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38% of Australia's biggest companies paid NO tax last year.

Discussion in 'Living Room' started by BigKahuna, 17th Dec, 2015.

  1. BigKahuna

    BigKahuna Well-Known Member

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    Last financial years 38 per cent of Australia's biggest companies paid no tax whatsoever. One of the reasons being that some of these companies made no money. One wonders how some of the biggest earning companies can make no money.
     
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  2. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    Losses from previous years carried forward? The articles just like to show the numbers that result in a good news story. Never let the truth get in the way of a good story!
     
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  3. wogitalia

    wogitalia Well-Known Member

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    Might want to fix that title to income tax because otherwise it's a complete fabrication, I'd bet everything I own that they paid GST and Payroll tax at an absolute minimum.

    I love the sensationalisation of this topic right now, great way to hide that the current government is doing just as poorly as the previous one at controlling expenditure so lets create a **** storm about revenue instead of actually doing what needs to be done because that would cost votes.

    I've said it elsewhere but as long as Australia has such an extortionate corporate tax rate companies with the ability to pay tax elsewhere instead of Australia will do everything to use it, it's just logical and good business practice, it's exactly what a shareholder would want their company to do.

    It also ignores the economic environment that those companies are operating in, anyone attached to the resources sector will have struggled massively, which is a significant portion of our biggest companies.

    Australia needs to fix it's tax system, something we've made zero effort to do for back to back governments now because it's going to take some genuine politicking to get it done.
     
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  4. House

    House Well-Known Member Premium Member

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    Thought it would be a higher % than that but one way they make 'no money' is playing the Shell Game with the taxman;

    "Multinationals often use a strategy called transfer pricing to move profits offshore. This is money which would usually be taxed in one country but they make up a reason to shift the money so it isn't taxed.

    One technique that has been used for a long time is based on a "logo fee": Say GiantCorp is running a business in Australia. They set up a shell company in the Cayman Islands and shift the ownership of the GiantCorp logo to that Cayman Islands company. GiantCorp AU Pty Ltd then pays GiantCorp Cayman a fee for the right to use the well-known GiantCorp logo in marketing the Australian business.

    The Australian business has made $1 million in profit on $5 million in revenue, but some time on June 30 GiantCorp AU pays the "logo fee" which some accountant somewhere decides should be $950,000. At the end of the financial year - close of business on June 30 - GiantCorp has made a final profit of just $50k. The tax liability (30%) is calculated on $50k so GiantCorp only pays $15k in tax rather than $300,000.

    On July 1, GiantCorp Cayman sends the money back to GiantCorp AU as a loan for "working capital to expand GiantCorp in Australia" i.e. business as usual."

    Some more interesting info on the subject





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  5. Xenia

    Xenia Adelaide Property Manager Business Member

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    Interesting - message here: Don't be small
     
  6. THX

    THX Well-Known Member

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    One wonders how people on a property forum do not understand the basics of a business.

    btw this thread has already been created.
     
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  7. THX

    THX Well-Known Member

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    No the message is; economic lefties will always be idiots who don't understand economics or business and business will always seek to minimise cost and maximise profit (the ONLY reason they exist). What they are doing is a) legal b) intelligent and c) the right thing to do for their stakeholders. If the government has a problem with this; change the law. Of course the government is not stupid, they understand the furore over so called tax avoidance is almost all hot air used as a smokescreen for the idiot public to cover up slower growth and lower revenue.
     
    Last edited: 18th Dec, 2015
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  8. D.T.

    D.T. Adelaide Property Manager Business Member

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    Always legally maximise your earnings and always legally minimise your expenses, taxes being one of many.
     
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  9. Ed Barton

    Ed Barton Well-Known Member

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    The customer pays GST, the company simply collects it. Please send me everything you own.
     
  10. wogitalia

    wogitalia Well-Known Member

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    You realise that those companies are also customers to their suppliers right? You also completely ignored payroll tax...

    Nice try though.
     
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  11. BigKahuna

    BigKahuna Well-Known Member

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    This article lists some of the top companies, their earnings and the amount of tax paid: ATO reveals how much tax Australia’s biggest public and international companies paid during 2013-14

    http://www.switzer.com.au/the-experts/janine-perrett/tax-avoiders-evaders-dodgers-just-dodgy/

    "Given the huge number that pay much less than the official rate, it does make you less sympathetic to the constant business lobbyists trying to get government to lower the corporate tax rate because they are paying too much. Poppycock.

    Some other interesting things to note.

    Of the top 1500 companies two thirds were foreign owned. Now I am a free trader and believe in globalisation, but its worth noting when only 500 or so are actually Australian and surprise surprise it is the Australian owned corporate giants who do all the heavy lifting.

    Again just remember that when bashing successful local banks and supermarkets that meet their responsibilities here - unlike some of their overseas owned counterparts."
     
    Last edited: 18th Dec, 2015
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  12. BigKahuna

    BigKahuna Well-Known Member

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    Thx for your kind words Thx:
    "Economic lefties will always be idiots who don't understand economics or business"

    In fact, I've run a business. It might surprise you that it was a successful one too.

    I'll wait while you find where I said that what these companies were doing was a. illegal and/or b. unintelligent.

    I'd like to respond to the rest of your 'argument' except that it doesn't make any sense.
     
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  13. THX

    THX Well-Known Member

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    Then how after running this business do you not understand that tax is collected on profit, not revenue?
     
    Last edited: 18th Dec, 2015
  14. BigKahuna

    BigKahuna Well-Known Member

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    Still waiting for you to show me where I said that the companies were either unintelligent or illegal.

    lol, anyone who believes that some of the biggest companies not paying tax are not 'profitable' are naïve in the extreme.
     
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  15. THX

    THX Well-Known Member

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    You say you've run a business but you keep expressing this opinion which shows complete ignorance of our tax system and of running a business.
     
    Last edited: 19th Dec, 2015
  16. Xenia

    Xenia Adelaide Property Manager Business Member

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    All big companies were once small companies who persisted enough to make it big.

    I admire them for that purpose.

    I'm not going to comment on tax 1 because I am not a tax advisor to know what they should be doing. 2 this is an internet forum and it won't make a difference anyway.
    3. I have my own business to run.

    I prefer to run a profitable small business where I have control than a larger one with less profit margin but more money in general. Large amounts of staff are difficult to manage, I've done it before, I had no control and had no idea how the profit was being distributed. I created a business so that other people can use it as job security while I take all the risk and I don't want to do that again.
     
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  17. DanW

    DanW Well-Known Member

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    At the end of the day the shareholders will pay income tax on the dividends, the employees will pay income tax on the salaries, the company will pay payroll tax and every other tax except tax on profit
     
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  18. geoffw

    geoffw Moderator Staff Member

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    But many of these offshore companies have very few employees or shareholders in Australia. Companies are making billions of dollars of sales to Australians, yet most benefit from taxes paid goes to other countries.
     
  19. BigKahuna

    BigKahuna Well-Known Member

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    Wow, Thx, all you've done is make ad hominem attacks. Not once have you responded to the issue. Instead, you choose to attack the person. Sad.
     
  20. THX

    THX Well-Known Member

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    What issue is that? and what position are you maintaining? The only issue I've seen you talk about is that these companies do make money (if that's even a position?). This position has been answered in kind by asking the question if you understand the difference between revenue and profit? your entire opinion thus far rests on you not understanding the difference and if you do understand, what is your argument exactly? Do you wish to elaborate?
     
    Last edited: 19th Dec, 2015