Hundreds of Australians under investigation following Panama tax leaks

The Australian Taxation Office (ATO) is investigating more than 800 high-earning Australian clients of Panama law firm Mossack Fonesca, in the wake of the massive leak of confidential documents linking the firm with widespread tax evasion.

More than 11.5 million documents were anonymously leaked to the International Consortium of Investigative Journalists (ICIJ) in Washington, D.C, which prompted a 12-month investigation into the allegations of widespread tax avoidance and embezzlement over the last 40 years.

In Australia, ATO deputy commissioner Michael Cranston told Fairfax Media that the agency would be investigating hundreds of clients who had used the Hong Kong office of the law firm to potentially avoid paying tax.

"Currently we have identified over 800 individual Australian taxpayers and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong," Cranston said on Monday.

"Some cases may be referred to the Serious Financial Crime Taskforce."

The ATO said it had "already begun taking action on those cases" highlighted in the leak, which showed Mossack Fonesca ignored requests from Australian authorities to stop representing those accused of fraud.

"ATO intelligence on tax evasion comes from a variety of sources, including from concerned citizens, advisers, partner agencies and international bodies," Cranston said.

"For example, the ATO has raised tax liabilities of around 300 million U.S. dollars from data supplied by confidential informants. "

The Panamanian law firm is considered one of the 'big three' providers of tax haven registry services - for clients who have legitimate reasons for setting up offshore bank accounts, but the leak has also revealed it has a long history of snubbing government agencies and helping those intent of laundering and embezzling money for drug and arms dealers.

The ATO said the leak revealed names of those who had previously been under Australian government investigation, but also included a "large number of taxpayers who haven't previously come forward."