back to article Tech giants reject tax dodge name and shame plan

Australia's plan to name and shame technology companies that use various machinations to reduce the amount of tax they pay down under has been carpeted by the very companies that use such schemes. Condemnation of the plan has emerged from the Australian Information Industry Association (AIIA), Australia's peak technology …

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Bronze badge

They have a right to their opinion ...

There are some valid points in this, but I wonder whether much weight should be given to the submission, or whether it should be a case of 'no representation without taxation'.

It would be nice to see the government implement some form of provision to target companies that enter into arrangement with the sole purpose of avoiding tax.

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Re: They have a right to their opinion ...

It's every board's obligation to their shareholders to avoid as much tax as possible. The stupid government needs to fix the broken tax laws but that won't happen cause the pollies currently exploiting them would lose money...

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Re: They have a right to their opinion ...

So they're saying it's unfair for someone to scrape public information and publish a "league table" of "good corporate citizens" listing:

a) Company name

b) Company profit (global)

c) Declared company profit (local)

d) Company taxes paid (local)

Might make for an interesting website, particularly if it could also be made global with a "local country selector" drop-down.

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Re: They have a right to their opinion ...

>Might make for an interesting website,

Sounds like an addition to the duedil.com company 'group' view...

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Anonymous Coward

Re: They have a right to their opinion ...

No, it isn't: It's the board's obligation to act in the best interests of the company, this is often interpreted as maximizing profits, but many companies take the view that if they screw their customers that's not in the best interests of the company because it breeds resentment. In this case, avoiding levels of tax, generally speaking seen as fair, during a time of austerity almost certainly harms your company's image and therefore harms the bottom line. Many companies need loyal customers and I sure as hell won't be loyal to any of these (except for the one which pays me, but that's a different matter...)

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FAIL

Re: They have a right to their opinion ...

> In this case, avoiding levels of tax, generally speaking seen as fair, during a time of austerity almost certainly harms your company's image and therefore harms the bottom line.

So far, the only people seem to be really getting heated about this are the politicians trying to scrape up more tax from said populous and the media feeding from that frenzy (and of course the Daily Fail readers that get heated at the drop of a hat on practically anything that is current).

Of course, in times of austerity, we should be spending less and saving more. I wonder what said customers of these firms would think if all their prices went up to cover the extra tax taken from them? For those unfortunate to be unemployed, I would think that they would be mightily annoyed.

We seem to have different views on what austerity actually means.

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Anonymous Coward

Re: They have a right to their opinion ...

There has been a multi-MGO/charity campaign going on for a couple of years now about fair tax and the effects of massive multi-national companies avoiding tax on the poor and in particular on poor countries.

As for your comment about prices going up - should consumers pay less no matter what the cost? A cause close to my heart is that of dairy farmers. After the Milk Marketing Board was disbanded individual farmers had to compete to sell their product to the supermarkets individually, with no group bargaining. The supermarkets nailed their prices to the floor, the farmers had to put up or shut up, they have to sell their product but the supermarkets don't have to buy, there is always another supplier more desperate. This would be fine, but the supermarkets really want the UK consumer to buy UHT milk, which can come from basically anywhere in the world, the consumers don't want UHT though. So the supermarkets drive the prices of milk further and further down, below the cost of production and the suicide rate amongst dairy farmers shoots up. Once the consumer found out about this, they were willing to pay more for milk and you ended up with the disgusting situation where supermarkets offered "fairly priced" milk next to milk where the same farmers were screwed for it.

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So

Don't try and make us pay any tax, go herd cats while we continue to fill our pockets.

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Re: So

You made the rules so don't blame us cause you're still losing

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Alert

Re: So

You made the rules so don't blame us cause you're still losing

The existence of corporations is a privilege granted by the state. Corporate law should go back to the old system where charters are issued for limited times and companies have to show that it's in the public interest to renew them.

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Anonymous Coward

Re: So

No country makes the rules for another country.

Global rules are hard to define since one nation will always try to undercut another, this is called competition. The UK has been cutting corporation tax to encourage companies to come here.

So you can't say that the UK is at fault if Ireland for example decides to cut its tax rate below the UK. Google shouldn't shift profit to Ireland that wasn't "earned" there.

If I bought a Nexus-7 in the UK I would expect that the UK division would pay tax in the UK, not falsely claim the profit was earned in Ireland (where presumably there is a satellite office).

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Facepalm

Doesn't option one.,...

mean any financial journalist with a web page / blog / twitter account can summarise and publish the actual data? Who needs a committee for this?

The last company I worked for put their Tax contribution (Local and global) on page 2 of the annual powerpoint to employees, and actually said "this figure means we pay our share of taxes". And it's top 10 in the world. Correllation?

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Anonymous Coward

Here in NZ, any arrangement which does not have a clear purpose other than tax reduction, is a sham and is illegal.

It seems highly unlikely that these arrangements really are legal, if closely examined. Just that hitherto it hasn't been worth picking apart, especially as most of the liable players are off shore.

By keeping the financial transactions booked in tax havens like Singapore, they are deliberately making it difficult to prove the illegal actions in court. All critical documents such as emails etc that are germane to the conspiracy to commit tax crime are protected by the fairly draconian and uncooperative secrecy laws that Singapore and similar countries provide for their clients.

By analogy, drug kingpins can claim that what they do is legal, as long as critical evidence remains hidden.

This of course is not true.

All the Australian banks in NZ ran a multi billion dollar tax scam, that they also claimed was totally legal etc etc. In this case IRD got over $2B (thats about $1000 for every taxpayer in NZ)

http://www.interest.co.nz/news/50203/overseas-firms-offer-settle-retrospective-tax-avoidance-dispute-ird

http://www.nbr.co.nz/article/bnz-pay-ird-654-million-105685

Of course in this case IRD could get access to the documents.

Eventually it gets so outrageous and egregious that Inland Revenue sees there is enough money to be gained to make it worth trying to enforce the law.

Once you start avoiding more than $500M of tax, it becomes worthwhile to invest $50M on a 5 year long prosecution effort to collect it.

Tech companies have now reached that point:

IRD knows they are breaking the law. The Politicians know they are breaking the law. They are now building public opinion to support prosecutions which will be very expensive.

Go IRD.

Go Pollies! (did I just say that???)

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If you intend to read the report and avoid buying from the best tax avoiders, vote me down

I think the most common reason for reading the report will be companies trying to find the most effective tax avoider so they can copy a known good system. Most people won't bother to read a government report. Few would believe it was accurate anyway. Lets see if anyone claims they will make purchase decisions based on the government supplied tax avoidance data.

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Re: If you intend to read the report and avoid buying from the best tax avoiders, vote me down

I would, for one.

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This post has been deleted by its author

Megaphone

Law & Morality, never the twain shall meet

"There's no suggestion any of the companies mentioned above do or have ever done anything illegal on the tax front. The morality of their practices is for readers to decide."

The law is never moral. Tax laws are not moral either.

The law until recently made it illegal to be a homosexual. Was it moral then? No. So why is it moral now.

The law until recently taxed women as though they were part of their husband. Was it moral then. No. So why is it moral now.

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Anonymous Coward

Re: Law & Morality, never the twain shall meet

Indeed. Talk about getting off your tits at the weekend on "legal high" substances with your employer. I'm sure they will give you a pat on the back and say what a fine example of a human-being you are.

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withdraw from doing business in Australia

Because If England follow suit, they seem to be cutting themselves out of a very large market.

I know its their job to pay as little tax as possible, but outright lies (Google's sales being routed through Dublin, or Starbucks buying the rights to use their name from themselves in order to make a loss each year) should be stamped on.

Crap like, "we wont invest in your country" or "we will take our businesses elsewhere" is just that, crap. And threats should be slapped hard.

If these guys left the market, then there would be plenty of people to fill their places, coffee is coffee (not all search is that good, but if the competition had some of the revenue, then they may become as good over time)

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Pint

Re: withdraw from doing business in Australia

All to right "we wont invest in your country" or "we will take our businesses elsewhere" is total bull sh*t.

If the company is making revenue in the billions they couldn't afford to take their business else where, any CEO that did try would be dead faster than a lemming off a cliff.

Only solution is global corp tax 15% everywhere! problem solve.

I need a beer

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Anonymous Coward

You don't need a beer...

What you need my friend is English lessons.

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Anonymous Coward

Re: withdraw from doing business in Australia

"Crap like, "we won’t invest in your country" or "we will take our businesses elsewhere" is just that, crap. "

Agreed.

If you won't invest in our country, you won't be allowed to trade in our country! Since a large slice of your revenue is from our country, you lose! And, your competitors gain.

Our politicos have not got the balls to do it. But the reason nothing changes is because our politicos are large shareholders in these very same companies.

It's about time we banned our politico's from owning shares or having any ties with commerce. They are there to serve us not the corporates, though you would not think so.

But again, it will never happen because greed is human nature.

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Thumb Up

Re: withdraw from doing business in Australia

"It's about time we banned our politico's from owning shares or having any ties with commerce. "

I've been saying this for years. It should be constitutional law in every democracy: if you own shares in any company, you cannot stand for public office or be called to the bar (I also hold that for people who believe in religions as well, but that's another story). Sell your shares first (publicly at market value, NOT to family members etc either!), then you can stand for election or be appointed to the judiciary.

The blatant conflict of interest in being a member of the legislature or judiciary and owning shares in companies is so obvious, the fact that it's legal at all should be considered evidence of egregious corruption.

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This post has been deleted by its author

I know the post is old but

"The blatant conflict of interest in being a member of the legislature or judiciary and owning shares in companies is so obvious, the fact that it's legal at all should be considered evidence of egregious corruption."

This line really strikes home

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