Australian Politics Forum - Companies Have Tax Questions To Answer

Swagman

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Re: Companies Have Tax Questions To Answer
Reply #30 - Dec 29^th, 2015 at 7:58am

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? Cheesy

Maybe those on penalty rates can donate that double time Sunday shift to the people they are keeping out of work? Cheesy

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)

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mariacostel

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Re: Companies Have Tax Questions To Answer
Reply #31 - Dec 29^th, 2015 at 8:15am

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'?

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Bam

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Re: Companies Have Tax Questions To Answer
Reply #32 - Dec 29^th, 2015 at 8:50am

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

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'?

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 25^th, 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 20^th, 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.

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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.

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Bam

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Re: Companies Have Tax Questions To Answer
Reply #33 - 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 21^st, 2015 at 3:48pm:

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

tickleandrose wrote on Dec 21^st, 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.

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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.

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perceptions_now

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Re: Companies Have Tax Questions To Answer
Reply #34 - Dec 29^th, 2015 at 1:43pm

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

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

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

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 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-...
==============================================
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!

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perceptions_now

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Re: Companies Have Tax Questions To Answer
Reply #35 - Dec 29^th, 2015 at 1:47pm

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 21^st, 2015 at 3:48pm:

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

tickleandrose wrote on Dec 21^st, 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.

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?

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Its time

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Re: Companies Have Tax Questions To Answer
Reply #36 - Dec 29^th, 2015 at 3:38pm

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

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 21^st, 2015 at 3:48pm:

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

tickleandrose wrote on Dec 21^st, 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.

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?

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mariacostel

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Re: Companies Have Tax Questions To Answer
Reply #37 - Dec 29^th, 2015 at 5:43pm

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

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

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'?

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 25^th, 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 20^th, 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?

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mariacostel

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Re: Companies Have Tax Questions To Answer
Reply #38 - Dec 29^th, 2015 at 5:45pm

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

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 21^st, 2015 at 3:48pm:

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

tickleandrose wrote on Dec 21^st, 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.

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.

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Bobby. Gold Member Offline Australian Politics Posts: 107497 Melbourne Gender:	Re: Companies Have Tax Questions To Answer Reply #39 - Dec 29^th, 2015 at 6:30pm 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.
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greggerypeccary Gold Member Offline Australian Politics Posts: 140152 Gender:	Re: Companies Have Tax Questions To Answer Reply #40 - Dec 29^th, 2015 at 6:42pm mariacostel wrote on Dec 29^th, 2015 at 5:45pm: Most people think. And that's exactly what separates us from you, Longy.
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