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The Have Yachts
(lemmy.world)
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this post was submitted on 29 Apr 2024
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Can't they just buy in the name of a company, which would be a 'business expense', which is kind of a write off?
They would have to justify how it is a part of the companies operations. In theory at least.
So a private jet to fly your execs to business meets? Ok.
A yacht? Maybe for entertaining customers? I don't know about the US, but here in Australia entertainment expenses are written off at a lower rate than other business expenses.
A yacht can have meeting rooms, you can receive clients in these meeting rooms for business purposes, making it therefore a business expense.
Sorry mate. Not really correct.
If an Australian company pays for entertainment expenses for staff, it's considered a fringe benefit and fringe benefits tax is payable. It equates to almost the cost of the actual expense. So if a company pays $10k for an employee to take a holiday, they'll have to pay almost $10k in fringe benefits tax, but they do get a deduction for the whole $20k, which will save them $5k in income tax.
Yeah, so to simplify, written off at a different rate.
Not really, at all.
It's written off at the same rate, while being subject to a whole other type of tax, which means the company pays more tax, rather than less.
Ok, so the point I was originally trying to make was that claiming a yacht as an entertainment expense was less attractive. Would you agree?
If sticking a fork in your eye is "less attractive" than eating icecream then sure.
... but let's be honest, that's not what you were trying to say. You were just plain wrong. Get over it. No one cares.
The only one who can't admit they were wrong here is you.
It doesn't work like that. Expenses need to be "necessarily incurred in the course of producing income". Just be cause a company pays for something doesn't make it tax deductible.
I can't have a yacht business meeting without a yacht now can I?