Companies have tax questions to answer as working class taxpayers pay more tax than them

Date
    December 27, 2015
    Canberra Times



The list of tax paid by public companies will give the public a more transparent picture about who pays what.

Well done to The Canberra Times for its recent editorial on big business tax avoidance.   [smiley=thumbsup.gif] 

It is good to see some members of the ruling class understand the political ramifications likely to flow from the fact that 38 per cent of the public companies and foreign private companies in the Corporate Tax Transparency Report with turnover greater than $100 million paid no income tax.   :(

The report will I think make it almost impossible politically for this government to sell its austerity program or its GST "reform" proposals. The mantra that Australia has a spending problem, not a revenue problem, looks hollow in the light of the low tax contribution from big business.


One benefit of the report may be to force companies to be more upfront about their tax affairs. This is certainly warranted for the 579 companies who paid no tax. Some will have an innocent explanation – they made a loss that year or carried forward previous year losses to wipe out any taxable income.

Qantas for example has said, in response to the release of information showing that despite in having gross revenue of $15 billion that it made a loss that year. True enough, but what we want to know is if that was a trading loss as a result of poor market circumstances or a result of playing the tax planning game – or a combination of both.

Even those companies which do pay tax in Australia might need to come forward with an explanation about their tax affairs. For example on the surface it looks good that Apple paid $74 million tax on taxable income of $247 million, a rate of about 29 per cent. However this is on sales of over $6 billion in Australia.

According to Neil Chenoweth in the Australian Financial Review, Apple shifted $8.9 billion in profit from Australia to Ireland over the decade to 2013. Apple here pays a lot of money to related companies in Ireland, a low-tax country, for intellectual property rights. Maybe Apple should tell us about those arrangements.

Google too, after a few years of reports suggesting it had in one year paid only $740,000 tax yet earned more than $2 billion in revenue for Australian sources, seems to have a better story to tell. Closer examination suggests we need more detail from the company.

Google paid $9 million tax in Australia on a taxable income of $90 million. What explains the discrepancy between the statutory company tax rate of 30 per cent and the tax rate of 10 per cent that Google paid in 2013-14?

Foreign tax offsets (tax credits), imputation offsets and research and development offsets might be part of the explanation. That however just raises a question as to whether such offsets (and special deductions and exemptions businesses may get) are good policy.

Google also appears to have "diverted" much of its Australian source income to Singapore. It is easy to do. When Australians contract with Google to put ads on the site, we contract with a Singapore entity. In general terms, under the tax treaty with Singapore, that country then has the taxing rights over that income because it isn't associated with the Australian entity.

There are legitimate legislated ways to reduce tax, including "extra" deductions, exemptions and offsets (credits). The low amount of tax big business pays suggests such legitimate ways which are only legitimate because of government legislation, should be under the spot light too.

Given 60 per cent of the energy and resource companies covered in the report pay no tax – and yes I know the collapse in resource prices and whether a mine is on-stream and exporting its products or not are important factors in this – surely the usefulness of an extra $1.5 billion in deductions, resulting in tax foregone in 2012-13 of $550 million, is open to question?

This Corporate Tax Transparency Report gives us some information but not enough to make informed decisions about who are and who are not the tax avoiders and the tax planners. The onus is now on the companies who pay little or no income tax in the report to explain how that has come about.

If big business wants to win back the trust of working class taxpayers who pay more tax than them, in some cases literally and in many cases as a percentage of their income, then it is time for those companies to explain how it is that their tax contribution is zero or small. After all if they have nothing to hide they should have nothing to fear from telling us their full tax story.   ;)

John Passant is a former assistant commissioner of taxation in the Australian Tax Office.

If big business wants to win back the trust of working class taxpayers who pay more tax than them, in some cases literally and in many cases as a percentage of their income, then it is time for those companies to explain how it is that their tax contribution is zero or small. After all if they have nothing to hide they should have nothing to fear from telling us their full tax story.   Wink


exactly.....no one is against that...

lets also hear how much churches collect and pay nothing on.

same with unions...

and charities...lets have more transparency all round.

The report will I think make it almost impossible politically for this government to sell its austerity program or its GST "reform" proposals. The mantra that Australia has a spending problem, not a revenue problem, looks hollow in the light of the low tax contribution from big business.   :(

wrote on Dec 28^th, 2015 at 7:06am:

The report will I think make it almost impossible politically for this government to sell its austerity program or its GST "reform" proposals. The mantra that Australia has a spending problem, not a revenue problem, looks hollow in the light of the low tax contribution from big business.   :(

Probably not the government for this sort of change relies on a combination of the locked in vote and the general lack of knowledge in the community overall. Most people do not know much about this and are happy to believe what some politician tells them.

There are legitimate legislated ways to reduce tax,

I like the way people just accept this as an answer:

Why are there legitimate ways to reduce tax - why should we have legitimate ways to reduce tax ?

Tax should not be optional for some, we should all pay the level of tax we are meant to pay.

Why should I be able to get out of bed this morning and just decide that I am not going to pay any tax this year ?

Taxation is not meant to be optional but under the current rules in Australia for many it is.

What we see suggested as tax reform is nothing but a formula to get more tax from the little guy while continuing to not tax the people who choose to not contribute.

cods wrote on Dec 28^th, 2015 at 7:03am:

If big business wants to win back the trust of working class taxpayers who pay more tax than them, in some cases literally and in many cases as a percentage of their income, then it is time for those companies to explain how it is that their tax contribution is zero or small. After all if they have nothing to hide they should have nothing to fear from telling us their full tax story.   Wink exactly.....no one is against that... lets also hear how much churches collect and pay nothing on. same with unions... and charities...lets have more transparency all round.

[smiley=tekst-toppie.gif]

The majority of tax is paid by stolen from, a minority of taxpayers whether they be individuals or companies.


Dnarever wrote on Dec 28^th, 2015 at 7:53am:

I like the way people just accept this as an answer: Why are there legitimate ways to reduce tax - why should we have legitimate ways to reduce tax ?

Due to the fact that it's not about reducing tax, it's about accounting for production, trade and operating expenses.  In most companies one of the major expenses is wages.  Company tax s paid on net profit after trade, production & operating costs are deducted.  (as the other Crook thread explained in great length}

If companies were made to pay tax on gross revenues there would be next to no companies doing business in this country and justabout everyone would be unemployed.


wrote on Dec 28^th, 2015 at 7:06am:

The report will I think make it almost impossible politically for this government to sell its austerity program or its GST "reform" proposals. The mantra that Australia has a spending problem, not a revenue problem, looks hollow in the light of the low tax contribution from big business.   :(

This statement totally ignores the enterprise, investment and employment that companies provide the economy even by those companies that didn't pay any company tax in that one sample fiscal year.  ::)

It's the ochlocratic class that don't pay enough tax.  That is the problem.  They want someone else, be it, corporate or successful individual, to provide the lion's share for them.  Why?  Because they can.

They vote themselves cash from the public purse and vote so that they don't pay their fair share and to make other people pay for it for them.  :(  That is our flawed democracy.  Our tyranny of the masses.  Our modern day slave trade.  :( :( :(

Companies are the heart of the economy and whinging Leftists are most definitely the cholesterol.  :D

Swag still employing the same old arguments.  I will employ the same old link: http://debatepedia.idebate.org/en/index.php/Debate:_Progressive_tax_vs._flat_tax as a way to inform the rest of the forum.

I don't think Swag's argument is wrong - just that it is weak when there are other considerations that are so much stronger. 

stunspore wrote on Dec 28^th, 2015 at 12:15pm:

Swag still employing the same old arguments.  I will employ the same old link: http://debatepedia.idebate.org/en/index.php/Debate:_Progressive_tax_vs._flat_tax as a way to inform the rest of the forum. I don't think Swag's argument is wrong - just that it is weak when there are other considerations that are so much stronger.

I don't think Swag's argument is wrong

No it is wrong - he looks at tax avoidance and sees legitimate deductions.

Many of these companies structure themselves in a manner and pay consultants huge wages to ensure that they pay virtually no tax.

It costs many millions of dollars for many of these companies to remain tax free year after year.

And don't make the mistake of thinking that the tax consultants pay any tax either.

They are morally wrong - but not necessarily legally wrong.  Sadly, most of the lib supporters when I read the posts suggest they are morally bankrupt with little shred of humanity if any.  Mostly - they are poor and they deserve it or some other crap.

I re-post the following here, as it is relevant!


perceptions_now wrote on Dec 28^th, 2015 at 1:13pm:

Ikea’s tax bill dwindles despite big sales Swedish furniture giant Ikea’s poor run of profitability in Australia has continued despite booming sales and a growing store network, with the group again sending tens of millions of pre-tax dollars offshore, significantly shrinking its profit and local tax bill. While Australians’ love of Ikea furniture, housewares and storage products has never been stronger, with the retailer adding nearly $100 million in sales for the 2015 financial year, the global retail juggernaut cannot seem to get its after-tax profit moving in the same direction. Ikea’s latest financial accounts, lodged with the corporate regulator and obtained by The Australian, include an impenetrable set of statements for the year to August 31, 2015. The accounts include a series of unexplained costs and payments that amount to nearly $90m, which stripped away from an otherwise robust gross profit of more than $300m for the year. The bottom-line results for Ikea Australia reveal net profit for 2015 actually fell to $15.1m, from $21.64m in the previous year, marking a massive 30 per cent slide in profitability for the period. Revenue for 2015 rose to $827.39m, from $733.46m, a gain of 13 per cent. By the time a ‘franchise fee’ of $27.56m and ‘other expenses’ of $61.83m was applied to the retailer’s gross profit of $300m, Ikea’s profit before tax had been whittled down to only $24.47m. These other expenses do not cover the usual costs of doing business such as wages, advertising, rent and occupancy costs. In 2014 it was a similar story, with franchise and other expenses totalling $70.9m while an opaque line item titled “payment under risk agreement’’ swiped another $37.06m from Ikea’s before-tax profit. It is believed all of these payments are sent offshore to more friendly tax jurisdictions. http://www.dailytelegraph.com.au/business/breaking-news/ikeas-tax-bill-dwindles-despite-big-sales/story-fnn9c0gv-1227690358104 ============================================== A few observations - 1) If it is so obvious, that Tax on Australian generated Profits are being "evaded", the Why doesn't the ATO take Legal action? 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Q. What is "THE message" that our Pollies understand? A. Sack every "incumbent", at the next election & keep doing so, UNTIL THEY FINALLY GET IT - THE MESSAGE!!!

perceptions_now wrote on Dec 28^th, 2015 at 1:15pm:

I re-post the following here, as it is relevant! perceptions_now wrote on Dec 28th, 2015 at 1:13pm: Ikea’s tax bill dwindles despite big sales Swedish furniture giant Ikea’s poor run of profitability in Australia has continued despite booming sales and a growing store network, with the group again sending tens of millions of pre-tax dollars offshore, significantly shrinking its profit and local tax bill. While Australians’ love of Ikea furniture, housewares and storage products has never been stronger, with the retailer adding nearly $100 million in sales for the 2015 financial year, the global retail juggernaut cannot seem to get its after-tax profit moving in the same direction. Ikea’s latest financial accounts, lodged with the corporate regulator and obtained by The Australian, include an impenetrable set of statements for the year to August 31, 2015. The accounts include a series of unexplained costs and payments that amount to nearly $90m, which stripped away from an otherwise robust gross profit of more than $300m for the year. The bottom-line results for Ikea Australia reveal net profit for 2015 actually fell to $15.1m, from $21.64m in the previous year, marking a massive 30 per cent slide in profitability for the period. Revenue for 2015 rose to $827.39m, from $733.46m, a gain of 13 per cent. By the time a ‘franchise fee’ of $27.56m and ‘other expenses’ of $61.83m was applied to the retailer’s gross profit of $300m, Ikea’s profit before tax had been whittled down to only $24.47m. These other expenses do not cover the usual costs of doing business such as wages, advertising, rent and occupancy costs. In 2014 it was a similar story, with franchise and other expenses totalling $70.9m while an opaque line item titled “payment under risk agreement’’ swiped another $37.06m from Ikea’s before-tax profit. It is believed all of these payments are sent offshore to more friendly tax jurisdictions. http://www.dailytelegraph.com.au/business/breaking-news/ikeas-tax-bill-dwindles-despite-big-sales/story-fnn9c0gv-1227690358104 ============================================== A few observations - 1) If it is so obvious, that Tax on Australian generated Profits are being "evaded", the Why doesn't the ATO take Legal action? 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Q. What is "THE message" that our Pollies understand? A. Sack every "incumbent", at the next election & keep doing so, UNTIL THEY FINALLY GET IT - THE MESSAGE!!!

Nope big business is merely carrying forward losses from previous years, and they employ people so why should they be expected to pay their proper tax's , you lefties don't get it do you, retards.

stunspore wrote on Dec 28^th, 2015 at 12:15pm:

Swag still employing the same old arguments.

It's the same old question (complaint)...... so why would my answer change?


stunspore wrote on Dec 28^th, 2015 at 12:15pm:

I will employ the same old link: http://debatepedia.idebate.org/en/index.php/Debate:_Progressive_tax_vs._flat_tax as a way to inform the rest of the forum. I don't think Swag's argument is wrong - just that it is weak when there are other considerations that are so much stronger.

Not stronger, just more popular,which is the underlying issue.  Just because it has popular support doesn't mean that it is fair, just or correct.

The majority can vote for a policy to enslave minorities.  It may well have popular support of the majority (for example the Confederate States of America) but that doesn't make the policy "fair, just or correct"  :-?

Think about that, and then apply that thought to progressive taxation.  :-?


Dnarever wrote on Dec 28^th, 2015 at 12:52pm:

No it is wrong - he looks at tax avoidance and sees legitimate deductions. Many of these companies structure themselves in a manner and pay consultants huge wages to ensure that they pay virtually no tax. It costs many millions of dollars for many of these companies to remain tax free year after year. And don't make the mistake of thinking that the tax consultants pay any tax either

Your argument uses the exception rather than the norm.  Undoubtedly there is tax avoidance as an exception.  There is tax avoidance by individuals and corporates.  You have likely avoided tax consciously or unconsciously many times.  There is crime everywhere, welfare fraud, theft, rip offs, collusion, price gouging, black mail, corruption, vote stacking, insider trading but at the end of the day it's the exception not the norm.

This thread is just sensationalism. You can't tell anything from the bottom line.  One has to look (analyse) the financial statements.  That's why there is a tax office with tax gurus. 

The moment I read 'ruling class' I knew the OP was a waste of time. What rubbish is that to assign a class structure to Australian society which is as egalitarian as you will find anywhere on the planet. What is actually meant is 'rich people', successful people' or the 'subject of envy class'.

The Canberra Times is nothing more than a Public Service broadsheet filled with PS drivel and the left-wing envy that usually comes hand in hand.

The dislike and distrust of business that is evidenced here does not provide a nursery for new business. Potential entrepreneurs and new business owners want to think that people will support them as they create jobs and export earnings for the country. But instead, they get this envy culture that seeks to criticise, often with a  great deal of hate and bitterness.

How dare anyone make a loss in business and not pay tax. How dare they make hundreds of millions in profit and pay tax on that while the owners become mega rich?

and we wonder why so many successful people and ideas go to silicon valley as did Australias most successful software company... because as a culture, we despise success and wealth and mock failure.

There is no 'ruling class'.

perceptions_now wrote on Dec 28^th, 2015 at 1:15pm:

I re-post the following here, as it is relevant! perceptions_now wrote on Dec 28th, 2015 at 1:13pm: Ikea’s tax bill dwindles despite big sales Swedish furniture giant Ikea’s poor run of profitability in Australia has continued despite booming sales and a growing store network, with the group again sending tens of millions of pre-tax dollars offshore, significantly shrinking its profit and local tax bill. While Australians’ love of Ikea furniture, housewares and storage products has never been stronger, with the retailer adding nearly $100 million in sales for the 2015 financial year, the global retail juggernaut cannot seem to get its after-tax profit moving in the same direction. Ikea’s latest financial accounts, lodged with the corporate regulator and obtained by The Australian, include an impenetrable set of statements for the year to August 31, 2015. The accounts include a series of unexplained costs and payments that amount to nearly $90m, which stripped away from an otherwise robust gross profit of more than $300m for the year. The bottom-line results for Ikea Australia reveal net profit for 2015 actually fell to $15.1m, from $21.64m in the previous year, marking a massive 30 per cent slide in profitability for the period. Revenue for 2015 rose to $827.39m, from $733.46m, a gain of 13 per cent. By the time a ‘franchise fee’ of $27.56m and ‘other expenses’ of $61.83m was applied to the retailer’s gross profit of $300m, Ikea’s profit before tax had been whittled down to only $24.47m. These other expenses do not cover the usual costs of doing business such as wages, advertising, rent and occupancy costs. In 2014 it was a similar story, with franchise and other expenses totalling $70.9m while an opaque line item titled “payment under risk agreement’’ swiped another $37.06m from Ikea’s before-tax profit. It is believed all of these payments are sent offshore to more friendly tax jurisdictions. http://www.dailytelegraph.com.au/business/breaking-news/ikeas-tax-bill-dwindles-despite-big-sales/story-fnn9c0gv-1227690358104 ============================================== A few observations - 1) If it is so obvious, that Tax on Australian generated Profits are being "evaded", the Why doesn't the ATO take Legal action? 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Q. What is "THE message" that our Pollies understand? A. Sack every "incumbent", at the next election & keep doing so, UNTIL THEY FINALLY GET IT - THE MESSAGE!!!

BECAUSE IT ISNT ILLEGAL!!!  WHY must you be the only person in the country that doesn't yet realise that?  Countries around the globe are working together to find a solution to this problem because it will require a global collaboration.

Please try and keep up with the facts!

That's because it SHOULD be illegal... it simply isn't possible to operate at a loss year after year and maintain that you are running a business..... especially in the retail sector, where you buy cheap and sell pricey.... and especially when you 'value add' by manufacturing, shipping and selling yourself....

mariacostel wrote on Dec 28^th, 2015 at 5:38pm:

The moment I read 'ruling class' I knew the OP was a waste of time. What rubbish is that to assign a class structure to Australian society which is as egalitarian as you will find anywhere on the planet. What is actually meant is 'rich people', successful people' or the 'subject of envy class'. The Canberra Times is nothing more than a Public Service broadsheet filled with PS drivel and the left-wing envy that usually comes hand in hand. The dislike and distrust of business that is evidenced here does not provide a nursery for new business. Potential entrepreneurs and new business owners want to think that people will support them as they create jobs and export earnings for the country. But instead, they get this envy culture that seeks to criticise, often with a  great deal of hate and bitterness. How dare anyone make a loss in business and not pay tax. How dare they make hundreds of millions in profit and pay tax on that while the owners become mega rich? and we wonder why so many successful people and ideas go to silicon valley as did Australias most successful software company... because as a culture, we despise success and wealth and mock failure. There is no 'ruling class'.

Spoken like a rusted-on member of the underclass.

Have you met Longy yet, dear?

mariacostel wrote on Dec 28^th, 2015 at 5:38pm:

The moment I read 'ruling class' I knew the OP was a waste of time. What rubbish is that to assign a class structure to Australian society which is as egalitarian as you will find anywhere on the planet. What is actually meant is 'rich people', successful people' or the 'subject of envy class'. The Canberra Times is nothing more than a Public Service broadsheet filled with PS drivel and the left-wing envy that usually comes hand in hand. The dislike and distrust of business that is evidenced here does not provide a nursery for new business. Potential entrepreneurs and new business owners want to think that people will support them as they create jobs and export earnings for the country. But instead, they get this envy culture that seeks to criticise, often with a  great deal of hate and bitterness. How dare anyone make a loss in business and not pay tax. How dare they make hundreds of millions in profit and pay tax on that while the owners become mega rich? and we wonder why so many successful people and ideas go to silicon valley as did Australias most successful software company... because as a culture, we despise success and wealth and mock failure. There is no 'ruling class'.

How dare anyone make a loss in business and not pay tax.

Yes how dare they - they even make a loss when they meet record income levels year after year. Some of our most successful multi billion dollar companies never make a taxable profit.

You mean past PM's wives don't get a free pass on drink driving charges... and a rich man isn't given a soft ride in the courts?  You mean the entire focus of 'law' here for over two hundred years has been to keep the 'lesser people' in line since they are drunken brawlers or no value?

mariacostel wrote on Dec 28^th, 2015 at 5:41pm:

perceptions_now wrote on Dec 28th, 2015 at 1:15pm: I re-post the following here, as it is relevant! perceptions_now wrote on Dec 28th, 2015 at 1:13pm: Ikea’s tax bill dwindles despite big sales Swedish furniture giant Ikea’s poor run of profitability in Australia has continued despite booming sales and a growing store network, with the group again sending tens of millions of pre-tax dollars offshore, significantly shrinking its profit and local tax bill. While Australians’ love of Ikea furniture, housewares and storage products has never been stronger, with the retailer adding nearly $100 million in sales for the 2015 financial year, the global retail juggernaut cannot seem to get its after-tax profit moving in the same direction. Ikea’s latest financial accounts, lodged with the corporate regulator and obtained by The Australian, include an impenetrable set of statements for the year to August 31, 2015. The accounts include a series of unexplained costs and payments that amount to nearly $90m, which stripped away from an otherwise robust gross profit of more than $300m for the year. The bottom-line results for Ikea Australia reveal net profit for 2015 actually fell to $15.1m, from $21.64m in the previous year, marking a massive 30 per cent slide in profitability for the period. Revenue for 2015 rose to $827.39m, from $733.46m, a gain of 13 per cent. By the time a ‘franchise fee’ of $27.56m and ‘other expenses’ of $61.83m was applied to the retailer’s gross profit of $300m, Ikea’s profit before tax had been whittled down to only $24.47m. These other expenses do not cover the usual costs of doing business such as wages, advertising, rent and occupancy costs. In 2014 it was a similar story, with franchise and other expenses totalling $70.9m while an opaque line item titled “payment under risk agreement’’ swiped another $37.06m from Ikea’s before-tax profit. It is believed all of these payments are sent offshore to more friendly tax jurisdictions. http://www.dailytelegraph.com.au/business/breaking-news/ikeas-tax-bill-dwindles-despite-big-sales/story-fnn9c0gv-1227690358104 ============================================== A few observations - 1) If it is so obvious, that Tax on Australian generated Profits are being "evaded", the Why doesn't the ATO take Legal action? 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Q. What is "THE message" that our Pollies understand? A. Sack every "incumbent", at the next election & keep doing so, UNTIL THEY FINALLY GET IT - THE MESSAGE!!! BECAUSE IT ISNT ILLEGAL!!!  WHY must you be the only person in the country that doesn't yet realise that?  Countries around the globe are working together to find a solution to this problem because it will require a global collaboration. Please try and keep up with the facts!

Well Longy, it seems your "Reading & Comprehension" still haven't got any better, as you missed, elected not to read or didn't understand the following, which was in my post!

2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand.

Our Pollies & Others, can resolve the Problem/s, IF THEY WANT TO!

Grappler Deep State Feller wrote on Dec 28^th, 2015 at 6:21pm:

That's because it SHOULD be illegal... it simply isn't possible to operate at a loss year after year and maintain that you are running a business..... especially in the retail sector, where you buy cheap and sell pricey.... and especially when you 'value add' by manufacturing, shipping and selling yourself....

New businesses can sometimes take as long as ten years to be profitable. Twitter for example has never yet made a profit.

If it is so easy to make a fortune in retail why don't you have a go and see for yourself why it is the single worst performing sector in the economy.

perceptions_now wrote on Dec 28^th, 2015 at 7:26pm:

mariacostel wrote on Dec 28th, 2015 at 5:41pm: perceptions_now wrote on Dec 28th, 2015 at 1:15pm: I re-post the following here, as it is relevant! perceptions_now wrote on Dec 28th, 2015 at 1:13pm: Ikea’s tax bill dwindles despite big sales Swedish furniture giant Ikea’s poor run of profitability in Australia has continued despite booming sales and a growing store network, with the group again sending tens of millions of pre-tax dollars offshore, significantly shrinking its profit and local tax bill. While Australians’ love of Ikea furniture, housewares and storage products has never been stronger, with the retailer adding nearly $100 million in sales for the 2015 financial year, the global retail juggernaut cannot seem to get its after-tax profit moving in the same direction. Ikea’s latest financial accounts, lodged with the corporate regulator and obtained by The Australian, include an impenetrable set of statements for the year to August 31, 2015. The accounts include a series of unexplained costs and payments that amount to nearly $90m, which stripped away from an otherwise robust gross profit of more than $300m for the year. The bottom-line results for Ikea Australia reveal net profit for 2015 actually fell to $15.1m, from $21.64m in the previous year, marking a massive 30 per cent slide in profitability for the period. Revenue for 2015 rose to $827.39m, from $733.46m, a gain of 13 per cent. By the time a ‘franchise fee’ of $27.56m and ‘other expenses’ of $61.83m was applied to the retailer’s gross profit of $300m, Ikea’s profit before tax had been whittled down to only $24.47m. These other expenses do not cover the usual costs of doing business such as wages, advertising, rent and occupancy costs. In 2014 it was a similar story, with franchise and other expenses totalling $70.9m while an opaque line item titled “payment under risk agreement’’ swiped another $37.06m from Ikea’s before-tax profit. It is believed all of these payments are sent offshore to more friendly tax jurisdictions. http://www.dailytelegraph.com.au/business/breaking-news/ikeas-tax-bill-dwindles-despite-big-sales/story-fnn9c0gv-1227690358104 ============================================== A few observations - 1) If it is so obvious, that Tax on Australian generated Profits are being "evaded", the Why doesn't the ATO take Legal action? 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Q. What is "THE message" that our Pollies understand? A. Sack every "incumbent", at the next election & keep doing so, UNTIL THEY FINALLY GET IT - THE MESSAGE!!! BECAUSE IT ISNT ILLEGAL!!!  WHY must you be the only person in the country that doesn't yet realise that?  Countries around the globe are working together to find a solution to this problem because it will require a global collaboration. Please try and keep up with the facts! Well Longy, it seems your "Reading & Comprehension" still haven't got any better, as you missed, elected not to read or didn't understand the following, which was in my post! 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Our Pollies & Others, can resolve the Problem/s, IF THEY WANT TO!

No one wants to listen (and no one actually does) to your conspiracy theories about tax laws. If you are so good then go and stand for parliament yourself.

But no... can't do that, can we?  That might mean I have to do something other than whine incessantly and incoherently about it.

Grappler Deep State Feller wrote on Dec 28^th, 2015 at 6:33pm:

You mean past PM's wives don't get a free pass on drink driving charges... and a rich man isn't given a soft ride in the courts?  You mean the entire focus of 'law' here for over two hundred years has been to keep the 'lesser people' in line since they are drunken brawlers or no value?

We all know you got done for an AVO in court and you are STILL whining about it.

Its boring and makes you look like a goose - and a violent one.

mariacostel wrote on Dec 28^th, 2015 at 7:32pm:

Grappler Deep State Feller wrote on Dec 28th, 2015 at 6:33pm: You mean past PM's wives don't get a free pass on drink driving charges... and a rich man isn't given a soft ride in the courts?  You mean the entire focus of 'law' here for over two hundred years has been to keep the 'lesser people' in line since they are drunken brawlers or no value? We all know you got done for an AVO in court and you are STILL whining about it. Its boring and makes you look like a goose - and a violent one.

Nothing violent inherent in an AVO - it is proof positive of no violence having occurred since it  purports to (while being itself violence and illegal as well as unwarranted) be in place to preclude violence.

Grow up.  Your inability to understand simple concepts makes you look like a goose... and your approach is certainly aggressive if not outright violent.

It may be of little concern to you that people are losing rights in this country to simply go about their daily business.... it is very important to me.

Grappler Deep State Feller wrote on Dec 28^th, 2015 at 8:08pm:

mariacostel wrote on Dec 28th, 2015 at 7:32pm: Grappler Deep State Feller wrote on Dec 28th, 2015 at 6:33pm: You mean past PM's wives don't get a free pass on drink driving charges... and a rich man isn't given a soft ride in the courts?  You mean the entire focus of 'law' here for over two hundred years has been to keep the 'lesser people' in line since they are drunken brawlers or no value? We all know you got done for an AVO in court and you are STILL whining about it. Its boring and makes you look like a goose - and a violent one. Nothing violent inherent in an AVO - it is proof positive of no violence having occurred since it  purports to (while being itself violence and illegal as well as unwarranted) be in place to preclude violence. Grow up.  Your inability to understand simple concepts makes you look like a goose... and your approach is certainly aggressive if not outright violent. It may be of little concern to you that people are losing rights in this country to simply go about their daily business.... it is very important to me.

You go on and on and on and on about law and how evil and inequitable it. Can you not see that your own experience has tainted and biased your viewpoint? And to be frank, the way you seem to have an very loose grip on reality (eg your Apollo 14 flight director relative and other such claims) makes your AVO more likely to be legit.

mariacostel wrote on Dec 28^th, 2015 at 8:13pm:

Grappler Deep State Feller wrote on Dec 28th, 2015 at 8:08pm: mariacostel wrote on Dec 28th, 2015 at 7:32pm: Grappler Deep State Feller wrote on Dec 28th, 2015 at 6:33pm: You mean past PM's wives don't get a free pass on drink driving charges... and a rich man isn't given a soft ride in the courts?  You mean the entire focus of 'law' here for over two hundred years has been to keep the 'lesser people' in line since they are drunken brawlers or no value? We all know you got done for an AVO in court and you are STILL whining about it, Its boring and makes you look like a goose - and a violent one. Nothing violent inherent in an AVO - it is proof positive of no violence having occurred since it  purports to (while being itself violence and illegal as well as unwarranted) be in place to preclude violence. Grow up.  Your inability to understand simple concepts makes you look like a goose... and your approach is certainly aggressive if not outright violent. It may be of little concern to you that people are losing rights in this country to simply go about their daily business.... it is very important to me. You go on and on and on and on about law and how evil and inequitable it. Can you not see that your own experience has tainted and biased your viewpoint? And to be frank, the way you seem to have an very loose grip on reality (eg your Apollo 14 flight director relative and other such claims) makes your AVO more likely to be legit.

The experience of millions does not count here?  You really have a very 'sheltered' view of life, and it is obvious your life has been tainted by it to the point of inadequacy to understand simple concepts.  Any imposition by a court of law is violence incarnate and may only be justified, under our Rule of Law, by a genuine act on the part of the person imposed upon... not on some myth that they might do something.

You, and your fellow detractors, have shown not one thing that I've said to be incorrect or false... it is all true... and you would be better served addressing the issues raised in the subject matter.

Companies indeed have a lot to answer for as regards taxation, as do governments for allowing them masses of loop-holes.

Do you have an opinion Crook?

Mania/Longy retreating!!!  Send in the cavalry..... get on their heels and give them no rest.. no time to regroup.... keep your sword in their back...

In reply to Swag.  Your values are pretty twisted but entitled to your own opinion.  It doesn't make you right when you keep spewing about the unfairness of taxation when you can't acknowledge the concerns of others, especially how the economy and society will work for the vulnerable and poor.

If all companies did was provide jobs and no profit tax -as you libs would like it - might as well be a public sector/government job?

Companies do have some big questions to answer regarding them paying their way... Sadly though, we do not have the politicians, public servants, tax office et al with the necessary metal to ask those questions.

This will pass and fade away, until the next article point out that companies STILL have tax questions to answer...

stunspore wrote on Dec 29^th, 2015 at 6:54am:

In reply to Swag.  Your values are pretty twisted but entitled to your own opinion.  It doesn't make you right when you keep spewing about the unfairness of taxation when you can't acknowledge the concerns of others, especially how the economy and society will work for the vulnerable and poor.

As I said before, I'm just offering my usual counter argument to the same old politics of envy rant.  Likewise you are entitled to your own view but neither does it make you right.

If you are so concerned with the vulnerable and poor, why don't you donate half your Net income to charity each week?  Give yourself a voluntary tax increase?  :D Maybe those on penalty rates can donate that double time Sunday shift to the people they are keeping out of work?  :D


stunspore wrote on Dec 29^th, 2015 at 6:54am:

If all companies did was provide jobs and no profit tax -as you libs would like it - might as well be a public sector/government job?

What makes you think that the Libs or I would like that?  That's twisted too?

Unprofitable companies do not attract capital investment. If you own shares in a company that becomes unprofitable then your share value will plummet.  Not good in anyone's book (except socialists I suppose)

Phemanderac wrote on Dec 29^th, 2015 at 7:01am:

Companies do have some big questions to answer regarding them paying their way... Sadly though, we do not have the politicians, public servants, tax office et al with the necessary metal to ask those questions. This will pass and fade away, until the next article point out that companies STILL have tax questions to answer...

With the exception of multinationals moving profits to low tax countries - on which we all agree - I am yet to hear anyone actually identify and detail these alleged 'loop holes' of which you rant. While even politicians might rant about this because it gains votes, they too do not come up with any genuine complaints.

Anyone care to do the honours of actually articulating and detailing one of these 'loop holes'?

mariacostel wrote on Dec 29^th, 2015 at 8:15am:

Phemanderac wrote on Dec 29th, 2015 at 7:01am: Companies do have some big questions to answer regarding them paying their way... Sadly though, we do not have the politicians, public servants, tax office et al with the necessary metal to ask those questions. This will pass and fade away, until the next article point out that companies STILL have tax questions to answer... With the exception of multinationals moving profits to low tax countries - on which we all agree - I am yet to hear anyone actually identify and detail these alleged 'loop holes' of which you rant. While even politicians might rant about this because it gains votes, they too do not come up with any genuine complaints. Anyone care to do the honours of actually articulating and detailing one of these 'loop holes'?

Don't lie, troll. You've been told about them already. Multiple times. You even replied to the posts with your usual rubbish.


mariacostel wrote on Nov 25^th, 2015 at 10:10am:

Bam wrote on Nov 25th, 2015 at 9:12am: One example - used extensively as a profit-shifting measure by multinational corporations - is for the Australian arm of that business to "borrow" money from a foreign arm of the same corporation at exorbitant interest rates that effectively send money overseas without being taxed. The "debt" is pure fiction - the company is "borrowing" money from itself - but it is currently legal under Australian law. We need measures to stop this, such as requiring all businesses doing business in Australia that borrow money to borrow that money from an Australian bank, or to have a deemed interest rate for foreign corporate borrowings that is closely aligned to the average corporate interest rate but discounted by the corporate tax rate. Other similar measures are possible that combat corporate tax avoidance. The findings of the Senate inquiry will be revealing. So basically just follow your ideology and bias?

mariacostel wrote on Dec 20^th, 2015 at 5:22pm:

Bam wrote on Dec 20th, 2015 at 1:42pm: Many of the deductions are necessary. The problem here is that not all of them are and the rules for some deductions are far too lax. When various multinationals were dragged in front of the Senate to provide an explanation of their tax affairs, they all said much the same thing - they avoid tax because Australian law permits it. Sending money overseas is a case in point. It's currently legal for multinational corporations to create a financial structure where they "borrow" money from a foreign branch of the same corporation that charges "interest" and then the Australian branch "repays" the "loan". The "interest rate" on these "loans" is well above market rates. And yes, I used scare quotes liberally because this is extremely dubious IMO. It is not hard to fix this particular rort. Require all corporate loans and debts to be held by an Australian bank (a company incorporated in Australia that holds an Australian banking licence). Any debts that do not conform are either not deductible at all, or have a maximum deemed interest rate equal to the RBA's cash rate, currently 2%. As always, you are making quite silly statements.  When Qantas wants to borrow $8B for new planes where does it go? Down to the local branch of the ANZ?  When BHP needs to raise $3B for a new project does it run a Kickstarter? Stop fixating on multinationals and actually express you endless hatred of AUSTRALIAN business. Details the deductions you disagree with instead of making wild and unspecified complaints.

Or how about this post that you obviously didn't read? It even has a link.


Bam wrote on Dec 21^st, 2015 at 3:48pm:

crocodile wrote on Dec 21st, 2015 at 1:36pm: tickleandrose wrote on Dec 21st, 2015 at 12:46pm: Example 2 - Questionable practice. This company have 1 million dollars, but its 'based' in a nation with lax tax regulation.  It sets up a company in Australia, and 'borrows'  1 million dollars from its other company at the interest rate of say 7% (note, business loan usually higher than home loan).    The company makes 100 000 dollars like example 1 after usual deduction, but also deducts 70 000 in interest repayment.  So all it have to do now is to pay 30 000 worth of company tax to Australia.     The other 70 000 in profit goes to the head company in tax heaven, where it pays <10% tax. It doesn't matter where it borrows the money. Interest has to be paid whether it borrows from another subsidiary, the bank of China or Mr Khemlani. The example given is a fictitious loan that is designed to send money out of Australia without being taxed. For example, if the multinational "Megacorp" has branches in Australia and Singapore, and Megacorp sets up a financial structure where Megacorp Australia "borrows" money from Megacorp Singapore at a high interest rate, on paper it's simply interest payments on a loan, but in actual fact it is simply money being sent out of Australia tax-free. Some other tax avoidance strategies used by multinationals: * Transfer pricing * Trademark holding companies * Captive real estate trusts

And then you post this rubbish in the same thread, three posts later:

mariacostel wrote on Dec 21^st, 2015 at 3:57pm:

And naturally you cannot detail these 'loopholes' even though they aren't loopholes in the first place.

This kind of nonsense is why nobody takes you seriously.

mariacostel wrote on Dec 28^th, 2015 at 7:31pm:

perceptions_now wrote on Dec 28th, 2015 at 7:26pm: mariacostel wrote on Dec 28th, 2015 at 5:41pm: perceptions_now wrote on Dec 28th, 2015 at 1:15pm: I re-post the following here, as it is relevant! perceptions_now wrote on Dec 28th, 2015 at 1:13pm: Ikea’s tax bill dwindles despite big sales Swedish furniture giant Ikea’s poor run of profitability in Australia has continued despite booming sales and a growing store network, with the group again sending tens of millions of pre-tax dollars offshore, significantly shrinking its profit and local tax bill. While Australians’ love of Ikea furniture, housewares and storage products has never been stronger, with the retailer adding nearly $100 million in sales for the 2015 financial year, the global retail juggernaut cannot seem to get its after-tax profit moving in the same direction. Ikea’s latest financial accounts, lodged with the corporate regulator and obtained by The Australian, include an impenetrable set of statements for the year to August 31, 2015. The accounts include a series of unexplained costs and payments that amount to nearly $90m, which stripped away from an otherwise robust gross profit of more than $300m for the year. The bottom-line results for Ikea Australia reveal net profit for 2015 actually fell to $15.1m, from $21.64m in the previous year, marking a massive 30 per cent slide in profitability for the period. Revenue for 2015 rose to $827.39m, from $733.46m, a gain of 13 per cent. By the time a ‘franchise fee’ of $27.56m and ‘other expenses’ of $61.83m was applied to the retailer’s gross profit of $300m, Ikea’s profit before tax had been whittled down to only $24.47m. These other expenses do not cover the usual costs of doing business such as wages, advertising, rent and occupancy costs. In 2014 it was a similar story, with franchise and other expenses totalling $70.9m while an opaque line item titled “payment under risk agreement’’ swiped another $37.06m from Ikea’s before-tax profit. It is believed all of these payments are sent offshore to more friendly tax jurisdictions. http://www.dailytelegraph.com.au/business/breaking-news/ikeas-tax-bill-dwindles-despite-big-sales/story-fnn9c0gv-1227690358104 ============================================== A few observations - 1) If it is so obvious, that Tax on Australian generated Profits are being "evaded", the Why doesn't the ATO take Legal action? 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Q. What is "THE message" that our Pollies understand? A. Sack every "incumbent", at the next election & keep doing so, UNTIL THEY FINALLY GET IT - THE MESSAGE!!! BECAUSE IT ISNT ILLEGAL!!!  WHY must you be the only person in the country that doesn't yet realise that?  Countries around the globe are working together to find a solution to this problem because it will require a global collaboration. Please try and keep up with the facts! Well Longy, it seems your "Reading & Comprehension" still haven't got any better, as you missed, elected not to read or didn't understand the following, which was in my post! 2) If the Proper amount of Tax on Australian generated Profits are being "evaded", because Australian Politicians have not done their job properly in constructing the OZ TAX LAWS, then its past time when they (our Politicians) were given the only message they understand. Our Pollies & Others, can resolve the Problem/s, IF THEY WANT TO! No one wants to listen (and no one actually does) to your conspiracy theories about tax laws. If you are so good then go and stand for parliament yourself. But no... can't do that, can we?  That might mean I have to do something other than whine incessantly and incoherently about it.

Well Longy, IT'S CERTAIN THAT YOU DON'T LISTEN, TO ANYONE ELSE, BESIDES YOURSELF, which (of course) includes one other, no prizes for guessing who that is!

Bam wrote on Dec 29^th, 2015 at 8:54am:

Or how about this post that you obviously didn't read? It even has a link. Bam wrote on Dec 21st, 2015 at 3:48pm: crocodile wrote on Dec 21st, 2015 at 1:36pm: tickleandrose wrote on Dec 21st, 2015 at 12:46pm: Example 2 - Questionable practice. This company have 1 million dollars, but its 'based' in a nation with lax tax regulation.  It sets up a company in Australia, and 'borrows'  1 million dollars from its other company at the interest rate of say 7% (note, business loan usually higher than home loan).    The company makes 100 000 dollars like example 1 after usual deduction, but also deducts 70 000 in interest repayment.  So all it have to do now is to pay 30 000 worth of company tax to Australia.     The other 70 000 in profit goes to the head company in tax heaven, where it pays <10% tax. It doesn't matter where it borrows the money. Interest has to be paid whether it borrows from another subsidiary, the bank of China or Mr Khemlani. The example given is a fictitious loan that is designed to send money out of Australia without being taxed. For example, if the multinational "Megacorp" has branches in Australia and Singapore, and Megacorp sets up a financial structure where Megacorp Australia "borrows" money from Megacorp Singapore at a high interest rate, on paper it's simply interest payments on a loan, but in actual fact it is simply money being sent out of Australia tax-free. Some other tax avoidance strategies used by multinationals: * Transfer pricing * Trademark holding companies * Captive real estate trusts And then you post this rubbish in the same thread, three posts later: mariacostel wrote on Dec 21st, 2015 at 3:57pm: And naturally you cannot detail these 'loopholes' even though they aren't loopholes in the first place. This kind of nonsense is why nobody takes you seriously.

Oh, how can you say that Bam, Longy takes himself seriously?!
Also Maria, takes Longy seriously, but that goes without saying of course, as it is difficult to disagree with yourself? 

perceptions_now wrote on Dec 29^th, 2015 at 1:47pm:

Bam wrote on Dec 29th, 2015 at 8:54am: Or how about this post that you obviously didn't read? It even has a link. Bam wrote on Dec 21st, 2015 at 3:48pm: crocodile wrote on Dec 21st, 2015 at 1:36pm: tickleandrose wrote on Dec 21st, 2015 at 12:46pm: Example 2 - Questionable practice. This company have 1 million dollars, but its 'based' in a nation with lax tax regulation.  It sets up a company in Australia, and 'borrows'  1 million dollars from its other company at the interest rate of say 7% (note, business loan usually higher than home loan).    The company makes 100 000 dollars like example 1 after usual deduction, but also deducts 70 000 in interest repayment.  So all it have to do now is to pay 30 000 worth of company tax to Australia.     The other 70 000 in profit goes to the head company in tax heaven, where it pays <10% tax. It doesn't matter where it borrows the money. Interest has to be paid whether it borrows from another subsidiary, the bank of China or Mr Khemlani. The example given is a fictitious loan that is designed to send money out of Australia without being taxed. For example, if the multinational "Megacorp" has branches in Australia and Singapore, and Megacorp sets up a financial structure where Megacorp Australia "borrows" money from Megacorp Singapore at a high interest rate, on paper it's simply interest payments on a loan, but in actual fact it is simply money being sent out of Australia tax-free. Some other tax avoidance strategies used by multinationals: * Transfer pricing * Trademark holding companies * Captive real estate trusts And then you post this rubbish in the same thread, three posts later: mariacostel wrote on Dec 21st, 2015 at 3:57pm: And naturally you cannot detail these 'loopholes' even though they aren't loopholes in the first place. This kind of nonsense is why nobody takes you seriously. Oh, how can you say that Bam, Longy takes himself seriously?! Also Maria, takes Longy seriously, but that goes without saying of course, as it is difficult to disagree with yourself?

https://www.youtube.com/watch?v=sGegWAT0CpM

Bam wrote on Dec 29^th, 2015 at 8:50am:

mariacostel wrote on Dec 29th, 2015 at 8:15am: Phemanderac wrote on Dec 29th, 2015 at 7:01am: Companies do have some big questions to answer regarding them paying their way... Sadly though, we do not have the politicians, public servants, tax office et al with the necessary metal to ask those questions. This will pass and fade away, until the next article point out that companies STILL have tax questions to answer... With the exception of multinationals moving profits to low tax countries - on which we all agree - I am yet to hear anyone actually identify and detail these alleged 'loop holes' of which you rant. While even politicians might rant about this because it gains votes, they too do not come up with any genuine complaints. Anyone care to do the honours of actually articulating and detailing one of these 'loop holes'? Don't lie, troll. You've been told about them already. Multiple times. You even replied to the posts with your usual rubbish. mariacostel wrote on Nov 25th, 2015 at 10:10am: Bam wrote on Nov 25th, 2015 at 9:12am: One example - used extensively as a profit-shifting measure by multinational corporations - is for the Australian arm of that business to "borrow" money from a foreign arm of the same corporation at exorbitant interest rates that effectively send money overseas without being taxed. The "debt" is pure fiction - the company is "borrowing" money from itself - but it is currently legal under Australian law. We need measures to stop this, such as requiring all businesses doing business in Australia that borrow money to borrow that money from an Australian bank, or to have a deemed interest rate for foreign corporate borrowings that is closely aligned to the average corporate interest rate but discounted by the corporate tax rate. Other similar measures are possible that combat corporate tax avoidance. The findings of the Senate inquiry will be revealing. So basically just follow your ideology and bias? mariacostel wrote on Dec 20th, 2015 at 5:22pm: Bam wrote on Dec 20th, 2015 at 1:42pm: Many of the deductions are necessary. The problem here is that not all of them are and the rules for some deductions are far too lax. When various multinationals were dragged in front of the Senate to provide an explanation of their tax affairs, they all said much the same thing - they avoid tax because Australian law permits it. Sending money overseas is a case in point. It's currently legal for multinational corporations to create a financial structure where they "borrow" money from a foreign branch of the same corporation that charges "interest" and then the Australian branch "repays" the "loan". The "interest rate" on these "loans" is well above market rates. And yes, I used scare quotes liberally because this is extremely dubious IMO. It is not hard to fix this particular rort. Require all corporate loans and debts to be held by an Australian bank (a company incorporated in Australia that holds an Australian banking licence). Any debts that do not conform are either not deductible at all, or have a maximum deemed interest rate equal to the RBA's cash rate, currently 2%. As always, you are making quite silly statements.  When Qantas wants to borrow $8B for new planes where does it go? Down to the local branch of the ANZ?  When BHP needs to raise $3B for a new project does it run a Kickstarter? Stop fixating on multinationals and actually express you endless hatred of AUSTRALIAN business. Details the deductions you disagree with instead of making wild and unspecified complaints.

you can be a very dim bulb at times. I said that OTHER THAN MULTINATIONALS.... make your case. Nobody supports their profit-shifting. But you abuse ALL companies so again, how about articulating your complaints about business in general?

Or is that too hard?

perceptions_now wrote on Dec 29^th, 2015 at 1:47pm:

Bam wrote on Dec 29th, 2015 at 8:54am: Or how about this post that you obviously didn't read? It even has a link. Bam wrote on Dec 21st, 2015 at 3:48pm: crocodile wrote on Dec 21st, 2015 at 1:36pm: tickleandrose wrote on Dec 21st, 2015 at 12:46pm: Example 2 - Questionable practice. This company have 1 million dollars, but its 'based' in a nation with lax tax regulation.  It sets up a company in Australia, and 'borrows'  1 million dollars from its other company at the interest rate of say 7% (note, business loan usually higher than home loan).    The company makes 100 000 dollars like example 1 after usual deduction, but also deducts 70 000 in interest repayment.  So all it have to do now is to pay 30 000 worth of company tax to Australia.     The other 70 000 in profit goes to the head company in tax heaven, where it pays <10% tax. It doesn't matter where it borrows the money. Interest has to be paid whether it borrows from another subsidiary, the bank of China or Mr Khemlani. The example given is a fictitious loan that is designed to send money out of Australia without being taxed. For example, if the multinational "Megacorp" has branches in Australia and Singapore, and Megacorp sets up a financial structure where Megacorp Australia "borrows" money from Megacorp Singapore at a high interest rate, on paper it's simply interest payments on a loan, but in actual fact it is simply money being sent out of Australia tax-free. Some other tax avoidance strategies used by multinationals: * Transfer pricing * Trademark holding companies * Captive real estate trusts And then you post this rubbish in the same thread, three posts later: mariacostel wrote on Dec 21st, 2015 at 3:57pm: And naturally you cannot detail these 'loopholes' even though they aren't loopholes in the first place. This kind of nonsense is why nobody takes you seriously. Oh, how can you say that Bam, Longy takes himself seriously?! Also Maria, takes Longy seriously, but that goes without saying of course, as it is difficult to disagree with yourself?

Most people think you are a bit of an irrelevant dope, perceptions. It is not hard to see why.

mariacostel wrote on Dec 29^th, 2015 at 5:45pm:

Most people think you are a bit of an irrelevant dope, perceptions. It is not hard to see why.

Is that really you Lisa?  -
You did say that you were Maria -

it sounds more like what Longy would say.

mariacostel wrote on Dec 29^th, 2015 at 5:45pm:

Most people think.

And that's exactly what separates us from you, Longy.

;)