I was about to agree when I remembered what I saw mere hours ago.
It is actually not unavoidable, at least not for rich people buying very expensive things. The example was about how Lewis Hamilton bought his own jet plane.
The plan basically revolves around 2 shell corporations, both conveniently owned by him. One shell corporation buys this jet for ~20 Million Euros.
The second shell corporation then requests to lease this jet from the first shell corporation. This makes the jet a business asset, so the first corporation can reclaim the ~4 Million Euros in VAT (assuming 20%). Fortunately for Hamilton, the second corporation allows him to use the jet whenever he wants.
And the law firm that performs this magic gets ~10,000 € per year.
As a bonus, the lawyers can claim that the corporations are not shell corporations since they obviously have business transactions.
The dark side of globalization I guess.
Another example I heard about recently was Nike. They make all their worldwide profit in a subsidiary in the Ntherlands. The Netherlands do not tax subsidiaries, only the parent company. Since the parent company is in the US, the Netherlands don't care. The US on the other hand, do not tax the parent company for the profits of subsidiaries (made in other countries, forgot the details). Either way, Nike pays no taxes and just accumulates money for shareholders or whoever.
There are most likely ways to stop this. There was talk between EU ministers about taxing income instead of profits, mnight make sense for global corporations. Should be harder or impossible to claim you have no income in Germany but 30 million customers every year. Though if they were to set a minimum income to save startups from paying enormous taxes without making profits, there will be 3 million amazon subsidiaries with 10 customers each...one loophole we can avoid now.![]()
Bookmarks