Panama Papers and the biz jet

[spitfire_sl]

https://panamapapers.icij.org

Over 2 terabytes of leaked info.
Summary: Rich people don’t like paying tax.

The Panama Papers leaks contain over 11. 5 million documents, involving over 200,000 offshore shell companies.

I can only imagine that as the leaks continue to be published, the true identity and owners of lot of the P4, VP and M- registered biz jets will be known. Or at least it will point in the right direction of who’s pulling the strings. Hiding behind a shell company does not seem to be a safe option anymore.

What is your take on this story? Are you even surprised? How do you think it will affect the biz jet scene?

[Delta12]

Maybe that finally gives us some idea how VistaJet could sustain that long on the market and underpricing everyone else all the time ?

[Deep and fast]

Are you saying their is more than one Flohr in their plan? :p

[controlx]

Think you'll find an awful lot of high profile Russian financing of larger business aviation concerns.....

[Avioactive]

Buying aeroplanes, large or small, has always been one of the most effective ways to move 'money' around the globe and obscuring the ultimate ownership of an aircraft (or even a fleet) is fairly straightforward. It's a lot easier to move a plane from one jurisdiction to another and flog it, than it is to move that house in Eaton Square. Many a billionaire have had stakes in all facets of aviation - airline fleets as well as business aviation assets. Ultimate mobile investment. Better than boats too.

[Fly4Business]

What is your take on this story? Are you even surprised? How do you think it will affect the biz jet scene?

First to your questions. No, I am not surprised about the number of companies, but I am surprised of the actual outcome of the leak, more down below. No, I strongly believe it will not have a big effect on biz jet business, maybe not even noticeable.

Lets keep it straight. There was a network (I never heard off before, so maybe no better then the shell company business in terms of public transparency) of more then 400 journalists with their editorial staff and whole whistleblower network, which worked on more then 11m documents in 2.6 terabyte of data from over 200,000 companies for over a year(!), scanning over 14.000 people involved and what did they come up with, after all that investigation power? Public name picking and the statement that they don't even know whether there was a single illegal action example. Yes, I am surprised.

I meet the guys doing international and fast business every day and their business highly demand quick business foundation and low company lifetimes for projects. I never dared to think about their activities really in detail, but I am surprised that such investigative power of maybe beyond thousand man-year does not reveal a single big bang scandal. There are not many parts of a society, which would withstand such an investigative power. Just think what would happen in your hometown of 14.000 people investigated by 400 journalists for a year, or what would happen to your local bank, if journalists would scan the bank accounts to find hints for illegal action? Would they find - nothing - and start name picking of the major and the council members?

This may just be a big media bubble. I hope to be proven wrong, but until examples pop up ...

[Global_Global]

Classic! :ok: Are you saying their is more than one Flohr in their plan? :pNow on the topic: it is about time that these SPC are all clear and out in the open... It never stops amazing me that the little shop around the corner that is struggling is paying the full whack tax wise while the Amazons, Starbucks pay next to nothing just like these Oligarchs and you name it. :E

It will hurt our business as I have not been on an aircraft yet that was not owned by an offshore SPC....:rolleyes:

[His dudeness]

Summary: Rich people don’t like paying tax.

Not only them, I don´t LIKE paying taxes either. Questions is, can I avoid the miserable "thing" ? No I can´t, they can and do.

[RedTree]

Maybe that finally gives us some idea how VistaJet could sustain that long on the market and underpricing everyone else all the time ?

How does wealthy people hiding tax mean anything to VistaJet or Thomas Flohr? It means a lot to the tax payer, but a wealthy person avoiding tax doesn’t mean this tax goes to VistaJet.

Perhaps VistaJet is just good at what it does? Ever considered that?

[galaxy flyer]

Lower the tax rates in the US and Europe and much of the problem goes away. High tax rates are the incentive to hide money. OTOH, tin pot dictators will steal from their victims, I mean citizens and need to hide their ill-gotten gains.

GF

[Fly4Business]

@GF: it is not only rates, it is speed as well. In certain countries it takes too long to do i.e. a project company and once it is founded, you don't get rid of it after use easily. When doing a 6 month project with a dedicated company, in certain "developed" countries it takes 6 to 9 month in advance to do the foundation and at least 12 month further running the zombie after declaring end, so you have at least three annual accounts filing limbos and bureaucracy, for half a year of real work. Until somebody finds a way to reduce such stupid administration overhead, there is a need for the fast and easy way.

[Avioactive]

Re the comment on setting up shell companies to help move some money around the globe and how long it takes to process those and then close them down, it is the case that certain offshore aircraft registers can incorporate an aircraft onto those registers in 24 hours, that's a pretty damn fast way of transferring a multi-million dollar asset from one place to another.

[Global_Global]

Lower the tax rates in the US and Europe and much of the problem goes away. Well if we ALL pay our normal share of taxes the overall taxes rate could go down... Now the large group with the least pays the highest percentage while the ones with the most pay the least... :ooh:

[His dudeness]

Lower the tax rates in the US and Europe and much of the problem goes away. High tax rates are the incentive to hide money.

Nope, not true IMO. The rich ***** will ALEAYS try to avoid taxes, no matter how low they are.

Have a look at Amazon, just as an example, they were able to negotiate a 0.9% tax rate in Luxembourg for their european ops. Still they undercut pay rates etc.

In the EU, we need to get rid of the tax havens. That Ireland, Netherlands, Malta and Luxembourg for starters.

And any politician granting them special rates (such as a certain Mr. Juncker) need to go to jail and the key on that cell needs to be thrown away.

BIG TIME:

[Fly4Business]

Well if we ALL pay our normal share of taxes the overall taxes rate could go down... Now the large group with the least pays the highest percentage while the ones with the most pay the least...
? No, the large group of about the lower half of the citizens does contribute less then 10 percent to total tax income and the top 10 percent pay well above half of all taxes. There is a very, very small group of wealthy people that are hard to measure by employee views, because almost all of them are self employed/company owners. If you look at their tax load you have to combine the view on company taxes plus individual taxes and if you do so, you will have quite some surprises how much this group spends for taxes, because their entrepreneurs actions are taxed twice. They also take personal risk as entrepreneurs to an extend no ordinary employee will ever accept. The discussion should better be done on a holistic view and picture will change dramatically. I cannot count how many of my friends always take my turnover as self-employed for comparison to their salary as a dependent employee and that is simply wrong and Apples to Pears. In a "democracy" voters are purchased by tax money and these are cheaper on the low end, because only the number counts.

[space-shuttle-driver]

Every pilot employed on a business jet is part of some food chain involving some tax-heaven.
Some pilots work for dictators, some for oligarchs, some for shrewd businessmen, some for criminals, some for sportspeople, politicians. Some politicians are member of all those groups mentioned.
Some business jet pilots are employed by honest entrepreneurs. I guess it's the very small minority.
Panama-gate will take some of those folks down. We will hear from some of our pilot-colleagues that their airplane is grounded and for sale. Russian sanctions, war in Ukraine, economy in China, decline in oil price and the associated demise of bizav (in Turkey, as one example)...now Panama!
I would not throw stones at our bosses and the way they conduct their business.

[His dudeness]

As far as I can see into it -our airplane belongs to a "big stock" company - we haver never in the last 9 years made a "private" flight as far as I can tell and I have even to report what catering for which passengers has been bought, which is deducted from the allowances of these passengers. I could be wrong, but I honestly doubt that in our case and in fact all of the aircraft around us on our home base there is a possible tax avoidance. (as they have similar schemes for the catering and whatnot) One of the I think now 12 jets on our little airfield is foreign registered, all the rest is D and for our airplane I know for sure that is was paid for from the regular account of our company. All of them are owned by German companies and none has changed ownership as far as I can tell.

[Global_Global]

? No, the large group of about the lower half of the citizens does contribute less then 10 percent to total tax income and the top 10 percent pay well above half of all taxes. Those are too different things: it is about the rate they pay:

The Buffett rule
The so-called Buffett rule refers to billionaire investor Warren Buffett. In 2011, he famously pronounced that he paid only 17.4 percent of his taxable income in federal income taxes, a lower percentage than any of his 20 employees. He proposed that federal tax rates be raised for taxpayers making more than $1 million.


This is what will make the rich richer and the poor poorer... The PERCENTAGE that they can keep from their income after tax is different and hence there will always be a faster asset growth on the top end regardless of the AMOUNT they pay.

[Globally Challenged]

Every pilot employed on a business jet is part of some food chain involving some tax-heaven.
Some pilots work for dictators, some for oligarchs, some for shrewd businessmen, some for criminals, some for sportspeople, politicians. Some politicians are member of all those groups mentioned.
Some business jet pilots are employed by honest entrepreneurs. I guess it's the very small minority.
Panama-gate will take some of those folks down. We will hear from some of our pilot-colleagues that their airplane is grounded and for sale. Russian sanctions, war in Ukraine, economy in China, decline in oil price and the associated demise of bizav (in Turkey, as one example)...now Panama!
I would not throw stones at our bosses and the way they conduct their business.

While we may benefit from being paid by these people - that salary then re-enters the 'real' economy and is taxed in the normal way.

I sleep very soundly at night thanks.

[Delta12]

Perhaps VistaJet is just good at what it does? Ever considered that?

Paying peanuts to their workforce ? Guess they are good at it :D:ok:

[Avioactive]

The vast majority of the companies registered in the 'Panama Papers' are in the British Virgin Islands. BVI companies do not have an obligation to prepare of file financial accounts. However, records must be kept that are sufficient to show and explain the company's transactions; and will, at any time, enable the financial position of the company to be determined with reasonable accuracy. Such records do not have to be kept in the British Virgin Islands and the location for keeping such records can be freely determined by the owners of the company, and there is no requirement whatsoever to file or otherwise make public any commercial or financial records of the Company. Quite clearly then intended for hiding the affairs of the companies concerned, albeit legitimately under BVI rules

[fairflyer]

Just in Europe there are huge differences in corporation tax levies - Germany up to 33.3%, Belgium 34%, Italy 31.4%, Spain 28% whilst the likes of Ireland are at 12,5% along with Cyprus and Liechtenstein, Montenegro 9%, Bulgaria and Bosnia 10%, Switzerland 16.55% and Malta goes as low as 5% (where Vistajet are now lock, stock and barrel). The Swiss and Liechtenstein also have really low VAT at 8%. Anyone with any sense is going to play the tax game to protect their investments, businesses and minimise outgoings. The UK is proposing to go to 18% in 2020 so we recognise the issue and don't want to lose out to a great extent to our lower tax neighbours. Of course if we leave the EU, our economy could be so shaken up that corporation tax could be radically changed to compensate.

[sellbydate]

Of the reputed 619 UK-based fixed wing business (private) aircraft types, only 292, less than half, are on the British 'G' register. Of the rest of those parked up in the UK as their primary or nominal base, there are 132 on the Isle of Man register, 116 on the US 'N' register, six on the new Guernsey '2' register, one on the new 'ZJ' Jersey register, seven Bermudan, seven Cayman, one Maltese, two Luxembourg and the rest are general other European registers with the odd Nigerian or Saudi aircraft. Much of that is due to operational flexibility, but a lot is privacy and tax-related. Interesting though that the UK CAA only have oversight over the operation of less than half of the private aircraft actually based in the UK. Most of those non-G-registered aircraft of course are supposed to comply with the new Part-NCC regulations in August (safety compliance-related rules) so someone in the UK CAA needs the owner's phone and e-mail please - good luck!

[His dudeness]

ust in Europe there are huge differences in corporation tax levies - Germany up to 33.3%, Belgium 34%, Italy 31.4%, Spain 28% whilst the likes of Ireland are at 12,5% along with Cyprus and Liechtenstein, Montenegro 9%, Bulgaria and Bosnia 10%, Switzerland 16.55% and Malta goes as low as 5% (where Vistajet are now lock, stock and barrel). The Swiss and Liechtenstein also have really low VAT at 8%.

And that is why the EU needs to go bust....what we need is a new EU that has the same taxations, labour law, social laws.
I remember when my first employer in aviation relocated his business (650 employees) to Ireland - they gave him 3 years free of ANY taxes and the right to pollute - for which he paid 18 Mio D-Mark annually at the origin of the business. After more than 150 years in Germany the company does now produce its stuff in Ireland. Funny enough, after a few years they had to import Chinese laborers, cause the Irish did not like working for relatively low wages...

This world is simply perverted. And its the rich people that are to blame, mostly.

[fairflyer]

Would be good to start a little table I think of Sunday Times Rich List entries and their associated aircraft, anyone care to start?

[Jetscream 32]

Jeopardising jobs of fellow brethren is not the greatest way to win support I'd have thought!

[Chronus]

A few clicks on the www reveals on 1/1/2016, there were 21432 pvte jets in the world wide fleet. Multiply that number with a million or so each, you gets to some big numbers. Add to that all the manufacturers who make those machines and the numbers they employ and there you have a very serious issue.
What became of Julian Assange and his Wiki Leaks. Not much. So it will with the Panama Papers.
Am sure those guys driving the big yachts are not losing any sleep over their jobs and without the jets, how would any body get to the yacht.

[Booglebox]

Jets, yachts, fast cars, big houses, young women... It's all the same business, really :}

[Chronus]

Jets, yachts, fast cars, big houses, young women... It's all the same business, really :}
Let us not forget their much loved adorable cuddly little pooches and their aromas that fills the whole cabin.

[Booglebox]

I know what you mean... back at the start of my illustrious career in aviation, it was once my unfortunate duty to clean a bunch of spilled dog food and other canine by-products from the interior of a Citation Ultra on a hot summer's day. :sad: