SoylentNews is people
SoylentNews
from the accountants-legally-accounting dept.
The Australian Taxation Office (ATO) has warned that the nation's attempts at imposing a "Google Tax" are already being circumvented, and suggested big accountancy firms have found a way around efforts to stymie multinational tax avoidance.
Australia's Google Tax, formally known as the Multinational Anti-Avoidance Law (MAAL), is modelled on the UK's and imposes penalties on companies that move money offshore for the sole purpose of legally-but-cynically avoiding tax.
[...] Indeed the Office says it's just found a new [technique] it considers "artificial and contrived," as it "involves interposing an entity described as a partnership between the foreign entity originally making supplies to Australian customers, and the Australian customers."
"The partnership has one resident corporate partner with a minority interest in the partnership, therefore purporting to characterise the partnership as an 'Australian entity' for the purposes of the MAAL." But nothing changes in the business' actual operations, and the ATO says: "The arrangements have little, if any, commercial basis."
(Score: 1) by toddestan on Saturday September 17 2016, @04:07PM
Not necessarily, those costs could also come out of their profits. Most likely, it would be a mix of the two, unless demand is truly inelastic (say, you sell EpiPens). On the other hand, it's unlikely Apple is going to raise prices to pay off the EU's tax bill - that money will just come out of their profits.
Since those profits mainly go into the bank accounts of the wealthy, lowing corporate taxes really would only serve to make the rich even richer. Or put it another way, if suddenly the corporate tax rate became zero, would you really expect goods and services to become cheaper, or would they leave prices the same and pocket the difference?
I do agree you make some other good points. Financial shell games are a difficult problem, as the tools used to play those games have perfectly legit and valid uses. I don't think eliminating corporate tax is solution.