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Insurer deducted €83,000-orgy from taxes

The Local · 30 May 2011, 14:28

Published: 30 May 2011 14:28 GMT+02:00

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Die Welt newspaper reported on Sunday that the Hamburg-Mannheimer insurance firm considered the hefty sum fully tax deductible.

Ergo, the insurer's parent company, told the paper the orgy had been considered a “normal event” for which the costs were marked as regular operating expenses.

“The bill has been treated entirely as a business expense,” said an Ergo spokesman.

“According to our assessment, this was in full accordance with tax law," he added. "But we continue to explore the possibility of a different conclusion, and how we can rectify the matter.”

Earlier this month, revelations surfaced that Hamburg-Mannheimer had sponsored a 2007 sex party for its top 100 employees at the historic Gellert thermal baths in Budapest, for which twenty prostitutes were in attendance.

Participants told the German media that the most attractive women were marked with white ribbons and reserved for the company’s board members and top sales people.

According to Die Welt, it is common for German company executives to charge brothel visits as a business expense, and there are many ways to prevent details appearing on the bill.

Some prostitutes are paid as multilingual hostesses, according to tax inspectors, while hotels in some countries simply include sex services in the cost of a room.

“Look at the official prices in hotels, and compare them to what you actually pay," said an inspector at a regional tax office, speaking on the condition of anonymity.

"There is plenty of room for ‘special services’ to be included in the cost of a room. We have way chance to prove this."

Receipts from the orgy in Budapest make no reference to specific services, the Ergo spokesman said.

“According to our records, there is no detailed evidence for the services of 20 prostitutes,” he told the paper.

The burden on the German taxpayer for the sex party in Budapest was lessened only slightly by the fact that each of the approximately 100 participants were forced to pay tax on €3,000 in benefits having cash value.

But in most cases, companies deduct most expenses on business trips, resulting in taxpayers footing the bill for their escapades.

Story continues below…

Tax deductions for prostitution is not clearly defined in Germany, according to Die Welt, though most tax experts conclude that brothel services are not a valid write-off. This means that if a client requests that an event agency exclude incriminating itemizations from invoice, it would qualify as tax fraud.

The sex party in Budapest was reportedly organized by the event agency EMEC, based in the Bavarian city of Türkheim. But an EMEC executive, Robert Ackerman, refused to take responsibility for the prostitutes.

“We had nothing to do with the prostitutes at the Gellert spa,“ Ackerman told Die Welt.

The Local/adn

The Local (news@thelocal.de)

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Your comments about this article

14:56 May 30, 2011 by William Thirteen
this story is the gift that keeps on giving!
17:15 May 30, 2011 by grimnortherner
in a country where bribing officials counts as tax deductible i am really not surprised by this at all
20:03 May 30, 2011 by MfromUSA
OK.........I just have to say this.

German men are such a bunch of F@#!$$#@ pigs!

And, corrupt enough to write this sh!t off as a tax exempt expense.

Come on over to where I live and see how easily you would do this.

To your wives I say...."dump the whole lot of worthless cheating arses!!!!"
22:42 May 30, 2011 by BobbyDigital
Bill Clinton
00:49 May 31, 2011 by UltraDeb
No big surprise from the country who gave us that German guy who ate that other German guy, and all that porn where people put on rubber suit and pee on each other through holes in the crotch. Anyway, I'd rather my taxes went towards an orgy than a bunch of work-shy freeloaders on Harz IV.
10:26 June 1, 2011 by moistvelvet
I think someone needs to chill out, their obvious disgust of prostitution is coming across as someone being bitter, twisted and possibly single with cats? Who are they to say "German men are such a bunch of F@#$$# pigs!", get a grip!

As for the story, I don't really care how it was paid for, it's old news, interesting at first but you just keep recycling it.
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