Grappler Deep State Feller wrote on Dec 21^st, 2015 at 10:06am:


A defacto tax.

They may not be called 'taxes'  but arguably they are.

Swagman wrote on Dec 20^th, 2015 at 7:50pm:


Much in the way that a budget deficit is a 'defacto' tax in so much as it can take future tax dollars to pay it off.

Its not that simple, I can give an example of tax evasion by the multinational company.

Example 1 - usual practice.

This company have 1 million dollars, its based solely in Australia.  It invest the 1 million dollars.  The overall profit for the year is say 100 000 dollars for the company net (deducted already the expenses including wages).  So the company pay 100000 worth of company tax. 

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. 

Example 3 - More complicated questionable practice.

To avoid been nabbed by the ATO.  This company went into sort of mutual alliance with another company.  They both set up lending companies in the tax heaven borrows to each other.   And thereby reducing their tax liability in Australia.   

Note, the loser is not only the Australian people.  But the biggest loser is actually the example 1 company who is based in Australia.  That company have no chance to compete against the other examples.  Because the other two, due to lowered lax liability, can put more funding into R&D, or lower prices.   The company in Example 1 will probably have to either shut or do what the other company do as well. 

tickleandrose wrote on Dec 21^st, 2015 at 12:46pm:

stunspore wrote on Dec 21^st, 2015 at 12:09pm:



And they do.... your point?

Aussie wrote on Dec 21^st, 2015 at 1:55pm:


Perhaps. What is the $2.8 billion though. Is that revenue or profit. Have any losses from previous years been carried forward. What size dividend did they pay the shareholders. What was the size of the asset depreciation. Were they carrying any unsold stock. Until all those questions and probably a few more can be answered, any comments are not very insightful and probably damaging.

mariacostel wrote on Dec 21^st, 2015 at 1:31pm:


it's paid by the employees not the employer 

crocodile wrote on Dec 21^st, 2015 at 1:36pm:


In my examples 2 and 3.  The companies set up shell companies overseas, and lend to each other.  That way, the 'cost' of interest remain within the ownership.  However, the profit generated from the interest goes to a country with lower tax requirement, thereby higher profit for the ownership group.