung Tjahjady SH, CPA, MM, BKP

Registered Tax Consultant, Advocate

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