Tax morality statement

Court Philippe-Chatrier, 1999, woman’s final of the French open. Match point Steffi Graf. Martina Hingis plays an underhand serve. Graf is caught by it and loses the point. The rules of the game allow an underhand serve. However, by unwritten tennis standards it’s considered to be cowardly and unsportsmanlike. So, the French public had no respect for this play by Hingis. Minutes and minutes of ‘booing’ followed. Similar sorts of “gentleman’s codes” can be found in all kinds of sports.

The world of tax has gray area’s as well. According to tax legislation specific tax structures are legally possible but they are contrary to the spirit of the tax law (in general). This is the field of tax avoidance. A basic principle is moving residency to a low tax jurisdiction, such as Monaco. An athlete travelling the world can make such change as they are commonly not at home. Sporadically athletes have been criticized for it. From a tax law perspective it’s allowed but it’s not in the spirit of the ‘game’.

Interesting enough moral codes, on and off the field, develop overtime and are impacted as well by facts and circumstances. It is therefor that the underhand serve of Michael Chang in 1989 on Roland Garros was tolerated by the public as he, due to an injury, had no other way to serve. And, these days (2022) the underhand serve is making a revival. It’s played, for example, regularly by Nick Kyrgios and being enjoyed by most of the public. In the world of tax, the development of a moral code by athletes is just seeing first light. Due to (social) media and documents like the “Panama Papers” tax information (and planning) from tax avoidance by athletes is gaining more visibility. And, visible or not, it’s also becoming an aspect to keep in mind. For example because it impacts who (sponsors) wants to be associated with an athlete.

We believe in a moral tax code very deeply. DB Tax Advisory creates the optimal tax position for athletes taking into account their career, personal life and tax law. We follow the rules. Sometimes boarders might be gray areas. It’s in those cases that we are guided by our moral code: we believe that the principle of paying tax is good. With paying tax a contribution is made to the world which helps the world to become a better place for fellow human beings. For the tax payer it creates a life that not only looks good on the outside but makes it feel good on the inside as well. Human integrity, of which tax morality is part, should be more than a set of (tax) rules. And, it should start with a drive from inside. We win and we play fair. Just like you on your field. #beyondwinning

Looking forward to play a fair game with you.
Florian

More on this topic at taxmorality.com – an initiative of DB Tax Advisory.