Inquiry into how Apple, Google and Microsoft rob Australians by not paying Aus taxes

[AnotherCat]

Originally Posted by Lynx-lynx

@anothercat, so do you think Starbucks should have paid the UK taxes or not?

Gee, this country that you're not naming (because they are often shamed?) Should be able to withstand chatter about it, shouldn't it?

(And whilst trying to absorb your very informative post I too am enjoying arvo tea. [Daylight savings has finished here.])

Daylight savings finished here too (Easter weekend) and cooling down (not that it gets terribly warm here anyway ).

Regarding Starbucks, I couldn't (and wouldn't even though it seems many also can't comment but do) have an opinion as I am not involved and so not privy to the actual facts.

So the following is not an opinion just a statement; Starbucks UK claim they make no profit in the UK and the reason is due to trading conditions and transfer payments such as royalties and other intercompany charges. I assume those transfer payments are deductible in the UK as they are in most (all?) western jurisdictions, in which case I personally do not see a methodology problem. If the UK Revenue disagrees with the company's valuation of those transfer payments or with its other deductions from trading then it is up to the Revenue to take them to court to get a determination.

Personally I don't see why anyone should be upset unless they think that the likes of subsidiaries or franchisees are not entitled to take as costs of business the services their owners or franchisers provide to them (which includes a rental for the branding). One assumes that payment of those costs becomes revenue to the owners or franchisers in which case that contributes to their profit upon which THEY pay tax, albeit that may be in a different country and that country also may have a higher or lower company tax.

Regarding the country I am not naming; yes they (and others like it) do withstand the chatter about it (mostly by ignoring) as they have no desire to nor way of closing down the internet's chattering class media. So the chatter happens. As for myself I am too tired to engage on the matters specific to it because most of the chatter is just ideologically driven promulgated by those with genuine but misguided, or else malicious intent by "chattering" with the chattering classes, stirred on by activists having no rational basis. I suspect those countries feel much the same with respect to the chatter and so don't waste time taking part in it.

There that is tellin' yer, so I won't be naming it ?

[Lynx-lynx]

I'll drink to that (from a member of the chattering class )

[AnotherCat]

Originally Posted by Lynx-lynx

...(from a member of the chattering class )

You're not all bad eggs. As long as you just chat about the laundry, cooking and dishwashing that is. Oh, and fisher-wives are allowed to chat about their neighbours too .

Whoops, letting my tongue get away with me like that I must be about due to get another whipping from my wife to keep me in line .

[Lynx-lynx]

Originally Posted by AnotherCat

You're not all bad eggs. As long as you just chat about the laundry, cooking and dishwashing that is. Oh, and fisher-wives are allowed to chat about their neighbours too .

Whoops, letting my tongue get away with me like that I must be about due to get another whipping from my wife to keep me in line .

Some of us in the chattering classes have contributed to some worthwhile legislation changes, written legislative policies and seen positive societal changes as a result.

(Oh, and listening to the boys chatter as they stand around the b-b-que or at the pub is always so ummm .. 'endearing' )

[Andrew H.]

Originally Posted by murg

In Australia, we have Part IVA, which basically says that if you enter into a scheme with the sole purpose of avoiding tax, that scheme is illegal and can be declared void.

https://www.ato.gov.au/General/Gen/P...or-income-tax/

The US has a similar provision.

But it's complicated. Is the *sole* reason that Apple has a distribution center in Singapore to avoid taxes in Aus? Are there any business reasons why it might want to have a distribution center in Singapore?

If so, then tax avoidance isn't the "sole purpose" of setting up a distribution center in Singapore and that provision wouldn't apply to them.

[Rizla]

Originally Posted by HarryT

That is exactly why I said "If there's a legal loophole, the laws need to be changed".

Have you heard of lobbyists?

[Rizla]

Originally Posted by murg

Harry, you aren't creating international structures of companies to move the money around. Nor are you loaning money to yourself is multiple jurisdictions.

Well said.

[rcentros]

Originally Posted by HarryT

In this case, though, we appear to have a situation of a government accusing companies of exploiting loopholes in the laws of their own country. Laws that they themselves have made. And far from being an impartial enquiry, the title of this thread strongly suggests that the outcome has been pre-determined.

Exactly. They make these laws because corporations -- those who pay out big lobbying dollars -- want them to make these laws. When others (those who didn't "pay their dues," i.e. bribes) take advantage of these laws then suddenly it's a "loophole." That's complete hypocrisy. If there are loopholes in the law, close them. Problem solved. What's the point of an inquiry? It looks like a hypocritical attempt to keep the loopholes for the select while dunning the corporations for whom they weren't originally designed.

[Soldim]

Originally Posted by HarryT

If a company is breaking the law, the legal system is there to take action against them.

If a company is not breaking the law, but the government decides that what they are doing should be illegal, the government should introduce the appropriate legislation.

But unless or until such a change in the law is made, a company should not (IMHO) be "vilified" for conducting business legally.

The question is of course whether moral comes into play or not. I think the example of Switzerland has been used here are MR before.

Switzerland has great tax laws and loopholes for companies facilitating tax avoidance in other jurisdictions. Is it appropriate to question the morality of those companies saving money by using these laws?

Switzerland has laws allowing the downloading of all copyrighted materials. Is it appropriate to question the morality of those individuals saving money by using these laws?

[eschwartz]

Absolutely not. Remember -- even copyright is an unnatural contrivance solely for the sake of giving authors an incentive to write. There is no fundamental reason why an author is entitled to anything.

In either case, everything the individual/group does is totally legal and aboveboard.

[jehane]

Originally Posted by jackie_w

It's also frequently discussed on radio and TV in the UK. The British 'man-in-the-street' is usually outraged when asked to comment. Unfortunately I'm afraid fjtorres may be right

The UK is actually doing something about it. Australian legislators are considering something similar.

UK's Google Tax

Just a question for those who want to talk about legalities: If the Australian Government legislated to allow removal of DRM, and to abolish copyright, would you be fine with that? After all, it would then be perfectly legal in Australia to make as many copies of things as you like and freely distribute them. Legal is not the same as ethical. We put a lot of stock in the concept of fairness in Australia.

[murg]

Originally Posted by jehane

The UK is actually doing something about it. Australian legislators are considering something similar.

UK's Google Tax

Just a question for those who want to talk about legalities: If the Australian Government legislated to allow removal of DRM, and to abolish copyright, would you be fine with that? After all, it would then be perfectly legal in Australia to make as many copies of things as you like and freely distribute them. Legal is not the same as ethical. We put a lot of stock in the concept of fairness in Australia.

It would be perfectly ethical to distribute books that are out-of-copyright.

[jackie_w]

Originally Posted by jehane

The UK is actually doing something about it.

It certainly appears so. We have a General Election next month. It will be interesting to see how much of this "Diverted Profits Tax" has actually arrived in the UK Treasury coffers by the time the next GE is due in 5 years time.

[Lynx-lynx]

Here's the latest on this topic:

Australia and the United Kingdom will join forces to tackle profit shifting by multinational companies, in an effort to drive an international crackdown on the practice.

Treasurer Joe Hockey and UK chancellor George Osborne have announced the establishment of a joint working group during the G20 Finance Ministers meeting in Washington.

The task force will begin work after the British election next month and will develop methods to force companies to pay more tax in the countries in which they operate.

http://www.abc.net.au/news/2015-04-1...panies/6403712

Yep, until that election is out of the way, it's all chit chat, and then anything can happen according to who wins, by what majority and if they're still interested. But hey, at least the issue is being discussed at the top levels, and hopefully making the tax (thieves imo) nervous. (Yeah, I know there are a number of people here who will stand on their far right hind legs and yell and scream about that expression ..... stiff!)

[eschwartz]

Originally Posted by Lynx-lynx

(Yeah, I know there are a number of people here who will stand on their far right hind legs and yell and scream about that expression ..... stiff!)

For a minute there, it almost sounded as though you don't respect anyone else's opinions, but I know that can't be true.