From Japanese surrogate mothers to Ronaldo's transfer to Juventus, taxes are everywhere!
We need to talk about taxes, taxes, taxes and all the rest is bullsh*t is what Rutger Bregman said at a meeting in Davos. And if Rutger says it then we are going to do just that, with today's topic: notable tax news. In the sequel you will read what is the real reason why Ronaldo went to Juventus, how Japanese surrogates are functional for Chinese officials and the accounting trick behind the switch between Pjanic and Arthur. Read and enjoy!De fiscale reden achter de transfer van Ronaldo naar Juventus.
Messi, Ronaldo, Messi, Ronaldo an eternal discussion about who is the best footballer. Jan the Taxman keeps himself aloof in this discussion and focuses mainly on the similarities. Because besides the fact that both men can kick a nice ball around, they are also known as notorious tax evaders. Both players have made settlements of many millions to avoid imprisonment. Of course, the evasion is not entirely culpable, with a top rate of 52% and an annual salary of 138 million, there is not much left after the tax payment.....
Several media outlets even claim that a purely fiscal reason underlies Ronaldo's transfer to Juventus. As befits a good journalist, Jan the Tax Man did some research and called his Italian cousin Jano the Tax Mano to get more information. Jano told him that this is true and that it is about the budget law passed in 2017. This law stipulates that individuals who have lived abroad for more than 10 years will pay a maximum of
€100,000 on their foreign income. So a huge advantage for Ronaldo who has many incomes from abroad in addition to his usual salary. Think for example of Nike or his own brand CR7. So you see how big the impact of taxes are and forget all Ronaldo's empty statements about a sporting challenge, new opportunities and all that nonsense. There is only one reason and that is TAXES!
Japanese surrogate mothers as a remedy for taxes.
Of course, Jan the Taxman continues to broaden and improve his tax knowledge. He also enjoys reading books about taxes in his spare time. Thus, in the book moneyland written by Oliver Bullough, he stumbled upon a very special story. Of course he could keep this to himself but Jan the Tax Man likes to share his knowledge with others so here is a nice little story.
The Japanese newspaper Mianichi Shimbun (who doesn't know it) reported a very special story in 2016. Highly placed Chinese officials would in fact have eggs taken from wives, fertilize them and then have them placed in women in Japan. The idea behind this? Japanese law has a loophole regarding surrogacy. It is not regulated and so it is possible for the surrogate mother to appear as the official mother on the child's birth certificate. This, in turn, makes the child (biologically of Chinese descent) eligible for Japanese citizenship. A corrupt official can thus transfer his assets to someone to whom he ostensibly has no relationship. This causes a degree of anonymity that is difficult to pierce and comes in handy if flight is necessary.
Arthur out - Pjanic in.
Sorry Rutger sorry, but we will not end this blog with a story about taxes. Unfortunately ... but that doesn't make it any less interesting! Last year there was much surprise when it was announced that great talent Arthur was traded for the nevertheless quite elderly Pjanic and 12 million euros. A strange deal for the average soccer connoisseur but an accounting trick can totally change your outlook.
The deal includes Arthur going to Juventus for 72 million and Pjanic in turn going to Barcelona for 60 million. But why not just swap the players and transfer 12 million you might think. A valid line of thought but accountants look at this differently. Players are nothing but machines for a normal company. You buy a machine for a certain price and decide how much of that cost you are going to write off from your profit each year. So you don't deduct the costs you incur when you buy it all at once from your profits but spread them out over several years. Barcelona bought Arthur in 2018 for 31 million and by now his value on the books had fallen to 20 million (due to depreciation, that is). So when selling, Barcelona makes a profit of 52 million. And here comes the beauty, unlike costs you are allowed to book revenues directly. So the costs for Pjanic (60 million) are spread over several years and the revenues (72 million) are booked directly, a fat profit! As someone interested in taxes, you may be thinking, "more profit also means more tax, why do you want that?" Good question! The answer? The Financial Fair Play rules.