Glencore has lost a bid to conceal its offshore financial activities from the Australian Taxation Office in a landmark decision by the High Court.
The decision follows a report by ABC’s Four Corners that revealed a leak regarding the offshore financial arrangements of a host of large multinational companies referred to as the ‘Paradise Papers.’
As part of the leaks, confidential emails, board minutes and tax structuring plans were exposed from global offshore law firm Appelby, Singaporean firm Asiaciti Trust and 19 corporate registries in tax havens according to the ABC.
ABC reported that the papers revealed Glencore was moving billions of dollar worth of assets into offshore tax structures.
Lawyers for the diversified company argued that given the documents were created by lawyers in Bermuda, legal privilege applied and could therefore not be accessed by the ATO.
The decision sets a significant precedent for multinational companies, with ATO second commissioner Jeremy Hirschhorn saying the outcome allows the ATO to continue to use the ‘Paradise Papers’ and other similar data leaks.
“Today’s decision is not just a win for the ATO; it’s a win for the Australian community who rightly expect the ATO to use all information available to ensure large corporations and those who seek to hide money overseas are paying the right amount of tax,” he said.
“The broader ramifications of this decision beyond Glencore are that the days of being able to hide money overseas are rapidly coming to an end – not only are foreign banks providing the ATO with details of Australians with offshore money, but taxpayers are only one data leak away from their entire affairs being exposed.”