Who said accountants don’t have a sense of humour? No, they do, really. Chartered accountant GAIL FREEMAN devotes her latest column to sharing some fun facts about… tax, of course!

Australia’s financial year is from July 1 to June 30. The US financial year is a calendar year. The UK has a financial year that starts on April 6 and ends on April 5, which I’ve always found to be weird. 

Here’s the reason why: in 1753 the tax year was extended from March 24 to April 5 as Britain replaced the Julian calendar with the Gregorian calendar. 

When William Pitt the Younger introduced income tax in 1799, April 5 became the financial year end and still is.

Another British fun fact: during medieval times, knights could opt out of fighting in wars by paying a tax called scutage, affectionately known as the cowardice tax. It had a very high tax rate and some people claim that this rate resulted in the creation of the Magna Carta to limit the King’s power.

In 1795, again in the UK, the hair powder tax was introduced. This taxed the sweet-smelling powders that men and women put on their wigs. The story goes that this tax led to a dramatic decline in the popularity of wigs and put an end to Britain’s flourishing wig industry. 

I always thought that Australia’s tax laws contained a lot of words. Apparently the UK’s tax code has more than 10 million words and is claimed to be one of the longest and most complicated in the world. 

Are you a Beatles fan? Did you know that in 1966 The Beatles song Taxman was released as a protest against the 95 per cent super tax rate. To quote: “Let me tell you how it will be, there’s one for you 19 for me, ’cause I’m the taxman, yeah, I’m the taxman”.

Albert Einstein once said “the hardest thing to understand in the world is income tax”. While Benjamin Franklin said: “In this world nothing is certain, except death and taxes”.

If you’re an American citizen, even if you are a tax resident of another country, eg Australia, you still have to lodge a tax return in the US every year. Interestingly enough, the only other country in the world that does this is Eritrea in Africa.

I love this: fortune tellers, astrologers and witches were added to Romania’s labour code in 2011. So they have to pay income tax on their earnings. Some witches were angry and put curses on the government. There is no evidence that these curses actually worked. But others felt that it legitimised their work and they were happy to pay the tax.

From 1784 to 1811 the British government taxed hats. Based on the price of the hat, a stamp was secured inside it and anyone caught with a stampless hat was fined. One poor soul, a stamp forger, was sentenced to death for not having the correct stamp in his hat.

If you live in Monaco you pay no income tax at all. In Bulgaria you pay a flat tax rate of 10 per cent. In Russia the flat tax rate is 13 per cent. In Ukraine and the Czech Republic the rate is 15 per cent. Romania’s rate is 16 per cent. Not sure whether it’s because of the cold, but Iceland charges 23 per cent as their income tax rate.

Some countries have very high rates of tax. In Denmark the rate is 38 to 59 per cent of income, in Sweden it’s 0 to 57 per cent , in Norway 28 to 49 per cent, in the Netherlands 0 to 52 per cent, in Austria 21 to 50 per cent, in Belgium 15 to 50 per cent and in Australia 16 to 45 per cent, followed by Germany Italy Spain France and the UK. Americans only pay 10 to 35 per cent and Canadians 15 to 29 per cent.

If you want to know anything about tax – including more fun facts – contact the experts at Gail Freeman & Co Pty Ltd on 02 6295 2844, email info@gailfreeman.com.au or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.