21 Fun Facts To Lighten Up Tax Time

Here Are Some Fun Facts To Lighten Up Tax Time

1. The word “tax” came from the Latin word “taxo” which means “I estimate.”

2. Governments have been imposing taxes for thousands of years. There are recordings of tax payments made in ancient Mesopotamia circa 2500 B.C. At the time, people who didn’t have money to pay taxes often had to pay with livestock, food, or labor.

3. Even Albert Einstein found taxes inscrutable. He once said, “The hardest thing in the world to understand is the income tax” (that is, according Leo Mattersdorf, the math genius’ tax preparer).

4. Aside from the nation of Eritrea in Africa, the United States is the only country that requires citizens to pay taxes on their income if they work and live outside the country. Some wealthy individuals have renounced their citizenship and have moved to another country to avoid paying taxes.

5. Violent Chicago mobster Al Capone famously got caught on tax evasion charges. Other mobsters, including Al’s brother Ralph “Bottles” Capone, Frank Nitti, and Jake “Greasy Thumb” Guzik, were also charged. Among his debts to society, Al Capone had to pay $215,000 plus interest in back taxes.

6. Fortunetellers, astrologers, and witches were added to Romania’s labor code in 2011, meaning they have to pay income tax and contribute to the country’s social programs. Some witches cast curses on the government in response — although others felt it legitimized their work.

7. Ireland exempts up to 50,000 euros in profits from the sale of qualified artistic work from income taxes. Grants, awards, and prizes may also be tax exempt if they are related to the artist’s work.

8. Beards are back in vogue, but there were times when having a beard was costly. During the 16th century, King Henry VIII imposed a tax on beards that increased with the wearer’s social status. Eventually the tax was dropped, but his daughter, Queen Elizabeth I, reintroduced a beard tax on anyone with more than two weeks’ worth of growth. In Russia, Peter the Great wanted to Westernize the country and required every man, except peasants and clergy, to buy a “beard token” to prove they had paid up. The tax lasted from 1698 to 1772.

9. Talk about taxes’ ability to darken a day — in 1696, a window tax was introduced in England and Wales. It was assessed as a flat property tax plus a tax based on the number of windows a home had. As a result, some people bricked up their windows and new buildings sometimes were designed with fewer windows. Scotland and France imposed similar taxes in the 1700s.

10. In Roman times, urine and the ammonia within it were collected for uses such as tanning and laundering. Emperor Vespasian imposed a tax on the buyers of urine from public urinals. Today words for “urinal” in French, Italian, and Romanian are derived from the emperor’s name.

11. From 1784 to 1811, the British government taxed hats based on price. A stamp was pasted inside the hat, and anyone caught with a stamp-less hat had to pay a fine. At least one stamp forger was sentenced to the harshest penalty: death.

12. As Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.” Although he’s often credited with the idea, that line comes from a 1789 letter, and similar quotes date to 1716 and 1724.

13. Excise taxes are known as “sin taxes.” These are the taxes placed on tobacco, alcohol, and gambling.

14. Did you know, Maine has been taxing blueberries since 1882, and any Maine resident who grows, sells, handles, processes or buys blueberries pays a tax of three-quarters of a cent on every pound of blueberries grown, sold, handled, processed or bought! Since Maine produces 25% of all the blueberries in the US, the state make a pretty penny at tax time! Think about that the next time you enjoy a slice of blueberry pie.

15. It will cost you four leu to spend the night with your sweetheart at Alexandru Ioan Coza University in Rumania, even if you’re only burning the midnight oil and not burning with passion. With 1,800 students living on campus, the university is raking in a tidy sum of about 28,000 annually, which is roughly $8,745 US, 6,651 Euro or 5,985 British pounds. The money paid in tax goes toward repairs in the dorm buildings. Evidently, the sex tax receipts have become trophy items with the young men.

16. The Monagesques* pay no income tax at all – zip, zilch, nada! The world’s second smallest country (actually, it’s a city state), it has become something of a tax haven for the international high rollers. In Bulgaria, you’ll pay a flat income tax rate of 10%, regardless of how much you make, and Russia imposes a 13% flat tax, the Ukraine and the Czech Republic will take 15%, while Rumania assesses a 16% flat income tax rate and Iceland does too, for 23% of your income.

17. Taxes can be either direct or indirect. A direct tax is a tax paid directly to the government, such as income, Social Security, sales, property, and excise. An indirect tax is one that is passed on to another person or group. For example, the cost of fuel includes a tax that consumers pay. In other words, instead of oil companies paying that tax, they pass it on to consumers.

18. The most famous protest of taxation by the American colonies was the Boston Tea Party. On December 16, 1773, colonists dumped 342 chests of tea into the Boston Harbor to protest the Tea Act and other oppressive tax measures. They argued there should be no “taxation without representation.”

19. The first computers used by the ATO were used primarily for issuing the five million refund cheques sent out each year in the mid 1960s.

20. The Australian Federal Budget is prepared by the Treasurer and presented to parliament. After the Budget has been debated and approved by both Houses of Parliament, taxes are collected in

line with the Budget. The Parliament decides on the levels of tax – not the Australian Taxation Office (ATO).

21. In 2009, the following countries paid the highest taxes-the Danish income tax rate is 38-59% of total income. Ouch! Swedes pay 0-57%, followed by the Norwegians (28-49%), the Dutch (0-52%), Austrians (21-50%), Belgians (15-50%), Australians (17-45%), Germans (15-45%), Italians (23-43%), Spaniards (24-43%), the French (5-40%), and the Brits (0-40%). If you’re an American or a Canadian, you should feel better about income tax rates of 10-35% and 15-29% respectively!

10 Facts About The Tax System, Facts About Australian Tax, Facts About Tax, Facts About Tax Australia, Facts About Tax Day, Facts About Tax Season, Facts About The Tax System, Fun Facts About Tax Accountants

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Division 7A Explained: What Business Owners Need to Know

By Blue Orchid Accounting • August 20, 2026

Taking money or other benefits from a private company is not always as simple as making a withdrawal. Under Australia’s Division 7A tax rules, certain payments, loans and forgiven debts can be treated as taxable dividends. Here is a practical overview of how Division 7A works and how private business groups can manage the risk. What is Division 7A? Division 7A is designed to prevent shareholders and their associates from accessing private company profits without paying the appropriate tax. It applies mainly where a private company provides a financial benefit to: A shareholder; or An associate of a shareholder, such as a spouse, relative, family trust or related entity. If Division 7A applies, the benefit may be treated as an unfranked dividend. This means the recipient may need to include the amount in their assessable income without receiving a franking credit. What transactions can trigger Division 7A? Division 7A can apply to more than straightforward cash withdrawals. Common risk areas include: Payments A payment may include: Paying a shareholder’s private expenses; Paying personal credit-card balances; Transferring company property below market value; Paying school fees or mortgage expenses; or Providing company assets for private use. Recording a payment as a “shareholder drawing” does not prevent Division 7A from applying. Loans and advances Division 7A may apply where a private company lends money to a shareholder or associate and the amount is not repaid before the company’s lodgment day. The lodgment day is generally the earlier of: The due date for the company’s tax return; and The date the return is actually lodged. This means lodging the company return early may bring forward the deadline for addressing the loan. Forgiven debts Division 7A may also apply where the company forgives a debt owed by a shareholder or associate. A formal debt release is not always required. Risk can arise where the company writes off the amount or acts in a way that suggests it does not intend to collect the debt. How can a company loan avoid becoming a deemed dividend? A shareholder loan can generally avoid an immediate Division 7A dividend if it is placed under a complying written loan agreement before the company’s lodgment day. A complying loan ordinarily requires: A written and legally effective agreement; Interest charged at no less than the annual Division 7A benchmark rate; A maximum term of seven years for an unsecured loan; or A term of up to 25 years for a qualifying loan secured by a registered mortgage over real property. The ATO’s benchmark interest rate for the 2026–27 income year is 8.77%. Because the benchmark rate changes annually, businesses should update their loan calculations each year. Minimum yearly repayments Once a complying Division 7A loan is established, the borrower must generally make a minimum yearly repayment from the following income year. The repayment is calculated using: The opening loan balance; The benchmark interest rate; and The remaining term of the loan. If the borrower pays less than the required amount by 30 June, the shortfall may be treated as an unfranked dividend. Businesses should also avoid temporary or circular repayments. For example, a shareholder should not repay a company loan immediately before 30 June and then borrow the money back shortly afterwards. Division 7A contains rules that may disregard these repayments. What is distributable surplus? A Division 7A dividend is generally limited to the company’s distributable surplus. Distributable surplus is calculated using a statutory formula based broadly on the company’s net assets, subject to specific adjustments. It is not necessarily the same as: Accounting profit; Retained earnings; Cash held by the company; or The balance of the company’s franking account. Market values and the legal character of assets and liabilities may affect the calculation. For this reason, businesses should prepare a documented distributable-surplus calculation rather than relying only on the balance sheet. Division 7A and family trusts Division 7A can also affect trust structures. A common arrangement occurs where a trust distributes income to a private company but does not immediately pay the amount. This is commonly referred to as an unpaid present entitlement, or UPE. In June 2026, the High Court delivered its decision in Commissioner of Taxation v Bendel. The Court found that the UPEs in that particular case were not loans made by the corporate beneficiary to the trustee for the purposes of section 109D. However, Bendel does not mean that all UPEs are automatically outside Division 7A. The trust deed, distribution resolutions and subsequent use of the funds remain important. Separate Division 7A provisions may apply if the trust provides payments, loans or other benefits to the company’s shareholders or their associates. Private groups with corporate beneficiaries should therefore review existing UPE arrangements in light of Bendel and the ATO’s updated position. Can a Division 7A mistake be corrected? The Commissioner has discretion under section 109RB to disregard a deemed dividend, or allow it to be franked, where the Division 7A outcome arose from an honest mistake or inadvertent omission. Relief is not automatic. The ATO may consider: How the mistake occurred; Whether reasonable care was taken; The taxpayer’s compliance history; and Whether appropriate corrective action was completed. Corrective action may involve repayments, interest, amended accounts, loan documentation or amended tax returns. Documents should never be backdated or created to support transactions that did not actually occur. Practical steps for business owners Division 7A should be reviewed throughout the year—not only when the company tax return is prepared. A practical compliance process should include: Reconciling shareholder and director loan accounts; Identifying private expenses paid by the company; Reviewing benefits provided to shareholders and family members; Documenting new loans before the company’s lodgment day; Calculating minimum yearly repayments; Confirming repayments have cleared by 30 June; Checking the source of repayment funds; Preparing a distributable-surplus calculation; and Reviewing trust distributions and UPEs. The bottom line Division 7A can turn an informal payment, loan or accounting entry into an unfranked taxable dividend. The best risk-management strategy is to identify transactions early, maintain effective documentation and review all shareholder and related-party accounts before 30 June and before lodging the company’s tax return. Division 7A is highly fact-dependent. Business owners should obtain professional advice before implementing or correcting a private company or trust arrangement. This blog provides general information only and is current as at 13 August 2026. It is not legal, tax or financial advice.