15 Apr 2016

CU LAB: The wider implications of the Panama Papers leak

The repercussions of the leak of the Panama Papers could go on for years, and beyond tax to corporate governance.

Related Knowledge

Get in Touch

Get in touch information is loading


Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.


Should you be scared because of the release of over 11 million documents from Mossack Fonseca in Panama? I don't know.

According to the papers and everything you read in the media there's at least 800 Australians who should be scared. That's probably only the tip of the iceberg but what it does mean is that the ATO has publicly stated that they will be investigating those people and are looking at their tax affairs. That's not to say that they've done anything wrong, but others may have done and, as projects such as Project Wickenby and Project Do It show, they have a great desire and they do follow through when they get information to check that what they've previously been told is correct. So for example they'll look at declared assessable income. It does that tally with what comes out from these papers. They'll also look at high-worth audits.

If you've got nothing to worry about then that's fine but there may be those for example people that didn't declare offshore holdings during Project Do It that may get a knock on the door and that may give them some cause for concern. What the ATO can do can ranges from as simple as compulsorily requesting documents or information through to getting a search warrant, getting the AFP to come and knock on your door early one morning and take in documents that way. That can lead to a whole range of different investigation and enforcement actions.

That's the sort of thing that the press and the media across the world, but in Australia particularly, have been focusing on but there are other potential fallouts from this as well. For example if a company offshore somewhere has an interest in a contract through which you can call for shares, as a director what does that mean for you, a director of an Australian listed company? It may mean that you have got an interest that you didn't know about in shares that needs to be reported. It may mean that you've been acting in breach of director's duties from an entity level, it may mean that you've got a substantial holding that you need to notify the ASX about or a change in a holding. It may also mean that you've inadvertently triggered take overs legislation for example. Those are the sorts of things that are less obvious but no less important than all the things that were in the media and are claiming public scalps of one form or another across the globe, so it will be in your interest to go, have a look at acquisitions that you've done maybe over the last few years to see whether there's any Panamanian or other offshore interests that mean that it might be worth having a closer look at them.