Portugal’s Tax Authority has admitted that there is little its staff can do to those caught with offshore accounts that were revealed in the Swissleaks case.
More than 600 names of account holders that had direct links to Portugal were uncovered and published by the International Consortium of Journalists but under Portuguese laws, any prosecution or tax demand is not possible due to the amount of time that has passed.
But the Ministry of Finance admit that HSBC Geneva account holders are likely to get off scot free as the Swissleaks records are from 2005 and 2006 and anyway, to mount prosecutions, the Portuguese Tax Authority would need formally to ask the Swiss authorities for the information by way of a rogatory letter.
In response to a question from the Left Bloc, the Ministry of Finance confirmed that despite having data on these customers, it is hamstrung by the laws that limit the right of tax authorities to collect taxes on income and capital after set periods, in this case - four years.
The ministry claims that the information received in the Swissleaks files is insufficient for its staff to work whether a fiscal crime has been committed and that the "information alone does not establish the existence of tax avoidance schemes and money laundering, nor the non-declaration of income," said the ministry in a written response that will bring relief to many HSBC Geneva account holders.
Portugal has an agreement with Switzerland to exchange financial information but only from January 2014. The Finance Ministry has asked the Swiss tax authorities for details of account holders for the year 2014, to "identify situations or possible fraud" but is still waiting for a reply.
The Tax Authority was a bit more helpful when answering questions about the ocean of money leaving Portugal, confirming that since 2010 €10 billion has been transferred to offshore accounts.
In 2011 alone, €4 billion was transferred offshore, coincidentally this was the year that the Troika took control of Portugal’s finances.
The €10 billion figure is from 2010 to the end of 2015 but only represents the sum of those amounts reported by Portugal’s domestic banks to the Bank of Portugal.
Much of this €10 billion has been shipped off by Portugal’s corporate sector with individuals transferring a remaining €675.5 million.
Panama was a popular destination before the Panama Papers trashed this island's image as a secure hidey-hole for untraceable money. In the last five years Panamanian institutions have received €1.301 billion originating from Portugal.
Again, the data from the corporate sector is drawn only from adding up the amounts reported on Declaration Modelo 38 which requires financial institutions to send to the tax authorities information on transfers made by sole proprietorships and companies.
Onshore in Portugal, the level of savings held by the public is at an all time low as families do not have money to save and those suffering long-term unemployment are spending any savings they may have accumulated in better days, just to get by.
For those companies and individuals with money secreted in tax havens, the net is drawing in at speed.
The Grupo Espírito Santo offshore company ES International, responsible for paying €300 million to journalists, mayors, politicians and business associates, is undergoing a forensic review to see who got what and when, and whether income was declared by the recipients.
This exercise, made possible by the Panama Papers bombshell, also will be subject to the same timing laws as the Swissleaks files. Meanwhile the nation is on stand-by to read with interest the names of those implicated and their lame excuses.
Comments
It's unfortunate that the Panama papers were leaked to the ICIJ who are very selectively releasing information. Presumably they don't want to offend their corporate funders (listed here https://www.publicintegrity.org/about/our-work/supporters). Wikileaks might have done a better job.
Swissleaks data was released into the Public Domain in 2015. It relates to HSBC accounts held between 2006 to 2007. At the very least the data will show the origin of the money. Which could be very illuminating, particularly if this is an EU Grant Holder and the project the money was intended for was never finished. And the rogatory letter would show where it subsequently went to. So can be tracked further.
But here we have yet another example of 'non-investigation'. This time of tax affairs. All confirming that the 1,000 rich and powerful Portuguese families live entirely separate lives to the hoi poloi and must not be bothered with everyday matters like making accurate tax returns.
https://www.icij.org/project/swiss-leaks/explore-swiss-leaks-data