Cirque du Soleil founder to be taxed for $42M trip to space
Published Friday, September 14, 2018 2:40PM EDT
The founder of Cirque du Soleil will be forced to pay hefty taxes for a highly publicized trip to space he took nearly a decade ago after a judge refuted his claim that it was for business purposes.
Quebec billionaire Guy Laliberte blasted off to space aboard a Russian rocket for a 12-day mission on the International Space Station (ISS) in 2009. The founder and then controlling shareholder of the acrobatic entertainment company was reimbursed for the journey’s whopping $41.8-million price tag by Cirque du Soleil upon his return to Earth, claiming it as a promotional expense for the business.
During his time in space, Laliberte appeared via a live broadcast video link in a number of benefit concerts and events featuring celebrities such as Bono and Shakira at 14 venues around the world as part of a fundraising effort known as “Poetic Social Mission.”
The benefit concerts were intended to raise funds for the charity One Drop Foundation, which supports the availability of clean pure water and which has also been the recipient of personal donations by Laliberte himself.
Laliberte claimed his trip to space was a taxable benefit because he promoted Cirque du Soleil and the company’s recent entry into the Russian market with a new show during his time on the ISS.
The Canada Revenue Agency challenged this narrative, prompting the Tax Court of Canada to weigh in.
On Wednesday, the Tax Court of Canada ruled that Laliberte’s trip was for “overwhelmingly” personal reasons and that only 10 per cent of the expenses, or $4.2 million, could be considered business related for Cirque du Soleil promotional activities and the One Drop Foundation.
“Simply put, there is a difference between a business trip which involves or includes personal enjoyment aspects, and a personal trip with business aspects, even significant ones, tacked on. I have found that this space trip falls into the latter category,” Justice Patrick Boyle wrote in his 20-page decision.
The judge quoted Laliberte as calling himself a “space tourist” and saying that the trip was the fulfillment of a personal dream in media interviews. Boyle also wrote that Laliberte had publicly talked about his goal to visit space after watching Neil Armstrong walk on the moon and visiting Expo 67 as a child.
The ruling also noted that there was no evidence Cirque du Soleil ever considered sending anyone else on the trip and there were never any plans for similar publicity stunts for brand awareness before or after the 2009 expedition.
A spokesperson for Laliberte told The Canadian Press that he paid all of the taxes associated with the trip and the remaining questions are about the personal benefit versus the business proportion.
It’s expected Laliberte will be required to pay nearly $20 million in taxes; however, he will still have the opportunity to appeal the decision.
With files from CTV Montreal’s Kelly Greig and The Canadian Press