auto racing

Formula 1 champion Hamilton avoided taxes on jet: leaks

6 Comments
By PEDRO PARDO

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The more you have, the more you want,

2 ( +3 / -1 )

On another thread recently, I said it was harder to avoid tax on the purchase of goods than on income. Show's how little I know.

2 ( +2 / -0 )

This is small beer compared to what other people (read some heads of state) are doing.

2 ( +2 / -0 )

In the U.S. tax avoidance is legal, but tax evasion is not. Don't know if it is the same in the U.K.

1 ( +1 / -0 )

In the U.S. tax avoidance is legal, but tax evasion is not. Don't know if it is the same in the U.K.

Avoidance - minimizing your tax obligations within the law - is always legal, but unpopular if you're exposed.

Evasion - hiding income or property so that it's not exposed to taxation - is always illegal.

2 ( +2 / -0 )

On another thread recently, I said it was harder to avoid tax on the purchase of goods than on income. Show's how little I know.

Yes, I was of a similar mind, but was thinking more in terms of houses and cars, than extremely mobile items like private jets. (I wonder if there are similar schemes involving private yachts.)

I'm not sure how you do actually prevent someone from paying zero tax on a private jet, if they purchase their private jet in a jurisdiction where there is no sales tax?

Avoidance - minimizing your tax obligations within the law - is always legal, but unpopular if you're exposed.

Well, unpopular amongst some people. 

If it's legal then I'm personally OK with it. If I buy perfume tax free at the airport or a country with no sales tax, and then carry the perfume with me and then use it in a place where there is a 20% VAT, I have avoided paying the 20% VAT on the perfume, by buying in a jurisdiction with no tax. Might not be popular amongst some people, but seems to be pretty acceptable given the abundance of tax free shopping at airports.

Doing this sort of thing with larger items like private jets seems like it is essentially legit too. Conversely, why would anyone buy a private jet in a place with high consumption tax? They'd have to be very care-free with their money.

I don't understand the full details of what Hamilton paid versus the VAT rebate he got, but I suspect that he could have avoided the consumption tax legally without paying loads of money to his tax advisors for a fancy scheme. Possibly I'm missing something about his circumstances though.

0 ( +0 / -0 )

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