The List

The World's Strangest Tax Laws

As April looms and the tax man cometh, everyone's looking for an exemption. But some taxes and exemptions are more defensible than others.

Mooncake Tax

Country: China

Who's affected: Chinese pastry-lovers

The bottom line: In the midst of last year's economic downturn, Chinese authorities upped their tax-collection efforts (which are usually notoriously lax) in a bid to top up the state's coffers. One of their main targets was the mooncake -- a pastry stuffed with lotus seed paste and egg yolks, or "whatever the baker feels like chucking in," that is a ubiquitous delicacy especially popular in the fall.

Mooncakes were traditionally given out during the Mid-Autumn Festival (historically a time of moon worship) to friends and family to cement relationships. But now, many businesses also offer mooncakes to employees or provide coupon vouchers redeemable at local groceries for the treat. Additionally, the cakes are given as a sort of soft bribe to employers, party officials. Where bakers saw a mooncake explosion, government officials saw yuan signs -- and launched an inspection of more than 3,100 companies last year, slapping 30 billion yuan worth of back taxes on gifted mooncakes and coupons. In modern China, apparently, you can have your cake and tax it too.

Webcam Stripper Tax

Country: Sweden

Who's affected: Online pornographers

The bottom line: The Swedish tax authority has apparently never heard of the phrase "not safe for work." Last year, the Skatteverket began cracking down on hundreds of online webcam strippers who had neglected to pay income taxes on money received for their services. Dag Hardyson, head of the investigation, told the BBC that initially the agency had difficulty identifying some of the strippers and that automated software failed to adequately target the culprits, but, "When we investigated the sites manually, it worked better."

The Skatteverket estimates the lost revenue to be north of 40 million Swedish kronor ($5.56 million). Hardyson's explanation probably raises more questions than it answers: "They are young girls, we can see from the photos. We think that perhaps they are not well informed about the rules." Creepy.

Artistic Exemption

Country: Ireland

Who's affected: Authors, playwrights, other writers, composers, painters, photographers, sculptors.

The bottom line: Starving artists may be a popular romantic image, but they're generally not given protected legal status, except in Ireland. A clause in the Irish tax code makes income derived from the sale of art (including books and other writings, plays, musical compositions, paintings or photos, and sculptures) exempt from taxation. Introduced in 1969 by then-Finance Minister Charles Haughey, the provision was created with the stated purpose of helping would-be Joyces and Becketts who've fallen on hard times.

After charges that not exactly down-at-the-heels groups like rock supergroup U2 were paying no taxes on income of millions of euros, the rule was modified in 2006, allowing only for 250,000 euros of income to fit under the exemption (Bono and Co. subsequently moved their official base of operations to the Netherlands). Last year, a report from Ireland's Commission on Taxation labeled the exemption unfair, but attempts to repeal the rule were stopped. So Ireland's penniless poets appear to be safe for now.

World Cup Tax Exemption

Countries: World cup hosts

Who's affected: South African residents, nonresidents

The bottom line: South Africa is understandably thrilled to be hosting the 2010 World Cup, which opens June 11. A financial boost is expected as infrastructure improvements reach a massive scale and thousands of foreign tourists travel to the country to support their favorite teams. But because of agreements that FIFA, the world's governing body for professional soccer, requires of all World Cup host countries, the boon to the state's bottom line will be minimal.

Before accepting any country's host bid, FIFA demands significant tax concessions. For its part, South Africa agreed to create a "tax bubble" around stadiums and other official World Cup sites, making any income earned off goods sold within them exempt from taxation. (Athletes, however, are not exempt from taxation. The South African national team, in particular, gets the shaft: They'll still pay normal income-tax rates, despite being participants.) Although FIFA promotes soccer as a way to bridge global divisions, the organization clearly isn't afraid to throw its weight around for its own benefit.

Presto ... Tax Breaks!

Country: The Netherlands

Who's affected: Witches and wizards

The bottom line: Hogwarts it may not be, but a school in the Netherlands provides tax-deductible course work on witchcraft. Margarita Rongen, the headmistress of Heksehoeve (Dutch for "witch farmhouse"), offers a yearlong curriculum in spell-casting, herbology, potions, and divination, among other classes. The class clearly has a large following: Rongen has received applications from as far away as Dubai.

In a case brought before Dutch tax authorities in 2005 by pupil Maaike Buurman, it was ruled that because the course was used "to extend her professional knowledge" -- as a tax official put it to Reuters -- it was eligible for a tax write-off. Buurman argued she enrolled in the school to help her in teaching the history of the Middle Ages -- but of course, a witch would say that.

MIKE CLARKE/AFP/Getty Images, BAY ISMOYO/AFP/Getty Images, SIMON MAINA/AFP/Getty Images, 2010 FIFA World Cup Organising Committee South Africa via Getty Images, LIVER LANG/AFP/Getty Images

The List

The Catholic Church’s Latest Abuse Scandals

FP's guide to the Vatican's spiraling crisis.

A series of explosive child sex abuse scandals has hit Western Europe in recent months, sending the Catholic Church into damage-control mode. While such scandals have become depressingly frequent since major allegations came out in the United States in 2002, the latest charges have been particularly damaging, implicating senior members of the Vatican hierarchy, including Pope Benedict XVI himself, and coming at a time when the church is already losing popularity on its home turf.


The scandal: Serious accusations have rocked the Irish church since the U.S. scandal broke. But it was not until the middle of last year -- when a government report detailing Irish clergy child abuse was released -- that the extent of the problem was entirely clear. The report alleged 2,000 cases of abuse over a 60-year period. A second government investigation, released by the Irish government in November 2009, fanned the flames by revealing the collusion of Irish police in systematically covering up cases of child abuse by Dublin clergymen. For Ireland, this is only the latest part of the clergy abuse saga -- the Associated Press reports that since the mid-1990s there have been nearly 15,000 complaints leveled against the church -- with legal claims topping $1.5 billion.

The church's response: The archbishop of Dublin responded swiftly to the latest report, saying on Nov. 26, "No words of apology will ever be sufficient," and "The report highlights devastating failings of the past." The Irish police commissioner also expressed his regret in the police force's role. The Vatican, however, was less effective. In September 2009, a Vatican official responded to growing criticism by defending the clergy's action, citing statistics that showed only 1.5 to 5 percent of clergy have been involved in cases of child sex abuse -- a leaky argument that acknowledges sexual abuse by up to 20,000 priests worldwide.

This February, the pope finally personally addressed the issue by summoning 24 Irish bishops to the Vatican to discuss the by-then highly publicized scandal. He also vowed to pen a "clear and decisive" letter addressed to Irish Catholic constituents that would outline definitive steps the church would take to protect children from further abuse. Four bishops have resigned in the reports' wake, but others have complained of unfair treatment by the Irish press, pointing out that journalists have focused on the church even though problems of abuse are societywide.


The scandal: In late February, a Dutch radio station and newspaper broke the story of alleged abuse in Dutch Catholic boarding schools in the 1960s and 70s. The last Catholic boarding school may have closed in 1981, but victims have not forgotten their traumatic experiences. Once again, the trickle of a few lone voices surged into a torrent -- nearly 200 allegations surfaced in the weeks following the radio program. Victims told stories of priests who shamed them into thinking they had done something wrong, which accounted for their silence. Even when accusations were leveled, priests tended to brush off evidence.

The church's response: The Dutch church was quick to offer an apology to victims of abuse and on March 9 ordered an investigation into any claims. The Vatican, perhaps learning from its PR mistakes in the case of Ireland, highlighted the timely Dutch response as a demonstration of the church's transparency in dealing with child abuse. The Vatican also credited church officials for speeding up the process by encouraging victims to step forward. Critics have shot back, saying such investigations are "a typical Vatican coverup" and that the church has done little to systematically deal with the problem.


The scandal: In early March, the head of a Benedictine monastery in Salzburg confessed to sexually abusing a child more than 40 years ago, before he was ordained. His offer to resign was immediately accepted. A few days later it was reported that another priest in southeast Austria was suspected of having abused approximately 20 children in his parish. Anonymous accusations of abuse at a boarding school at Mehrerau Abbey have also been confirmed and allegations of abuse within the world-famous Vienna Boys' Choir have also surfaced.

The church's response: On March 11, two Austrian archbishops made international headlines when they separately questioned, in a Catholic magazine and during a television interview, whether the church's tradition of celibacy had increased the likelihood of abuse. They stopped short of blaming celibacy for the Roman Catholic Church's growing record of abuse, saying that if celibacy were the principal cause, pedophilia would not exist elsewhere in society. The next day, the Vatican shot down a discussion of celibacy when the pope stated that the tradition would not fall to "passing cultural fashions."


The scandal: The latest and most salient crisis is now taking place in Germany, where allegations of abuse have surfaced this year for the first time. At least 300 cases of abuse have emerged, and elite Jesuit boarding schools across the country have been accused of mistreating pupils. Eighteen of the 27 German archdioceses are now being investigated for child abuse while the German Justice Ministry says that Vatican secrecy has hampered investigations for the past decade.

Such explosive accusations are a direct attack on Pope Benedict himself, who has been criticized for sending a confidential letter in 2001 to every Roman Catholic bishop, advising them to keep allegations of sexual abuse secret for at least 10 years. The letter went on to say that investigations into abuses would be done internally. The German cases have been particularly dangerous for the pope, who was the bishop of Munich from 1977 to 1981. Already he has been accused of allowing a priest who was a known molester to continue serving. Even the pope's older brother, Father Georg Ratzinger, has been accused of allowing abuses to occur at a school choir he directed from 1964 to 1994.

The church's response: Germany's church leader has apologized for the abuses and stated that the church would institute tough new measures. The archdiocese of Munich moved quickly to defend the pope against the personal accusations, with the second-highest ranked official during Benedict's tenure there claiming full responsibility. Meanwhile, the Vatican has responded defensively, denying the so-called "wall of silence," and accusing the international press of an aggressive campaign to smear the pope -- a tactic that will not play out well with an already-boiling European public that has been looking for him to personally speak out.