The Paradise Papers, revealed to the world on Sunday, have exposed more information about how the world’s richest people manage their money and minimize tax payments, and about the Israelis on the list.
“Israel” appears in more than 20,000 documents leaked from the Bermudan law firm Appleby, including Israeli companies in tax havens, companies with Israeli directors or shareholders, property listings in Israel through offshore companies, Israeli companies’ investments in companies listed in tax havens, and more.
The documents were obtained by Germany daily Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists and a network of over 380 reporters and newspapers in 67 countries, including Haaretz. It bears emphasizing that registering a company in a tax shelter, or owning financial assets or accounts in tax havens, is perfectly legal, as long as the Tax Authority is advised properly.
There are two main reasons to operate offshore: tax; and greater facility in allocating shares, replacing directors or replacing owners, says an accountant who refused to be quoted by name.
Among the Israelis listed in the leak is mining tycoon Dan Gertler, who appears in 120 documents regarding his relationship with Glencore, a London-listed company that uses Appleby’s Bermuda branch for much of its business.
Glencore minutes detail how the company lent millions to Gertler – known for high-level friends in the Democratic Republic of the Congo, to allegedly help secure a tender for a copper mine in the Country.
Answering reporters, Glencore said its background checks on Gertler were “extensive and thorough.” Mr. Gertler's lawyers said that he “rejects absolutely any allegations of wrongdoing or criminality by him.” No loans were used improperly or for inappropriate purposes, Gertler’s lawyers stated.
Another probe published by Canada's CBC involves the Bronfman family and Israeli businessman Jonathan Colber, former CEO of Koor Industries and the beneficiary of the Kolber Trust, established in the Cayman Islands in 1991. More than 3000 documents detail the fund’s complicated activity over the years. The fund had been set up by Colber’s father, a Canadian senator named Leo Colber, and was funded by Leo, the Bronfman family and a Bronfman family firm. Stephen Bronfman is a confidant and fundraiser for Canadian prime minister Justin Trudeau, who by the way came out publicly against the use of tax shelters.
Colber’s lawyers say told CBC that the Cayman entities had not been set up to evade tax. Asked by Haaretz, Colber’s media advisors stated that Jonathan Colber is an Israeli resident who moved from Canada to Israel 26 years ago, and who reported his entire income in Israel in compliance with the law, and paid all due tax throughout that time. Colber also reported, in compliance with requirements and beyond, about being the beneficiary of foreign trusts. He has no tax liabilities in Canada, which he left 26 years ago, they repeated.
The papers include correspondence about establishing offshore companies to buy property in Israel. An email exchange from 2016 involves an Israeli who asks to set up a company in the Caymans, to buy an apartment. He does not want to appear as a homeowner in public databases, he explains, and the foreign ownership would confer tax benefits relative to direct ownership.
The leaked documents also expose private jets owned through companies registered in tax shelters, again to minimize tax. A list dating to 2015 shows several dozen people, beneficiaries of offshore companies, who own executive jets. One such plane owner is Israeli Idan Ofer. The documents have numerous mentions of the Ofer family and its fortune. One describes a letter from an Ofer family lawyer to Appleby, asking for help in building the structure of a holding company for a private jet. Assessing the request, Appleby’s people write that they have to check whether Ofer has any American association (assets, citizenship) and indicate that his high public profile in Israel is a risk factor for the company.
A spokesperson for Ofer responded: “Needless to say that all tax aspects mentioned or implied in the article fully comply with the provisions of the law and are reported as required to the relevant tax authorities.”
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