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Global brand giants in spotlight as tax rorts come under attack

Tax authorities are under pressure to work more closely together to crack down on tax avoidance, focusing on some of the world’s largest brands.

International fast-food chains such as Subway, McDonalds, Starbucks and Burger King avoid tax in the US and also in other jurisdictions, giving them a price advantage over domestic competition.

Authorities in Germany and Britain intend to push the G20 nations into an international agreement to make multinationals pay a “fair” amount of tax.

Google, Amazon, Apple, Cisco, Microsoft, PepsiCo and Pfizer are also in their sights.

In today’s print edition of the National Business Review, columnist Neville Bennett says the developments are worth attention by New Zealand authorities.

“Governments are in a dilemma: tighten up the laws and risk capital flight.

“The plight is real as many countries make tempting offers to attract new business because even if revenue promises turn to custard, which is often the case, capital investment at least increases employment and jobs."

Read more about the challenges of the avoidance scheme and boycott movements in Mr Bennett’s Economically Speaking column.

Comments and questions
9

The growth in international services industries is a real problem for tax revenue. Goods can still have GST added when imported, but how to do this for services?
Only way around this I can see is for govts to impose a high tax on imported services (protectionist) to encourage overseas companies to register an office locally to run the transactions, though which would have to pay local taxes.
I don't know that it would be a bad thing for google/amazon/etc to have to have a local office where all purchases made locally/shipped to New Zealand would have GST added.

New Zealand already has GST on imported services, but the threshold is particularly high ($60K).

Yeah, we can't have cheap goods for consumers and innovative firms increasing the quality of life for all of us: the above is the point of view of the Statist. http://lifebehindtheirondrape.blogspot.co.nz/2012/11/amazon-is-our-hero-not-villian-in-piece.html

This is the wisdom of free men channelling the ethic that made the West the best civilisation there's ever been (now over, of course. We are the barbarians who hollowed out the ethic and now dwell in the wastelands of what could have been.)

Where is this column? [Try it now – Editor]

Every link brings me back to this page ... losing the will to live.

[http://lifebehindtheirondrape.blogspot.co.nz/2012/11/amazon-is-our-hero-not-villian-in-piece.html – it works when we use this link. Have just tested it again. Puzzling... Editor]

Surely the oil companies have been tax avoiding for years. We have all been paying far too much for petroleum products as a result.

This will all end very badly. History shows us how fiat currencies end.

I know, I know, this time it's different...

All well and good for the major international brands, but how about Sanitarium who are clearly a brutal and bullying trading business being forced to pay their fair share?
Sanitarium dominates so many brands and hides behind several business names, no way I consider them just a church.

large corporates vs slow and stupid governments. I think I can see how this will end. Look at Vodafone in the UK and the blatant tax avoidance scams they've perpetrated over there. NZ has no economic clout as an export commodity driven price taker so expect the rorts to continue.