We chat and Income for milk powder/ vitamins - tax?

I am curious as to whether there has been a crackdown on income from milk powder and vitamins. For those who don't know there is a huge economy of selling vitamins (i.e buy from chemist warehouse and send to china) and then using a cheap shipping company to ship overseas.

Same for Milk Powder - bought in high quantity and shipped overseas at local shipping stores (chinese) for around $5 a kg.

All payments are made through wechatpay1.

So this has been going on for years and no one is declaring the income, anyone know if the ATO has cracked down on this?


This is why you see the lines of chinese around the chemists and supermarkets - this is why.

Supposedly there is a crackdown on "cash" economy - i'd say there is millions in this economy.

Anyone in the know?

Cheers Ivan

 

I'd like to see a crack down.
So frustrating when trying to buy milk powder but none is available.
The supermarket chains need to do something about it. At least stockpile a portion behind the counter for parents who actually need it for their infants.

 

Probably not

 

The overseas student will buy products locally with cash/credit, and when they receive payment on wechat pay, the money stays inside China, and won't be taxed. And it can be linked to anyone's card.

Will be hard for ATO to know and tax accordingly.

 

Would it be taxed in china?

 

The ATO can audit the shipping stores - they must provide the details of the order there and provide all chinese passport details and what is in the order, simple trace back there. Add products such as ugg boots to the equation.

It really ****** me off that nothing is bring done. Those who know me - are aware my wife is Chinese - and i'd divorce her if she done this.

I had a girl who recently left my firm as she was making more from this than I paid her (a healthy accountants salary).

Cheers Ivan

 

Not that I am aware of.

 

The stores should really implement some kind of card scanning to enforce the 2 can limit.
Swipe your drivers license or medicare card, or something.
We have to do it for cough medicine, so why not baby formula?

 

Not that I understand the process completely but our dairy farmers are apparently not doing to well. What is preventing them from selling directly to this "market" (obviously our farmers wouldn't sell direct as it needs to be processed)

Is it because it is a "black market"? is it the lack of "additives".

As for tax avoidance, some people are prepared to accept the risk.

 

Just asked a team member who is Chinese, no tax return in China only here and the wechat money is not picked up over there. So its not taxed - what the hell is the gov't doing about this? any research on this segment? bloody hell I used to work at Deloitte, maybe Deloitte Economics should get onto this.

Imagine how big this economy is.

I'm scratching my head

Cheers Ivan

 

I had a person approach me who was quizzed by the ATO. ABN ? No. GST charged ? No but its not GST free either under the 60day export rule which requires one of two key events tie the sale to Australia. eg

Exported goods are GST-free if they are exported from Australia within 60 days of the first of the following two events:

• the supplier receives any payment for the goods
• the supplier issues an invoice for the goods.

Review seemed to be about turnover which they organised. They argued all the payments to others was an expense. All in cash which is a problem and probably not explained by bank transactions so that could be a money laundering offence. Offshore accounts. Records not in english. None of it looked great. I declined to act as they didnt think before speaking and made admissions so they need a lawyer. Another agency was also involved. I referred that person to a tax lawyer since I expect they will need them.

The ATO seem to be able to identify the parties from shipping records. They pinged one major exporter as source for high volume stolen product recently so matching is happening. I suspect a few people will face more enquiries or suddenly find they are pulled aside if they attempt to fly out of Australia. Easiest way to address it is tax compliance. GST 10%, undeclared GST = 20%. Tax + penalties +Interest. Payments to others all denied and in cash too.

Retailers likely providing payment details to the ATO and its not hard to match IDs....My daughter says they always ensure a flybuys / reward card is used. They make a big fuss about that. So paying in cash or card wont matter as buyers can be tracked.

 

Stressed out parents forced to hunt down last remaining tins of allergy baby formula

News like this makes me feel sick.
As my little girl are also on a type of allergy formula, I can feel his pain.
It's just not right, put the financials aside for a moment

 

we are offering between $80k to $100k for new accountants in our firm and are recruiting for 3 at present. must be quite a healthy business the powdered milk business

 

I think you must be overpaying your staff....you're talking grads? if yes i'll sell redwood and go work for you

 

hahha senior accountants...if you find some send them our way...we pay very well

 

What do you mean by 'new' accountants? Newly qualified? Or new to your firm?

 

new for our firm....yes not grads we would have an influx then

 

Unfortunately the poor dairy farmers are only at the beginning of the supply chain. The products we are referring to are the ‘value added’ infant formulas rather than straight milk powder.

 

I heard the big retail chains here are stocking up in the back room and sell them to overseas for a nice premium, while only display limited stock in store, and using these poor ppl who purchasing in the stores as scapegoats. always 2 sides of a story I guess.

 

Apparently shop assistants have been abused and even spat on by people purchasing in stores:

China's thirst for baby formula creating problems for Australian shoppers and staff