By: Willem Oberholzer
Tax structuring and planning – words that can turn a room full of people into a symphony of blank stares and polite nods. But make no mistake, this is no amateur sport; it’s a high-stakes game where the winners stay out of jail, and the losers make donations to their local tax authorities.
Think of tax structuring like brain surgery – theoretically doable, but only by professionals qualified to do so. Let’s dive into what makes this field so "special," why dabble in it, and placing reliance on people without at least 20,000 hours of experience and required degrees (yes plural) will most likely be detrimental to your health and your wallet.
Imagine a novel where every plot twist contradicts the last one. Now multiply that by ten thousand pages and throw in words like "deductibility" and "carry-forward losses." That’s the tax code. If you’re feeling confident about understanding it, it’s probably because you haven’t tried it yet.
In today’s global economy, your little tax move in one country might set off alarm bells in three others. It’s a bit like juggling – except the balls are flaming swords, and each one is subject to different laws and penalties.
Then, you need Strategic Finance Mastery. This isn’t just about following the rules. It’s about artfully weaving your finances into a tapestry where every thread sings, "I paid the minimum required and not a cent more!" But, you know, legally.
Ethics, or "tax avoidance isn't a crime, right?" is a balancing act – playing the game without falling into the moral abyss. That line between tax planning and tax evasion is not only thin; it’s constantly moving.
So, what skills are needed to survive tax structuring without losing your sanity (or your freedom) you may well ask.
To call yourself a tax structure, you need a magical blend of skills. Picture a Swiss army knife that contains not only blades but also a lawyer, an accountant, a macroeconomist, and someone who reads international tax treaties for fun.
You need to know tax laws like the back of your hand. In fact, if you’re reading this, stop and study them again – they’ve probably changed by now. It’s one thing to add up expenses; it’s another to artfully position them so they look perfectly legitimate to the taxman. You can’t just “accidentally” expense your yacht as a work requirement.
Knowing how capital flows, what a REIT is, and why dividends are your new best friend are essentials in this magical tax toolbox. Then, besides understanding and knowing how much coffee the coffee beans will make in four countries, you need an internal radar that starts screaming when things get a little too "creative." This is something that only comes with experience. Unfortunately, experience cannot be bought or taught; it comes with time in the saddle and riding hard.
That leaves us with the last question: what can possibly go wrong? What happens when the wrong person handles your tax structuring? Spoiler alert: nothing good.
Financial Donations to the Tax Authority in fines, penalties, and back taxes are a given. To add insult to injury, the tax authorities have a wonderful selection of fines and, for the really "creative" among us, a spot in court. Ever heard of tax evasion? It comes with perks like handcuffs.
If you’re feeling lonely, a good scandal about “tax irregularities” should have the press on your doorstep in no time.
Some small thing called stress. Well, in the event of an audit, don’t worry; your business will (could) continue if you can focus on answering the 3,000 questions the auditors are politely shouting at you, and you have an unlimited supply of Urbanol and Red wine…
Qualified tax professionals know where all the tax-saving Easter eggs are hidden. Without them, you’re probably leaving cash on the table – or worse, paying extra for the privilege of ignorance.
Make one wrong move, and the tax authorities will, in their own way, ensure that you get the message, "Let’s never lose touch."
Tax structuring and planning aren’t just “skills” you can pick up on a weekend or over a year. They’re the backbone of sound financial health and require expertise spanning multiple disciplines. And if you’re tempted to leave it to your “friend” who once did a short course on how to be a tax technician, remember: it’s all fun and games until the tax authorities come calling.
* Oberholzer is a director at Kisch Tax Advisory Services.
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