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Extraordinary Tax Deductions

Extraordinary Tax Deductions

While both death and taxes are certainties in life, what’s a little less certain are some of the circumstances surrounding them. Specifically speaking, when it comes to what can and cannot be tax deductible.You could be searching high and low for something to claim, but we’re pretty sure that you couldn’t beat any of these following examples for the strangest of tax deductions from around the world.

US – Tax Deductible Hot Air Balloon Rides (As Long As it’s On The Ground)

While there are many strange regulations relating to tax and what you can and can not claim back on your tax form, this is probably the strangest of them all. No, it’s not the ‘charitable donation’ claim you can make in South Carolina when you donate a deer carcass or the ‘personal effects’ you can claim for the costs of moving your pet, it’s Kansas’ rule that a hot air balloon ride is tax-deductible – but only for as long as the balloon remains on the ground. This is because while a hot air balloon is grounded, it is considered to be within a (taxable) ‘place providing amusement, entertainment or recreation services’ – however, while it’s in the air, under the federal Anti-Head Tax Act, it’s considered to be transporting passengers – which is not tax-deductible. Long story short – as long as your hot air balloon ride stays tethered to the ground, you can claim tax back on your ride – but as soon as you leave the ground, you can’t.

FIFA’s International, Moving World Cup Tax Haven (With Very Few Tax Deductions)

Football is more than just an obsession for many – it’s also an accountant’s dream when it comes to the question of what is and isn’t tax deductible. As reported by the BBC, nations wishing to host the World Cup tournament must do so on the agreement that they exempt FIFA, the international football organization regulating the tournament, and its subsidiary companies. Therefore, countries looking to make a hefty sum by hosting the World Cup end up recouping far less than they would have wished as very few if any of the related costs are taxed, making any tax deductions available almost non-existent. With FIFA demanding that all income tax, customs duties and VAT are waived (also applicable to scores of FIFA’s affiliate broadcasting companies and merchandising companies, among many others) for every World Cup hosted, it means that for the $2.8 billion they make for each game, they only pay around $1 million in local taxes – of which they receive their usual tax deductions for providing hospitality, entertainment and the like.

 

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Britain’s ‘Culturally British’ Films Tax Deductions

Britain’s culture is its heart and pride – so much so that Britain offers tax deductions to films produced in the UK and which the British Arts Council consider as ‘culturally British’. The way it works is a little complicated, and is subject to a points-based ‘culture test’, which awards points to films with –

  • Cultural content – up to 16 points,
  • Cultural contribution – up to 4 points
  • Cultural hubs – up to 3 points
  • Cultural practitioners – up to 8 points

The rules for each section of the test are quite in-depth, meaning that wannabe filmmakers need to do more than throwing a few Union Jacks or London landmarks into the shot. Instead, they need to set their film in the UK (receiving 4 points), have their film showing a diversity of British culture, heritage or ‘British creativity’ (4 points) as well as have an original script, which is spoken mainly in English (4 points). Under these test rules, should a film be qualified to receive tax deductions, they need to receive at least 16 of 31 points in order to get a 25% tax break.

Canada’s Tax Deductible Toys In Cereal

Some of you might remember the days of pouring out our morning cereal to find the toy hidden inside it, but in Canada, cereal companies are also big fans of the toys in their product as it’s highly tax deductible for them. As long as the toys are anything other than ‘beer, liquor or wine’, the toys are exempted from an extra federal tax. However regular, toy-free cereal, alongside any theoretical cereal containing alcoholic toys, are taxed at the regular rate, receiving no exemptions.

 

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Germany’s Tax Deductible Bribes

Up until 2002, claiming back the costs of bribes made was legal in Germany. Following on from that and maybe needless to say but, under certain circumstances, bribes themselves were legal too. While the regulations around tax-deductible bribes didn’t come into play that often, there were certain rules to doing so: you would have had to give names of the people you had bribed, as well as details of the circumstances surrounding the bribe. This was also subject to certain further regulations and exceptions by the Organization for Economic Co-operation and Development, including that which said bribes were not tax-deductible if ‘either the briber or the recipient had been subject to criminal penalties or criminal proceedings which were discontinued on the basis of a discretionary decision by the prosecution’. Shockingly, but perhaps unsurprisingly, legal and tax-deductible bribes added between 20-30% to government contracts, but it still took Germany until 2002 to end the practice of both.

Ireland’s Tax Deductions and Exemptions for Art

Tax and art are not the most natural cohabitors, however, in Ireland, artists (we’ll define that in a moment) are subject to both tax deductions and exemptions on the sale of their work. So how do artistic creativity and the less creative world of taxation go together? Well, artists must first file a claim with the Revenue Commission. They are responsible for deciding whether the said artist’s work counts as original, creative, and carrying cultural or artistic merit, in either of the following categories: books and other written literature, theatre and plays, musical compositions, paintings and other photo art forms and sculptures. According to the above specifications, a work of art (defined by those five categories) has cultural merit if ‘its contemplation enhances the quality of individual or social life as a result of its intellectual, spiritual or aesthetic form and content.’ An art piece is considered as having artistic merit if, ‘its combined form and content enhances or intensifies the aesthetic apprehension of those who experience or contemplate it.’ The maximum amount of tax exemption available is €40,000 – and in addition to this, artists are able to claim their usual tax-deductible expenses as self-employed artists.

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If you’re ever unsure if you’re getting the right refund, or if you’ve missed an opportunity to claim something back, then VATBox’s automated solutions can help you get it right with each and every claimable expense. Whether it’s a spur of the moment trip to an African safari (claimable as long as it relates to your business) or a wad of printer paper, VATBox can make your taxation process run smoothly, automatically and fully compliant with the latest rules and regulations.

 

 

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