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Old 06-01-2012, 02:55 AM   #1
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Dodging Tax on Vehicle Transactions Might Change??

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British Columbians "give" thousands of cars to "friends" in tax dodge

You like the looks of this fancy Porsche 911 I am driving, which has a book value of $80,400?

You find the 400-watt stereo, the all-leather interior and the 18-way power seat adjustments appealing?

You’re quite correct. As the young people say, it is one dope ride.

And if I can make a friend happy, then I must do so.

I give it to you. It’s yours. Drive it away.

The above scenario plays out every day in front of the officials who handle the process of transferring vehicle ownership.

Judging by the paper trail, British Columbians are among the most generous, altruistic people on earth. A remarkable number are seized with the urge to give their cars away to “friends.”

It would give most people a nice warm feeling, to know they live in a province where magnanimous gestures like this occur every day.

But not the tax collectors. Those cold-hearted skeptics reject the notion that B.C. is a place where people donate their cars out of the goodness of their hearts.

It must be awful to be a tax collector. Always looking the gift Mustang in the mouth.

But of course, sad to say, they’re dead right.

It’s a scam that costs taxpayers an estimated $17 million last year. Since the bogus gifting requires the connivance of both parties, enforcement is difficult.

But the wide-open loophole will soon be eliminated when the new-old provincial sales tax returns.

The loophole is simply that if you designate the private transfer of a vehicle as a “gift,” you avoid paying taxes. The use of that dodge has become rampant.

Finance Minister Kevin Falcon said the new version of the PST currently before the legislature will allow for a regulation that will close the loophole.

“This is to deal with a very substantial problem associated with people that, to avoid paying tax, were claiming that an item was provided as a gift rather than purchased.”

He said last year there were “hundreds of high-end late model vehicles, including BMWs, Porsches and Mercedes, that were reported as so-called gifts from so-called friends.”

Almost one-third (161,000) of the 503,000 private vehicle transactions last year were reported as gifts instead of sales. And an estimated 60,000 of those were between unrelated individuals. The recipient is listed on the form as “friend.” Sometimes: “Best friend.”

Falcon said sardonically: “Happily, though it hasn’t happened to me yet, there are individuals that are gifting high-end Porsches, Mercedes and BMWs to people that they are unrelated to, out of the goodness of their heart.”

Government tax bulletins have been plaintively warning about this fraud for a while. But the urgency has been stepped up. A background note from the finance ministry says curtly: “This type of tax avoidance is nothing more than theft from British Columbians and it ends now.”

It’s striking how many of them are late-model high-end “gifts.”

The ministry said there are more than 300 instances last year where BMWs were gifted to friends. One of them was worth $70,000.

More than 200 late-model Mercedes were given away, including one worth $60,000. One of them didn’t even go to a friend. The recipient was listed as an “acquaintance.”

Thirty Porsches were gifted, including the $80,400 one described above.

But it will all soon come to an end. There will be provision for real gifts, where cars are donated to charity or given to family members, as long as the donor has paid the original sales tax.

There’ll be more rules to follow when you give a car to a friend. Under one proposal, the friend will be required to pay tax when the gift car is registered.

The exact tax being avoided is the 12 per cent Tax on Designated Property, created in 2010 during the HST changeover. It was invented to even the field between private vehicles sellers and dealerships.

People were dodging the seven per cent PST previously. When the 12 per cent Tax on Designated Property came in, the scam accelerated.

“Give until it hurts,” they say. The explosion of selfless generosity is expected to end soon. Then the hurt resumes.
Source: British Columbians "give" thousands of cars to "friends" in tax dodge
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Old 06-01-2012, 03:01 AM   #2
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The entire article is satire and sarcastic, I like it.
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Old 06-01-2012, 03:02 AM   #3
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Old 06-01-2012, 08:08 AM   #4
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Almost as much of a scam as paying tax on a car every time its sold. Its not like the people selling privately are making money off it.
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Old 06-01-2012, 08:15 AM   #5
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i'll be honest i've done it before but only on the shitboxes i used to drive.. they were only like $500-1000 though. i never thought people would have dared to do it with higher end cars too, i mean i would have thought you would DEFINITELY get caught since it's pretty obvious nobody would gift a 70k car to a friend. $500-1000, much more likely.
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Old 06-01-2012, 08:35 AM   #6
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So two wrongs make a right?

Taxes on a USED VEHICLE SALE is as much of a "theft" to British Columbians.
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Old 06-01-2012, 08:36 AM   #7
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lets say I gift you a 1000 dollar car, then next year you gift it back to me, then we keep handing it over back and forth, everytime we hand it over it generates money for the government,

how is that not fuckin retarded? Its my choice to give something to someone.
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Old 06-01-2012, 08:38 AM   #8
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Paying tax on used vehicles is bullshit anyways. If you sell anything small privately no tax is charged. You are a private person, not a business entity.
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Old 06-01-2012, 08:40 AM   #9
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It is indeed a scam by the government to keep taxing vehicles that have already had the tax paid on initial sale. I wouldn't go to the extreme to gift a vehicle to someone, but am I the only one who thinks we pay enough taxes here in BC?

Look at the gastax. We're paying roughly 50 cents on the litre for various taxes.
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Old 06-01-2012, 10:18 AM   #10
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Just curious, let's say if I loose a bet to my friend or lost a car to someone while gambling like playing poker or something and no physical exchange of money was involved (no paper trail such as bank draft or transfer). Does that still count as 'selling'? Would the person still need to pay taxes on the vehicle?
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Old 06-01-2012, 10:48 AM   #11
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a scam that costs taxpayers an estimated $17 million last year


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“This type of tax avoidance is nothing more than theft from British Columbians and it ends now.”
did they confuse regular bc citizens with those working in the govt?

Quote:
as long as the donor has paid the original sales tax.
^^^given that than there should be no tax on sales of used goods... since the seller paid the original sales tax...


I've only ever transferred 1 vehicle to someone but he's a relative and i really did give it to him but i don't see why it should be any different if the person receiving the vehicle is family or not
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Old 06-01-2012, 11:04 AM   #12
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This is my favourite quote:

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The exact tax being avoided is the 12 per cent Tax on Designated Property, created in 2010 during the HST changeover. It was invented to even the field between private vehicles sellers and dealerships.
You INVENTED a tax to "even the playing field" for dealerships? And now you're mad that people don't want to pay it?? SOUND LOGIC IS SOUND
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Old 06-01-2012, 12:40 PM   #13
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Yeah, I want to hear an official explanation of why they think it's okay to collect tax on the sale of the same vehicle over and over again.

Person A buys new vehicle from dealership for $50000. Pays $6000 tax.
Person B buys that vehicle from Person A for $40000. Pays $4800 tax.
Person C buys that vehicle from Person B for $30000. Pays $3600 tax.
Person D buys that vehicle from Person C for $20000. Pays $2400 tax.
Person E buys that vehicle from Person D for $10000. Pays $1200 tax.

The government has now collected $18000 of tax from this one vehicle that originally cost $50000. WTF.
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Old 06-01-2012, 12:45 PM   #14
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what they should do is have a record of how much you purchased the vehicle for and if you sell it for more than that used it should be taxed since it is income. if you sell if for less than that, it should not be taxed.


but the 'gifting' epidemic is horse shit and truely is a scam that should be figured out.
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Old 06-01-2012, 01:09 PM   #15
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Definitely agree that that is a cash grab to tax a car over and over everytime it is sold. Total BS.

It's interesting that they focus on gifting. The government has no idea how much tax revenue is lost when people declare the sale price as lower than the actual sale price.

I would wager that those that don't gift, will often lower the sale price to reduce the tax.
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Old 06-01-2012, 01:41 PM   #16
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What is stopping someone who wants to purchase an 80k setup a business with an HST# , and purchasing the car under the business? And claiming the paid HST? Then dissolve the business after 1yr. Extra work - but still better than paying 9600.

off topic: does anyone know how the "Property transfer tax" work when one is selling a house? Is it similar to this?
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Old 06-01-2012, 01:58 PM   #17
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Well that's pretty lame, the first car I ever bought was for $1,000 and I got it gifted to me because I was told it's what I should do lol.
Taxing a car every single time it's sold, that's just lame. Or gifted or whatever.
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Old 06-01-2012, 02:00 PM   #18
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Fucking government.

Tax is just stupid here. If I buy something for the shop they charge 12%, then I resell it I charge 12%. The people I bought from got charged 12% etc etc.

A $100 item probably made the gov't $25+. Retarded. Let alone they taxed our income that bought the $100 item.

Seriously.
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Old 06-01-2012, 02:20 PM   #19
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last time i checked, giving someone a car is not illegal, so they are pretty much inventing a crime

used buy and sell tax evasion? oh please, what a scam, they're better off asking "cash only" resturants why they don't take debit/credit card
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Old 06-01-2012, 02:21 PM   #20
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what a crock, just another cash grab. Not like we're not getting taxed enough
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Old 06-01-2012, 02:47 PM   #21
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Old 06-01-2012, 02:59 PM   #22
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ya this is a stupid rule....

say u sell a 10,000 car ... get taxed 12%
no tax credit because it is private property for personal use ....



ok .... i make a lot of friends ... and i like to give them cars
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Old 06-01-2012, 03:27 PM   #23
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shit, how many other things are double taxed? houses?
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Old 06-01-2012, 03:33 PM   #24
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shit, how many other things are double taxed? houses?
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Old 06-01-2012, 03:52 PM   #25
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shit, how many other things are double taxed? houses?
The big one a lot of people don't know about is buying fuel. There is tax on top of tax on top of tax a lot of times. The goverement screw's us so much and a lot of people don't even know about it.

To me it sounds like the people in BC are smart by gifting vehicles since it is a legal loophole. They are trying to close it which will make things tougher but we will find another way to get away from the goverment fucking us.
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