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Tax avoidance, evasion, and the Pandora Papers

<p>What’s the difference between tax avoidance and tax evasion?</p> <p>The difference used to matter. Evasion was illegal. It meant not paying tax that was due. Avoidance meant arranging your affairs so tax wasn’t due.</p> <p>Australian media mogul Kerry Packer used the distinction as a complete defence when he told a <a rel="noopener" href="https://youtu.be/LnwYoOeWZGA?t=312" target="_blank">parliamentary committee</a> in 1991 he was "not evading tax in any way, shape or form. Of course, I am minimising my tax. Anybody in this country who does not minimise his tax wants his head read".</p> <p>The Pandora Papers — the biggest-ever leak of records showing how the rich and powerful use the financial system to maximise their wealth — shows the distinction has lost its meaning.</p> <p>The dump of almost <a rel="noopener" href="https://www.icij.org/investigations/pandora-papers/" target="_blank">12 million documents</a> lays bare the ways in which 35 current or former leaders and 300 high-level public officials in more than 90 countries have used offshore companies and accounts to protect their wealth.</p> <p>Only in some of the cases could their activities be categorically declared illegal.</p> <p><strong>Tax havens are legal</strong></p> <p>Here’s how tax havens are used. Trusts and companies are set up in places with low tax rates and secrecy laws such as the Bahamas, Cayman Islands, Hong Kong, Singapore, Switzerland, the US state of Delaware and the Republic or Ireland.</p> <p>If, for example, a wealthy celebrity or a politician wants to buy a new yacht or a luxury villa but doesn’t want to pay tax or stamp duty or expose their wealth to scrutiny they can get their lawyer or accountant to do it through such a trust.</p> <p>For somewhere between <a rel="noopener" href="https://www.icij.org/investigations/pandora-papers/global-investigation-tax-havens-offshore/" target="_blank">US$2,000 and US$20,000</a> to set up the trust, the name of the real owner or beneficiary can be hidden.</p> <p>It isn’t illegal for the celebrity or a politician to move their money (so long as it is theirs to begin with). Assets within the trust are subject to local tax laws (sometimes zero tax) and local secrecy laws (sometimes complete secrecy).</p> <p><strong>Legal, but used by criminals</strong></p> <p>These legal means of using complex networks of secret entities to move around money are the same as those used by criminals.</p> <p>Alongside the likes of India’s cricket superstar Sachin Tendulkar, Colombian pop singer Shakira and Elton John in the Panama Papers are Italian crime boss <a rel="noopener" href="https://www.icij.org/investigations/pandora-papers/global-investigation-tax-havens-offshore/" target="_blank">Raffaele Amato</a>, serving a 20-year jail sentence for weapons and drugs trafficking, and the deceased British art dealer <a rel="noopener" href="https://www.theguardian.com/news/2021/oct/05/offshore-trusts-used-pass-on-looted-khmer-treasures-leak-shows-douglas-latchford" target="_blank">Douglas Latchford</a>, suspected of smuggling looted treasures and money laundering.</p> <p><img src="https://images.theconversation.com/files/425189/original/file-20211007-13-1cp8an9.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Colombian singer Shakira is one of the celebrities named in the Pandora Papers as using offshore companies. Others are Elton John, Ringo Starr, Julio Iglesias and Claudia Schiffer." /></p> <p><em> <span class="caption">Colombian singer Shakira is one of the celebrities named in the Pandora Papers as using offshore companies. Others are Elton John, Ringo Starr, Julio Iglesias and Claudia Schiffer.</span> <span class="attribution"><span class="source">Gregory Payan/AP</span></span></em></p> <p><strong>It’s far from clear these arrangements should be legal</strong></p> <p>The big question raised by the Pandora Papers is why any hiding of private wealth from tax authorities ought to be legal.</p> <p>The International Monetary Fund estimated in 2019 that tax haven deprived governments globally of <a rel="noopener" href="https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm" target="_blank">US$500 billion to US$600 billion</a> per year.</p> <p>To put that into perspective, the estimated cost of vaccinating the world against COVID-19 is <a rel="noopener" href="https://www.nytimes.com/2021/06/11/briefing/biden-g7-vaccine-donations.html" target="_blank">US$50-70 billion</a>.</p> <p><a href="https://images.theconversation.com/files/425571/original/file-20211009-23-13m746j.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/425571/original/file-20211009-23-13m746j.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /></a></p> <p><em> <span class="caption">OECD chief Mathias Cormann has brokered a deal for a global minimum corporate tax rate.</span> <span class="attribution"><span class="source">OECD (CC BY-NC 3.0 IGO)</span></span></em></p> <p>Some of what’s been uncovered in the Pandora Papers is illegal (“evasion”) but much might not be (“avoidance”, aided by anonimity).</p> <p>The effect is the same. Dollars that ought to have been paid in tax are withheld and used for the benefit of people who aren’t keen to admit to owning them.</p> <p>Over the weekend the Organisation for Economic Co-operation and Development, now led by Australian Mathias Cormann, brokered a deal under which 136 countries agreed to charge multinational corporations a tax rate of at least <a rel="noopener" href="https://www.oecd.org/tax/international-community-strikes-a-ground-breaking-tax-deal-for-the-digital-age.htm" target="_blank">15%</a>, making tax havens harder to find.</p> <p>Ireland, previously used as tax haven, signed up.</p> <p>The nations concerned did this because because, even where legal, the use of tax havens costs billions.</p> <p>We’ll soon have to consider removing a distinction in law that vanished in practice some time ago.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/169353/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a rel="noopener" href="https://theconversation.com/profiles/alex-simpson-225991" target="_blank">Alex Simpson</a>, Senior Lecturer in Criminology, <a rel="noopener" href="https://theconversation.com/institutions/macquarie-university-1174" target="_blank">Macquarie University</a></em></p> <p><em>This article is republished from <a rel="noopener" href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a rel="noopener" href="https://theconversation.com/the-pandora-papers-show-the-line-between-tax-avoidance-and-tax-evasion-has-become-so-blurred-we-need-to-act-against-both-169353" target="_blank">original article</a>.</em></p> <p><em> Image: <span class="attribution"><span class="source">Aekawit Rammaket/Shutterstock</span></span></em></p>

Money & Banking

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This music streaming service is no longer available in Australia and New Zealand

<p>From today onwards, internet radio service Pandora will no longer broadcast in Australia and New Zealand. Here’s what you need to know.</p> <p>Five million people in the AU and NZ markets will have to look elsewhere for their music as the struggling company tries to shift its focus to the American market.</p> <p>Currently users of the platform are being warned of the closure today, with a message from Pandora appearing when they log onto the service.</p> <p>“Dear Pandora listener, We will be shutting down the Pandora service in Australia and New Zealand on July 31st, 2017. After this date, you will no longer be able to access the Pandora app of website,” the note reads.</p> <p>“We’re honoured to have connected so many listeners with the music they love these past few years. Thank you for your loyalty and the opportunity to serve you. Sincerely The Pandora Team.”</p> <p><strong>Do I get a refund?</strong></p> <p>All subscriptions users will receive a pro rata refund, regardless of whether the subscription was purchased from the Pandora website, Apple iTunes or Google Play. </p> <p><strong>What happens to gift cards?</strong></p> <p>Those who purchased a gift card from Pandora will be offered a refund from the service, but unfortunately if you bought a gift card from a retailer will need to follow up with the store.</p> <p><strong>Where do I listen to music online now?</strong></p> <p>Pandora joins a long list of services like JB Hi-Fi Now, Milk Music, Rdio, Guvera, Nokia MixRadio and Rara, which all failed to make a mark in the Australian music market.</p> <p>But there are a few services around that will offer you a similar service:</p> <ul> <li><strong><span style="text-decoration: underline;"><a href="https://www.iheart.com/" target="_blank">iHeartRadio</a></span> </strong>— a free internet radio service with thousands of stations and millions of songs.</li> <li><strong><span style="text-decoration: underline;"><a href="https://www.apple.com/au/music/" target="_blank">Apple Music</a></span></strong> — Apple’s exclusive music streaming service start from $A11.99 per month.</li> <li><strong><span style="text-decoration: underline;"><a href="https://www.spotify.com/au/" target="_blank">Spotify</a></span> </strong>— The world’s most popular music streaming service offers access to millions of songs. A free version of the app offers you access with advertisements, while a premium $11.99 per month service offers non-stop music and the ability to download.</li> </ul> <p> </p>

Music

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What is music streaming?

<p>From buying vinyl records from the local record store to downloading songs on iTunes, the music world sure has undergone a lot of change over the last five decades. And now, thanks to music streaming, the way you buy and listen to your favourite songs is changing again, for the best!</p> <p>Here, we explain what music streaming is, and how you can give it a go.</p> <p><strong>What is music streaming?</strong></p> <p>Music streaming lets you play a huge variety of songs via the internet. There are a number of big platforms who allow you to access their music collection online. Rather than buy individual songs, you create a profile and can search for the songs on their library, then play them without actually downloading the song to your computer or device. </p> <p><strong>Who are the main players?</strong></p> <p>There are two major players in music streaming. Spotify is a platform that allows users to browse from their library of millions of tunes. They also offer playlists to suit your taste in music, or help you discover new artists and songs you might like.</p> <p>The other big player is Pandora, which is an internet radio.  Pandora allows you to type in what songs you like, and uses an algorithm to suggest a string of similar songs and artists. It’s a great tool for discovery.</p> <p><strong>What music can I listen to?</strong></p> <p>There are millions of songs on these streaming platforms. From classical music to your favourite 80s hits and today’s pop songs, there’s a huge selection available. Smaller independent artists can be harder to find.</p> <p><strong>How is it different from buying CDs or downloading songs?</strong></p> <p>When you buy a CD or download a song from iTunes, you have to pay for it individually. For example, if you want to listen to 10 songs by different artists, you’d have to buy multiple CDs or each of their songs online.</p> <p>Music streaming is different because you can access a huge variety of music without paying for each song. The music is streamed via the internet so unlike downloading songs or buying CDs, you don’t own any track.</p> <p><strong>How much does it cost?</strong></p> <p>Both Pandora and Spotify offer free versions, where you can listen to any song without paying, but every now and then you’ll hear an advertisement. To avoid ads, it will cost you $11.99 per month on Spotify.</p> <p><strong>How do I get started?</strong></p> <p>The best way to get started is to head to <a href="http://www.spotify.com.au" target="_blank"><strong><span style="text-decoration: underline;">Spotify </span></strong></a>or <a href="http://www.Pandora.com" target="_blank"><span style="text-decoration: underline;"><strong>Pandora</strong></span></a> and make a free profile. Have a play with the song search tool and create some playlists. If you find that you use the platform a lot it might be worth upgrading to a paid version, but that’s your choice. You’ll be amazing by what old favourites can be unearthed!</p> <p><em>Image credit: Shutterstock / Denys Prykhodov</em></p> <p><strong>Related links:</strong></p> <p><span style="text-decoration: underline;"><em><strong><a href="/news/news/2015/12/google-releases-top-search-terms-2015/">Google releases list of top searched-for questions for 2015</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/entertainment/tv/2015/11/netflix-hacks/">6 Netflix hacks you need to know</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/entertainment/music/2016/01/david-bowies-greatest-hits/">David Bowie’s greatest hits</a></strong></em></span></p>

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