The Australian Tax Office is investigating 800 taxpayers linked to a Panama law firm.
The cases are part of a leak of more than 11 million documents.
Dozens of politicians, including present and former world leaders, are mentioned in what has been described as an extensive investigation into the offshore financial dealings of the rich and famous.
The so-called Panama Papers could represent the world's largest ever leak of classified documents.
More than 11 million confidential internal documents have been leaked from a Panamanian law firm, Mossack Fonesca.
The leak contains 40 years' worth of documents revealing the details of 21 global tax havens.
Mossack Fonesca sells shell companies around the world.
Shell companies, or offshore companies, can be used to hide the ownership of assets.
The practice is often associated with attempts to conceal taxable income or with money laundering, but it is one that is legal.
The German newspaper Sueddeutsche Zeitung first received the data over a year ago and shared it with the International Consortium of Investigative Journalism.
The cache reportedly details the offshore holdings of a dozen current and former world leaders, as well as businessmen, celebrities and sports stars.
Associates of Russian president Vladimir Putin and Iceland prime minister Sigmundur David Gunnlaugsson are mentioned in the reports.
The Guardian newspaper took part in the investigation and has published a video on its website showing an interview with Mr Gunnlaugsson.
It is reported he owned an offshore firm that held millions of dollars in Icelandic bank bonds during the country's financial crisis.
When asked about the company, the Iceland prime minister insists its affairs are aboveboard before he walks out of the interview.
(Translated) "My wife sold a part in the family company. It was put in the care of a bank, and the bank made some arrangement, and this company was the result. I don't know how these things work, but everything is declared on the tax report from the beginning."
The Australian Taxation Office is now investigating over 800 wealthy Australian clients of Mossack Fonseca.
In a statement, the Tax Office said:
"Recently, the ATO received data in relation to a Panamanian law firm containing names of a significant number of Australian residents. Currently, we have identified over 800 individual taxpayers, and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong."
Labor MP Sam Dastyari has told the ABC the leak has revealed the true extent of the use of global tax havens.
"Individuals have been taking advantage of these loopholes as well, with small companies and private companies, and what these papers reveal is the enormity of it. Let's be clear, this trove of documents is looking at one firm, in one tax haven, and, of course, the large one is Panama. But there are places like the Cayman Islands, there are places in the Caribbean, there are places within Europe, there are many, many more loopholes and many, many more firms out there. This is just one, and it shows how big the problem is."
In a written response to the International Consortium of Investigative Journalism and its media partners, Mossack Fonseca said it follows all relevant laws.
It said it does not foster or promote illegal acts.
