Quote:
Originally Posted by Herrmann
In itīs next printed edition Der Spiegel also reports that due to the last sentences of one of our highest courts (Bundesgerichtshof, BGH) the usual penalty for tax evasion of more than one million Euros is jail without parole. So, if Fabian is found guilty, he might face several years behind bars, Spiegel says. According to unnamed sources within the investigators there is the suspicion of taxes in excess of 10 million Euros having been evaded. Several terabytes of "evidence" - I guess itīs a lot of movies as well ;) - were confiscated in the raids.
Mind you that this story of Spiegel is not on their website yet, itīs a heads up of an upcoming report I just got from a friend.
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Now the article is online, it says what your friend "predicted":
http://www.spiegel.de/panorama/justi...-a-874174.html
It mentions a 19% German VAT TAX too.
Let me write a wikipedic opinion on Manwin's VAT, pardon me.
In Cyprus VAT it is 17% now, but it was 15% until March 1, 2012. Let european customers be billed from Cyprus instead of Germany, for all the years before of March 1, 2012: that's a 4% discount until, and 2% later. The main point it is, was it legit to use Cyprus or not? For the moment, only the newspaper decided it, not the tax guys yet, even they suspect it as jail order shows.
The VAT it is to be paid on all sales to european customers, no matter you are in loss. So even if TAX people agree you had zero profits, the VAT it is "value added" to price of all the sales (only made to european citizens). So you get $119 from customers, as German company you must pay $19 tax within a month, each month for all sales, no matter profit or loss yet. instead as Cyprus company, every $115 you pay $15 vat. Over $100 final price, the German 19% vat it is $15.96 ($84.04 for company + $15.96 vat as 19% of pre-tax price), while the Cyprus 15% vat of $100 final price it is $13.04 ($86.96 for company + $13.04 tax as 15% of $86.96).
Let the TAX guys decide that Cyprus it was unapplicable and had to be German VAT applied (again, despite newspaper articles implies it, no final judgement on this has sentenced yet). This automatically would mean mean 4% of vat tax evasion for all sales done for all past years, no matter profit or loss to be verified or even looked at. Limited to MyDirtyHobby, I read in newspaper it may have sold for 2 million euro a month, this is 24m a year, so 50m or 70m for past few years examined.
To make it easy, let consider 100m sales all in loss, no profit taxable. Cyprus VAT would be 13 million to pay, while as German VAT would be 16 million, so 3 million of tax evasion "only". So the 10 million of tax evasion claimed can't be exclusively the VAT for MyDirtyHobby. It should include other sites and/or the income. It was mentioned that Trafficjunky used Cyprus, and I suppose Brazzers/Jugg sales does same for european sales. But these are really run from a Canadian (non-european) company, office and employees, unlike MyDirtyhobby being apparently run from Hamburg office.
For true and pure USA, Canada, Australia ompanies, owned by non-EU citizens or companies, it is 100% surely legit to choice the country where to set a subsidiary to have an Euro VAT number, and Cyprus it is obvious and accepted choice. there is no any law that madating a Canadian citizen/company to choice Germany over Cyprus or France as domicile for european VAT subsidiary, this should be underlined, and made clear.
The new owner (managing partner) is a German citizen, so this may be questionable, but he purchase a real Canadian company who was really owned and run by canadians in Canada, and such it was kept operating "as is". This could be legit, I am unsure there's a German law saying if a German buys a Canada company with a legit Cyprus subsidiary for Euro VAT (I repeat, it is legit for non-eu companies), then he is forced to change Canada company subsidiary to Germany.
In short, limited to VAT issue (not in income/loss issue), I think defense for MyDirtyhobby against TAX it will be hard to be win, if tax proves it was setup and run from Hamburg (Germany)... there a Cyprus VAT it looks wrong. But (limited to VAT), a defense of what it was setup and operated from outside Germany or Europe (for real, and even before Fabian owned it), so Manwin Canada, Brazzers, Tubes and such, could be easily legit with Cyprus there, before and in future, even if no one operation of Manwin it was run from Cyprus. I repeat it is legit for fully Non-European companies to have an empty office in Cyprus (or in any other EU country of choice) for just pay a VAT on euro sales.
This opinion of mine it is limited to VAT; of course if there's profits hidden in some way, this is another matter: tax on profit. But profits have to be found and assigned per subsidiary, and those are lost way of Cyprus->Delaware if any, especially mixed with Canada ones. But are we sure income was hidden yet? 362 million injected from Delaware->Cyprus as a loan, let me think, there is no real income to "hide" yet... the claimed 100 million pre-tax a year, it is still less than the loan injected. So all balanced, what income to hide? More likely to hide investments injection = expenses = temporary loss by the 100's investors who purchased the porn fund loan credit, via dozen of wall street institutions.
With the risk of being assaulted and hated on GFY, I wish Fabian & Family Merry Christmass, even I am atheist, let's call it a seasonal greeting. I wish merry x-mas to Die Welt, Der Spiegel and the Tax Prosecutors too, of course. and to Mike South
