This is just plain incorrect.
The law doesn’t allow CEOs to write off yachts.
Whether or not regulators investigate them is another matter.
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.
here in Australia entertainment expenses are written off at a lower rate than other business expenses.
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.
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.
