Offshore Taxation Scandals Rocking the US and Germany

Summary: Super wealthy are being found out as tax cheats in America and Germany as investigations into offshore tax evasion continue

Everyone knows that offshore bank accounts, corporations, trusts and strategies can be - and are - used by the super wealthy to evade taxation, but just how widespread the illegal use of these perfectly legitimate structures and solutions is, is suddenly becoming apparent as offshore taxation scandals are now rocking the US and Germany.

It’s a well-known fact that offshore solutions can offset taxation and even improve an individual’s tax status when used legitimately, and it is also well-known that many super wealthy illegally report their use of such structures to specifically avoid tax – but just how widespread the problem was is only now coming to light.  If you thought offshore taxation was boring we can tell you that it is anything but as we reveal some of the scandals rocking the tax world currently.

The deeper understanding of the level at which offshore tax evasion has been ongoing in America and Germany has suddenly come to light following some sincerely exciting events.  First the German Federal Intelligence Service were conducing a deep investigation into cross border organised crime.  They managed to infiltrate a bank in Lichtenstein and gain the assistance and trust of an employee who assisted investigators trace criminal funds.  The German Federal Intelligence Service then passed details of their secret bank contact to the tax authorities which sought approval from the government to pay this source an estimated 5 million euros and provide him with a new identity.  In exchange for this, a wealth of extremely sensitive and highly confidential information about foreign account holders who have wealth in Lichtenstein’s highly protected banks was handed over to the German authorities by their contact.

Presumably this mole/rat (you decide!!) has now scampered off to their new life quite happily, meanwhile the Germans have begun arresting extremely high ranking and high profile individuals across the country as they discover that they have all been avoiding serious amounts of tax!  The Germans have also passed their source’s findings on to the Americans who have also discovered just how deep a problem they have!

So far the Americans are cracking down by arresting those who assist wealthy individuals and corporations evade tax.  They have begun by targeting the banking group UBS and forcing them to reveal details about clients who they have assisted in moving assets offshore.  The US authorities now estimate that the loss to the Treasury annually in terms of taxation avoided could run to 100 billion US dollars.

The Germans meanwhile have arrested Klaus Zumwinkel, the CEO of Deutsche Post which owns DHL.  He is of the country’s most prominent businessmen and he is suspected of personally evading up to a million euros in tax.  Not stopping there they have made arrests in Frankfurt, Munich, Stuttgart and Hamburg for example, and they are fighting hard to rebuild the public’s trust in the state of the nation as more and more vociferous complaints are heard about how wealth is unfairly distributed in Germany, and how their fat cats just keep getting fatter on the back of massive wage and bonus increases.

One often hears about how the rich just get richer – but this does not really apply to the so-called middle class income earners in Europe and America, this statement should really only be used in application when referring to the super rich who use their wealth and status to ‘buy’ private bankers’ assistance to enable them to avoid tax and get even fatter on the illegal profits of their illegal actions.  We’re all for the legitimate utilisation of offshore solutions – but we sincerely have a problem with the likes of Zumwinkel who allegedly squirrel their nuts offshore and sit in positions of power and pomposity whilst the rest of us work our fingers to the bone to simply afford the rising cost of living thanks to inflation.

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