What is the difference between tax avoidance and tax evasion?
Before the North Atlantic financial crisis that triggered the Great Recession of 2008 there was very little focus on tax havens. In fact, there was a race among nations to see who could offer the cheapest tax regime for corporations.

But as tax revenues slumped, the banks were bailed out and austerity was imposed - mostly on the weakest in society, the inner workings of tax systems and the way in which rich people and corporations use them has come under scrutiny.

Amazon's UK business, for example, racked up sales of more than $4.7bn in 2011 - but paid no corporation tax on that income. The online retailer had transferred the ownership of its UK business to a company in Luxembourg in 2006. The UK business was then designated as an "order fulfillment" business, while the Luxembourg company processed the payments. All this is legal. It's called tax avoidance.

Tax avoidance vs. tax evasion

It is estimated that corporations are saving themselves as much as $260bn a year by setting up businesses in lower tax regimes. A favourite method to avoid paying tax is to ask companies in high tax regimes to pay royalties for the use of a brand name - or simply to make a loan and ask for repayment. In other words, one part of a company makes a loan or pays for services to another. Again, this is legal.

But to deliberately seek to evade tax is considered illegal. This is when corporations and individuals underreport how much they earn or make bigger deductions than they are entitled to.

There is no suggestion in the stash of files leaked to the International Consortium of Investigative Journalists that anything illegal has taken place. The so-called Panama Papers highlight how easy it is for the wealthy, political elite and their families to set up shell companies in tax havens to conceal their wealth.

According to financial transparency campaign group Tax Justice Network, as much as $32 trillion was hidden in offshore accounts by rich individuals. It can cost as little as $1,500 to set up an offshore structure to hide your wealth.

It has been known for some individuals to avoid tax by setting up offshore shell companies, in which they deposit their earnings before making loans to themselves. That way they avoid future tax liabilities.

Mossack Fonseca, the Panama-based law firm from which the documents have been leaked, has said it "does not foster or promote illegal acts". And that's the key: wealthy clients who may wish to hide money from their spouses, children and public scrutiny employ law firms to make sure they don't fall foul of the law.

While such offshore structures are legal they are increasingly seen as odious in the realm of public opinion.

Source: http://www.aljazeera.com/indepth/features/2016/04/panama-papers-perfectly-legal-160404113825480.html

The Panama Papers is not an appeal to legalities BUT AN APPEAL TO CONSCIENCE as we know there are several loopholes through which people can escape fraud. Why can't those people do business in their own home country? I salute the former Iceland Prime Minister who resigned honourably. A few followed his footsteps and most others leaning on your mode of thought (OP) just don't seem to make any sense of the whole thing.

Any property or investment you have and do not want people to know about is Fraudulent


there's no other explanation , everybody in the world knows Obama's family house in Kenya , that should be classified information, Hidden from Public , but NO , it wasn't hidden


Any Nigerian Politician having properties , investments and Businesses abroad , especially construction, refining and production should be stripped of the rights to ownership and rights as a citizen


You have to develop your home before investing abroad

If these murrfuckas had their businesses in Nigeria , i am sure Nigeria would have stable power supply by now because out of frustration, they would find a solution to power supply


All looters should be brought home for flogging

Why resign if it is not a crime or illegal?