Businesses Face Tax Scrutiny After Paradise Papers Data Leak

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By Ben Stupples

Businesses are facing scrutiny over their tax affairs following the Paradise Papers data leak that has exposed the offshore tax planning of wealthy individuals and multinational companies.

Dutch legal and corporate services company Intertrust NV, and German mail-delivery business Deutsche Post AG both faced questions over the data leak in Nov. 9 calls with analysts.

David de Buck, chief executive officer of Intertrust, said the Amsterdam-based company is listed once in the Paradise Papers. Yet the reference to the company is “incorrect” as it relates to a “struck off” former client of a business, ATC Group, that Intertrust acquired in 2013, he added.

Deutsche Post’s chief financial officer Melanie Kreis said the company’s activity across 220 territories means it inevitably has operations in the low-tax jurisdictions listed in the Paradise Papers.

But “we are not using these countries for tax optimization,” she said. “The problem that we have right now is that, like all the other companies, we have to take in how far we can use all the lawful options to have a reasonable tax rate,” and then check if the options are “morally legitimate.”

“It’s very difficult to reflect this in a tax strategy, but as our corporate strategy, we very clearly try to be out of the gray areas,” she added. Deutsche Post, which owns the DHL express-delivery and freight brand, has “very high tax losses carried forward based on our history, and so we have other possibilities, and we can change our tax rate without using illegal measures.”

Complex Offshore Structures

The Paradise Papers, featuring 7 million loan agreements from Bermuda law firm Appleby, aim to expose how wealthy individuals and large companies avoid taxes via complex offshore structures.

The International Consortium of Investigative Journalists examined the data leak, made up 13.4 million documents overall, with the first revelations published on its website Nov. 5.

Low-tax jurisdictions Bermuda, the Cayman Islands, and the British Virgin Islands all feature in the data leak. In addition, they all feature among the top 10 countries to which Appleby’s clients are connected. Most of the firm’s clients, however, are linked to either the U.S. or the U.K.

Paul Noble, head of tax investigations at London-based law firm Pinsent Masons, told Bloomberg Tax Nov. 13 that the leak poses a “reputational risk” to any company mentioned in it, and cited the public outcry over Queen Elizabeth II’s private offshore investments as one example.

“Nobody is alleging there’s anything wrong with it,” Noble said on the investment.

Global Business Network

A Deutsche Post spokesman told Bloomberg Tax Nov. 13 the company has operations around the world to support its global business network. That is their “principle purpose,” he said.

A spokesman for Intertrust declined to provide further comment.

To contact the reporter on this story: Ben Stupples in London at

To contact the editor responsible for this story: Penny Sukhraj at

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