This spring, a massive leak of financial papers revealed the inner-workings of off-shore shell companies and possible tax evasion by thousands of companies and individuals.
Mossack Fonseca, the company whose files were leaked, is a Panama-based seller of shell firms. Its clients purchase premade, anonymous companies with fake directors designed to hide the true shareholders of the company.
The leaked data includes financial information of twelve current and former heads of state—such as Sigmundur Davíð, who was forced to resign as Prime Minister of Iceland as a result of the leaks—and countless links to other leaders through their families and advisers—including the father of U.K. Prime Minister David Cameron and the lawyer of Russian President Vladimir Putin. The leaks include information on over 200 other politicians and up to 214,000 corporations that purchased shell companies.
Not all individuals connected to the shell companies engaged in illegal tax evasion in their respective countries, but the exposure of so much income sheltering has raised questions as to whether such forms of tax avoidance should remain legal.
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