More than 120 high income earners drawn into tax scandal

More than 120 of Australia's high-income earners have been linked to an unnamed Hong Kong offshore tax haven advisory business as part of a tax office probe announced yesterday into 800 Australian taxpayers.

Those 800 were among at least 1000 Australian links to companies using a legal firm - Mossack Fonseca - based in the offshore tax haven of Panama.

The details of the Australian links were revealed after news broke that 11.5 million documents from Mossack Fonseca had been leaked to German newspaper Suddeustche Zeitung and the International Consortium of Investigative Journalists.

The leak of the "Panama Papers" has sparked worldwide action from tax regulators.

Among those named in the documents are 72 current or former heads of state and about another 70 public officials, high-level business figures, or their friends and relatives, who reportedly have used the Panamanian firm to house funds in offshore shelf companies.

The files reveal offshore companies linked to political leaders including Chinese President Xi Jinping, Ukraine President Peter Poroshenko and the late father of British Prime Minister David Cameron.

Mossack Fonseca denied helping people launder money, saying it had never been charged with criminal wrongdoing.

While using offshore accounts to keep funds is not illegal, it has been linked to corruption scandals and large-scale tax avoidance schemes.

ATO deputy commissioner Michael Cranston said the leak had provided the tax office with information about some taxpayers it was already pursuing, some who had come forward during other investigations and "a large number of individuals who haven't previously come forward".

He said in a statement the ATO was already taking legal action against some "high wealth individuals" whose tax arrangements had come to light through the Panama Papers.

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