8 Bizarre Tax Scandals With Billions In Damages


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Over recent years, there have been more and more scandals about people not paying their taxes. That's not a coincidence since tax avoidance costs the government a whopping $600 billion yearly. Even though not much has been done to stop it, leaks have shown how big of a problem tax evasion is among the world's ultra-rich.

The Panama Papers

In April 2016, a whistleblower gave 2.6TB of data to the Süddeutsche Zeitung reporter Bastian Obermeyer. And what those 11.5 million records showed shocked the whole world: a huge network of offshore bank accounts in faraway tax havens that billionaires used, people in power, and government officials.

Because of the leak, information about more than 200,000 offshore shell companies, all of which were run by the same law firm, Mossack Fonseca, became public. They proved what many people already thought: that most of the world's super-rich pay almost no taxes. In addition to many famous names, the long list of almost 40,000 individual and business clients includes 12 global leaders and 128 public officials.

Everyone with a lot of money seems to be involved in this huge scheme to avoid paying taxes, from the movie star Jackie Chan to the former UK Prime Minister David Corbyn and the Spanish Royal Family. Even though this leak didn't reveal much about what the world's richest people do, it did help governments recover more than $1.2 over the past four years.

The Paradise Papers

The Paradise Papers are not the same as the Panama Papers, even though they have a common link and were published by the same reporters. Instead, they are a diverse range of over 13.4 million documents that show how many people and companies invested their money in offshore accounts. More than 120,000 people and companies are named in the leaks, and stories and details are still coming out today.

Still, compared to the Panama Papers, the Paradise Papers didn't get nearly as much attention from the media. This is because the schemes revealed by this leak are technically legal, even though they are immoral and cost governments billions of dollars. The papers showed how corporations move money through companies in other countries to avoid paying income taxes. In some cases, they did not pay any income taxes at all.

Apple, Nike, PokerStars, and extraction giant Glencore are the companies named in this leak. Politicians like Prince Charles, Queen Elizabeth II, US Secretary of Commerce Wilbur Ross, celebrities like Shakira, Madonna, and Emma Watson, and even top universities like Oxford and Cambridge are named.

Germany's €31.8 billion ex/cum plan

In 2017, Christoph Spengel, a German financial scientist, uncovered a series of cum/cum and ex/cum schemes that, according to his calculations, had charged the German government a staggering €31.8 billion since 2001, making it the biggest tax fraud arrangement in German history. Both national and international banks and fake tax refunds are involved in these schemes.

The last of these schemes was finally made against the law in 2016. Before that, they caused billions of dollars worth of damage around the world. So far, about €1.1 billion of the nearly €32 billion has been reclaimed, according to the German Ministry of Finance. But that's just a small part of the whole. In this case, the damage has already been done.

Pfizer's ongoing tax scam

From 2010 to 2012, Pfizer made more than $43 billion worldwide, and its offshore accounts made as much as $73 billion. But in the US, Pfizer lost $9 billion during the same period, which means they paid no taxes. This is an extreme case of a company that moves money around to avoid paying taxes by taking advantage of existing tax laws and multiple offshore financial havens.

Even worse, the government gave Pfizer $3.4 billion in contracts during those two years. So, not only did they avoid paying taxes on $43 billion, but they also got a boost from the government that they were essentially cheating. When this was written, Pfizer had not yet been punished for its schemes to avoid paying taxes. No legal action is being taken to get back any of the billions of dollars in lost tax money.

Citigroup's $11.5 billion robbery

In 2012, Citigroup made $42.6 billion in profits outside of the US, but it paid no taxes in the US at all. They stole $11.5 billion from the government of the United States. This isn't a surprise because the multinational banking and investment company is one of the best lobbyists in the US. They spend $6 million annually to ensure their interests are heard in Congress.

They do this by hiring people who used to work there. About 85% of Citigroup's lobbyists are either former members of Congress or people who used to work for them. Like most transnationals, they have a lot of power and can change the rules to suit themselves.

General Electric's tax rate is 2.4%.

From 2002 to 2012, General Electric made $88 billion in profits in the ten years but only paid a small 2.4% tax rate. That is only a tenth of the 24% tax rate that the average American worker has to charge yearly, and they don't even get 0.00006% of that money back.

Not only that, but the government also gave the company $29 billion in subsidies. General Electric's tax return for 2011 is said to be a whopping 57,000 pages long, which shows how far the company will go to avoid paying its fair share of taxes.

Abuse of loopholes by Big Tech

A non-profit Fair Tax Mark report says that the so-called Silicon Six companies Amazon, Apple, Facebook, Google, Microsoft, and Netflix have avoided paying more than $100 billion in taxes in the countries where they do business from 2010 to 2019. This number doesn't just include the US; it includes everywhere these companies do business. People do this kind of thing everywhere, and everyone does it.

One of every five of Britain's biggest companies don't pay taxes.

In 2019, a report from The Mail on Sunday discovered that one in five of Britain's biggest FTSE 100 group companies paid no taxes and sometimes even got tax credits from HM Revenue & Customs. Big companies like BP, Royal Mail, and Centrica are named in the report.

Last year, BP, for example, made £5.6 billion in profits and still got a £134 million tax credit. So, the transnational oil company got more tax money in the UK than it paid. The report also said that some executives were paid more than their companies spent on taxes that year.

On top of the $5.8 million bonus he got for joining the company, Rico Back, the CEO of Royal Mail, was paid £1.4 million. This might make sense if you consider how much the company made in the UK that year: £39 billion. What isn't right, though, is that Royal Mail also got a £93 million tax credit that same year.


Tax evasion is a very big problem. As we've seen, everybody from multinational companies to royalty to movie stars does their best to avoid paying their fair share of taxes. The eight scandals we talked about are shocking, but they are just the iceberg's point. The problem is much, much worse than what people think.