The *real* reason for trade deals? (5 Feb, 2018)

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The *real* reason for trade deals? (5 Feb, 2018)

Postby aardvark_admin » Mon Feb 05, 2018 8:03 am

This column is archived at: https://aardvark.co.nz/daily/2018/0205.shtml

If this Amazon Tax thing really works, won't other countries follow suit?

Could it be that there's been a whole lot of "behind the scenes" discussions and that agreements like the reformed TPP more about ensuring that tax regulations can be enforced across borders than freeing up markets?

How will small to medium-sized online retailers cope if they have to become unpaid tax collectors for a dozen or more foreign countries' tax authorities under such agreements?

Instead of trying to force such incredible complexity and compliance cost on businesses, might we not be better to consider a complete overhaul of taxation so as to remove the need for such taxes in the first place?

And why does our government remain so focused on taxing good, honest Kiwi workers rather than taxing the NZ profits of overseas corporations?
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby latewings » Mon Feb 05, 2018 8:29 am

So I buy wingnut widget for USD60 and pay USD66 plus whatever postage. Widget is broken and must be returned. Does anyone with a functioning brain cell believe the tax on that sale is going to be returned easlly once the IRD have their claws on it? Let alone how much is returned once fluctuations in exchange rates are considered.

It really is a broken concept and once again the real task of getting Multinational Corporates to pay local tax on local earnings before repatriating profit goes nowhere.

Edit: The Suff article last week (https://www.stuff.co.nz/business/101038176/bank-pulls-support-for-cryptocurrency-platform-cryptopia) has interesting timing as it strikes me one way to circumvent an Amazon tax would be to pay in locally purchased crypto currencies that, obviously, do not associate with any country or it's taxation regime. Is this a well timed move by legislators using the blanket 'Anti Money Laundering' legislation to detect taxable transactions?
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby phill » Mon Feb 05, 2018 9:30 am

small business owners panicking and betting their life that adding gst to all imports will save their businesses
these are the same people we worry about having to do free paper work for foreign governments
foot shooting at best

also the dipsticks in national still havnt woken up to the fact they are no longer in power
and still believe they are the only ones that know what to do

our government looking to caste a wide net .. unfortunately getting the mesh size below 10 meters seems a problem
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby granada29 » Mon Feb 05, 2018 11:06 am

Although Apple appear to be avoiding tax in NZ, my understanding is that the tax is actually being paid in Australia.

Apple goods sold here are sourced from Australia and retailed in NZ at a fixed margin above what the local supplier has paid Apple (Aus). Normal tax *is* paid in NZ on any profit derived from that margin. Apple (Aus) on the other hand are sourcing their goods at a much lower price and are the ones making the profit - in Australia. I don't see why Apple should be taxed in both countries. Of course if Apple (NZ) were actually importing the goods at cost + shipping and the full profits were being made here, then that's a different scenario.

Its too easy to slam these big companies when they are actually working within established tax treaties. Maybe Amazon, Google, Facebook etc have similar structures - I don't know.
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby hagfish » Mon Feb 05, 2018 12:36 pm

'Trade' deals are often less about trade, and more about consolidating power for the Few. A small erosion of our sovereignty, in exchange for a few magic beans.

If this tax system were run using green-visored accounts clerks, completing triplicate carbon-paper receipts, licking their pencils between each tortuous transaction, it could be quite complex to administer. These days we have computers. Once UnionPay takes over global payments, it will all be very simple. All it will take is a few more 'trade' deals..
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby phill » Mon Feb 05, 2018 12:41 pm

i think what happens is
they import goods from their own sites located in a tax haven at retail less a few percent
they then pay tax on the local profit

for example
tax haven site pays 4 dollars for it and sells it to local site for 100 dollars and local site retails it for 110 plus gst
they then pay the gst and the tax on the 10 dollar profit less expenses
but the 96 dollar profit less freight for the tax haven site is untaxed

ohh yes and they are only here for our own good as the local site has been known to lose money .. and hence get tax credits
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby aardvark_admin » Mon Feb 05, 2018 2:15 pm

Yes, the likes of Google, Facebook, Apple etc are all (apparently) operating within NZ's Tax laws, hence they aren't being prosecuted.

These corporations have simply structured their affairs so as to minimise tax liabilities in NZ.

Apparently that's quite legal -- but only if you're a huge multinational corporation perhaps.

By that I mean that regular hard-working NZers aren't afforded the same freedoms:

Time running out for 'Penny & Hooper' tax dodgers

Yes, it seems that multinational corporations can structure their affairs so as to minimise tax liabilities with impunity but Kiwi taxpayers are to be prosecuted for doing exactly the same.

Fair -- or an incredibly strong indication that something is very, very wrong!
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby Muscular Jam » Tue Feb 06, 2018 12:51 pm

I thought you might be interested in this email from https://itsourfuture.org.nz/


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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby Perry » Tue Feb 06, 2018 1:50 pm

aardvark_admin wrote:By that I mean that regular hard-working NZers aren't afforded the same freedoms:

Time running out for 'Penny & Hooper' tax dodgers

The Supreme Court sided with IRD in its judgement that "income derived from personal exertion should belong in its appropriate taxation band and should not be inappropriately diverted away".

What's inappropriate? Who defines it?

The critical bit of the judgement is missing from that story.
. . . a critical analysis of the Supreme Court’s approach to reconciling the use of specific statutory provisions in the Income Tax Act 2007 with the general anti-avoidance provision (“GAAR”). 1 This approach is known as the “parliamentary contemplation” test, which was subsequently applied by the Supreme Court in Penny and Hooper v Commissioner of Inland Revenue.

Then comes this:
Most people express amusement at the prospect of trying to work out Parliament's purpose in respect of particular tax provisions, which is now part of the test for avoidance.

The issue of tax avoidance has occupied a large proportion of the both Inland Revenue and the courts’ time in recent years. Trombitas notes that tax avoidance can only be found to exist under the GAAR “when the statute is held to mean something other than what it actually says,” so it can be difficult to determine whether Parliament intended the GAAR to apply in a particular scenario.

That put business taxpayers in the position of trying to guess what was (in the tiny contractile vacuole minds of and) intended by the parliamentarians when they enacted the legislation.
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Re: The *real* reason for trade deals? (5 Feb, 2018)

Postby phill » Tue Feb 06, 2018 2:08 pm

Perry wrote:That put business taxpayers in the position of trying to guess what was (in the tiny contractile vacuole minds of and) intended by the parliamentarians when they enacted the legislation.


no it didnt
it put business tax payers in the position of ... working out ...

does this end the legal tax avoidance we have been using ?

if so
then

what can we use for the next one ?
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