Top 10 famous tax cheats, continued

In my last column, I mentioned how governments are becoming desperate to collect taxes and are imposing severe sentences on those who evade taxes; the most frequent offence is simply failing to declare income. I had listed some of the most famous tax evaders of all time. Some more, this week, to complete my Top 10.

Most did not actively set out to evade taxes; they were just careless, misinformed, badly advised or all three. They assumed tax payment somewhere removed the obligation to declare and pay tax elsewhere. This was a big mistake. Get the proper advice. It may cost a bit but it will be a lot cheaper then getting it wrong.

Boris Becker

The tennis champion was fined Euro300,000 (HK$3.47 million) and sentenced to two years' probation for tax evasion. Becker admitted that from 1991 to 1993, he claimed to be living in Monte Carlo but was living at his sister's house in Munich. His lawyers claimed it was his advisers who filed the incorrect returns and pleaded for leniency. The court gave it to him. His legal residence in Monte Carlo did not prevent him from being resident elsewhere. It is possible to be tax resident in several places at the same time. Tax treaties or the kind attitude of tax authorities (that's not a joke) would normally give you a credit for tax paid in one place against tax due on the same income in another. But the income must be declared in both places. Becker didn't.

Luciano Pavarotti

One of the biggest tax evaders ever. In 1999 he was convicted of tax evasion and fined US$4.55 million and in 2000 paid 74 billion lire to the Italian government in fines and back taxes. In 2001, he was again accused of evading US$18 million in taxes. He had taken out legal residency in Monaco but spent up to 179 days a year in the US, avoiding becoming tax resident there by one day. The authorities claimed he had houses and business interests in Modena, sufficient to establish tax residency there. He was eventually exonerated on those charges.

Wesley Snipes