The 5 Most Bizarre Tax Deductions Around the World

(KevinDooley)

With tax season upon us, most people are concerned with just one thing: figuring out a way to not pay Uncle Sam any more than they have to. Some, however, take the concept of tax avoidance further than the rest of us. The quest to outwit the government has produced tax deductions, loopholes, and write-offs that boggle the mind, defy common sense and sometimes seem too outrageous to be true – and yet they are (ie., body oils, pet food, breast augmentation….). But be that as they may, there are other deductions, from around the world that might be even more unusual. The following are five of the most bizarre.

Bribes in Germany

You read right – according to BusinessWeek, it is actually permissible to deduct private business bribes in Germany. While the deduction is reportedly “rarely used”, it is nonetheless available to any German business person who discloses both his or her identity and the recipient of the bribe(s.) Many will no doubt be surprised that bribery is legal in Germany at all – much less tax deductible – and General Motors has come under fire for “…allegedly securing kickbacks from suppliers who help build their plants.” For its part, BusinessWeek recommends that Germany “…end the bribery deduction” (claimed to add 20-30% to the cost of public contracts) in its ongoing quest to cut down on corporate fraud.

Big Babies in Italy

(MichaelMX5TX)

We all know someone who refuses to leave the comfort of their mother’s home despite pushing 30. In Italy, however, the problem is apparently so bad that a third of all men over 30 live at home. Italy’s “mama’s boy” epidemic caught the attention of lawmakers in 2008, including Economy Minister Tommaso Padoa-Schioppa, who exclaimed, “…we must send those we call ‘big babies’ out of the house!” According to Reuters‘ article “Uproar Over Tax Breaks For Big Babies,” Padoa-Schioppa’s solution was a €1,000 tax break for twenty and thirty-something Italian renters. Speaking in support of his proposal, Padoa-Scioppa elaborated, “…with the budget, we’ll help young people who don’t marry and still live with their parents get out of the house.” Critics of the break cite Italy’s, “…increasingly geriatric society where the best jobs are often occupied by those over 50”, rather than generalized laziness, as the source of a problem far too complex for a €1,000 tax credit to solve.

Whiskey in Japan

(Organic.Matter)

Nothing sparks accounting ingenuity quite like tax avoidance. A case in point was the Japanese practice of “watering down” brandy and whiskey bottles in 1993. In order to qualify for tax rates, “…approximately one-fifth of that which would apply to the same amount of undiluted whiskey,” Japanese whiskey makers added water to bottled alcoholic beverages, taking advantage of the fact that European Community members were prohibited by their own tax laws from following suit. The European Business Council’s Alcoholic Beverage Committee was quick to protest Japanese beverage makers’ sneaky tax dodge, declaring that, “…it is impossible for European whiskey to compete” in an interview with the UK’s Independent.

Witches in the Netherlands

(Dennis Defreyne)

Most of us wouldn’t name witchcraft as an activity that ought to be subsidized with tax breaks, but the UK’s DailyMail begs to differ. Meet Margarita Rongen, a Dutch “tax-verified witch.” According to DailyMail, Dutch witches were, “…guaranteed a financial treat when the Leeuwarden District Court reaffirmed their legal right to write off the costs of schooling” up to several thousand dollars in deductions. The controversial write-off provoked serious criticism back in 2005, but according to Rongen, (clad in “…flowing black velvet robes, a chain of stone amulets and a wicca star”), the tax break had actually been around for quite a while. The only difference, Rongen said, is that the deduction now has the support of a judge. Still, it’s easy to see why Dutch citizens might be unhappy about tax breaks going to support, “…healing with herbs and stones, making potions, divination and fortune telling with crystal balls and hieroglyphs.”

“Culturally British” Games

(McClave)

The video game industry hardly seems in need of tax break stimulation, but according to Joystiq, they’ll get it anyway – at least in Britain. As recently as June 2009, word out of the UK was that the government “…has committed to work with the industry to collect and review the evidence for a tax relief.” But here’s the rub: in order to reap the write-offs, the game(s) in question will need to qualify as “culturally British.” How cultural Britishness will be determined is unclear, but some have suggested a criteria similar to those used by the UK’s Film Council which requires films to score at least 16 of 31 points on “…cultural content, contribution, hubs, and practitioners.”