Analysis. The publication of “the Paradise Papers” by The World and the 95 partners of the international Consortium of investigative journalists (ICIJ) has elicited some reactions in contrast. Some tax lawyers or editorial writers, have pointed to a supposed amalgam between optimization and fraud tax : the first, to be legal, would have been assimilated to the second, be illegal. The argument is the corollary being that if all of this is legal, there is no subject. However, the interest of these revelations is to make this apparent legality at the centre of public debate.
Even if the majority of the montages of tax optimization discovered by “Paradise Papers” are legal – some are not – they have nothing in common with the reliefs and exemptions that are decided upon by the State which can benefit the average taxpayer. In France, the law permits a family to invest in real estate to lower its taxes, that a company has the research tax credit, and that a number of professions, including journalists, have the benefit of tax relief. These tax loopholes have been created transparently by the public power, with one goal : to provide support to a sector, to stimulate the construction of housing, research funding… And these players are encouraged to use them until the legislature decides, one day, if he wishes, remove them.
“The Paradise Papers” show, on the other hand, how law firms and tax experts pare the laws and tax conventions between countries, to flush out the flaws and the benefit of their customers. All in the secret of paradise offshore more or less regulated, out of reach of the authorities of their country of origin. These flaws have not been provided for by the law, they have little chance of fulfilling a public policy objective.
A gigantic scheme of avoidance
You can pledge that the tax exemption built in 1982 in the tax treaty between…