The methods Mossack used, for its Colombian clients, included:
(1) The sale of real estate, often for cash, was artfully concealed, when the sellers elected to receive the payment in Panama, and not report it to Colombian tax authorities. Panama does not tax offshore transactions.
(2) The use of inflated invoices, sent from Panamanian companies, which resulted in zero profits for the Colombian corporation, and no tax bill.
(3) Exporting goods to Panamanian companies, affiliated with the Colombian taxpayer, but not disclosing that arrangement to tax authorities. The net result is that there are no reported profits in Colombia.
Colombian authorities will exact a 160% penalty, plus accrued interest, on all tax evaders that it identifies, as the result of the Panama Papers disclosures.
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