We just need to be creative like the Google accountants.

Yes, what a stroke of genius it was for them to not base themselves in New Zealand.

However unfair, unworkable and stupid the solution is it doesn’t matter as long as their money is making its way to IRD.

You disgust me.

Why should a FOREIGN company conducting business in a FOREIGN country and providing a service GLOBALLY have to pay NZ tax, just because their customer is a NEW ZEALAND tax resident?

Not only that, a company gets taxed on their profits AFTER costs. That means if Google loses money in one division, that offsets the profits in another and they dont pay as much in tax. Do they assign NZ a share of the losses? From every division and every business unit?

Unfair, unworkable, unbelievably stupid.

Once in whatever tax haven at ~2%.

Then again on NZ targeted ads and services. They can get a 2% discount on our company rate.

I wonder if Microsoft will get away with not paying tax on Office 365 subscriptions when they have the data center here next year.

Eg require that they provide earnings and profit data for the business they do with people in NZ to some standard that we mandate, and if they won’t cooperate or appear to be indulging in avoidance-motivated accounting sleight of hand then hit them with penalties or cut off their access to our markets.

So just like that genius above, you propose the IRD stop New Zealanders from purchasing overseas services, because the profit earned in a different country by non-NZ firms on those services isnt taxed by New Zealand?

That’s about as stupid as it gets.

Lets say Google pays all their tax in the US. I am sure the IRS would be more than happy to forego the tax rightly owed to them on the profits earned by one of their tax residents. Yeah, that sounds like something they would do.

Or maybe you are suggesting anyone that does business with New Zealanders should pay tax on the same profit twice?

Or maybe only those companies that arent paying as much tax as you tools think they should be paying. That seems to be the real issue.

Maybe I’ll hold on for a couple more days.

Does the ardent kiwiblogger ever wonder why The Labour Party feature as one of the top rating tags in the main tag bar on the front page?

Alongside Phil Goff and DPF as other top 10 rackers?

Twice as many tags for Labour as there are for National. Nearly three times as many as for John Key.

As someone else said in one of the other posts, DPF’s posts get more and more partisan every day, and I’m finding them increasing boring.

I’ll give it another couple of days, I think and then I’ll try to find something less opinionated and perhaps having a little more substance.

Boring.

All of these companies want access to customers in NZ, so make that access conditional on paying tax locally at our legislated rates. There are innumerable ways to track their behaviour and hit them where it hurts if they won’t comply. IRD is not shy of using the threat of colossal and unjustifiable demands to force compliance.

Eg require that they provide earnings and profit data for the business they do with people in NZ to some standard that we mandate, and if they won’t cooperate or appear to be indulging in avoidance-motivated accounting sleight of hand then hit them with penalties or cut off their access to our markets.

like this (many in Europe are already experimenting)

It is called a financial transaction tax. A tax which has been discussed forever, is bloody effeicient, can replace almost all other taxes. a tax that is tiny and is easy to implement in a way that covers everyeffort to eveade.

GST came close but has too many exceptions and loopholes.

We will have to do it sooner or later. In my view sooner makes much more sense.

I’m sure if the government forced ISPs to block google ad servers they would quickly cough up some more cash.

HAHAHHAHAHAAHAAAaaaaaaaaaaaaaaaaaaaaaaaaaa fuck off.

Google would block NZ IPs and never look back.

The government that took Google away from the public wouldnt survive to the next election.

Bizarre.

[A service offered by a foreign company and delivered in a foreign country, but ordered and paid for by a New Zealander.]

What ever next, will Labour be moaning about Amazon, and Starbucks not paying their “fair share” in taxes?

In fact, I’d assume the invoices they issue to NZ companies have a GST component

And you would assume wrong. When you buy advertising from Facebook, you are invoiced by Facebook Ireland. So it’s an export order and there’s no GST (or similar tax) added on top.

Just the same as for a website I own that has thousands of Australian visitors per month and I make $$ charging Australian companies for advertising on it. It’s an export order to Australia so I don’t charge them GST. Nor do I pay tax to the Australian government for that income.

Ditto for another of my websites which gets about 20k visitors per day, and I make money from predominantly north American companies: no GST and no tax paid to the US govt.

Then, all the worlds internet companies will setup ghost headquarters here and route their profits through us.

Pretty much we can wipe out our deficit at the expense of other countries tax bases.

I thought there were already laws against transfer pricing and stuff like that.

Certainly Ireland appears to be benefiting by raking in tax money on world wide sales for doing pretty much nothing.

Second, yes FB has a local subsidiary. And that subsidiary would be a tax resident. I don’t know what the arrangement is for sales, but no-one (not even David Clark, who clearly has very poor knowledge of even basic tax issues) is suggesting they are avoiding or even evading tax, which means there is no issue with the local subsidiary.

What you are talking about is NZ unilaterally re-writing international tax treaties so NZ (somehow) taxes non-residents just because there is a local registered subsidiary, or some other criteria you might dream up. Besides the impossibility of doing so, guess what would happen to the local subsidiary? It would be shut down. And then what? Would the Govt ban NZ businesses from advertising on FB?

http://www.business.govt.nz/companies/app/ui/pages/companies/3043328/17264069/entityFilingRequirement?backurl=%2Fcompanies%2Fapp%2Fui%2Fpages%2Fcompanies%2F3043328%2Fdocuments%3Fbackurl%3D%252Fcompanies%252Fapp%252Fui%252Fpages%252Fcompanies%252Fsearch%253Fmode%253Dstandard%2526type%253Dentities%2526q%253Dfacebook

It is of course also responsible for NRWT on any transaction with any non-resident (which given those accounts is probably the tax paid that Labour complains about).