Depe
Sorry, bit behind on this one - busy day, but
What's the rationale (and correct me if I'm wrong) for a multinational to shut up shop altogether in Australia over potentially giving up 25% of their profits? Are you saying that the Australian employees benefit from the positions that these companies provide with these non-taxed profits? I was under the impression that it gets sent to the Cayman Islands and that's the last we see of it. )I'd imagine it's a lot more complex, with re-investment of those CI funds, etc.)
The rarionale is that sometimes 25% is billions of dollars. Why pay it if you don't have to?
australians on a whole benefit from these companies employing them because those employees have jobs, taxes are paid from their salaries, and in the case of some companies like google, provide a platform to australians to join these companies without risking leaving the comfort of australia. We want them here because of the potential they represent to our country
as to whether its worth doing so (shutting up shop) ultimately depeds on the corporate structure, type of goods/services the business operates and how profits are accounted.
An extreme and easy example would be Google, which pays little to no tax here. Google employs several hundered australian employees. If we're cunty enough to Google and force them to pay 25% of their profits in taxes they are able to currently legally evade through various loopholes, Google could easily move its Australian operations elsewhere more favourable to them. Other companies would be likley caUght up in any changes affecting Google type structures/strategies and the problem compounds.
Those several hundred PAYG Google employees become unemployed (as with any other impacted companies employees if they choose to leave). This Ends up with an influx of highly skilled unemployed people competing for jobs that probably don't exist anymore at the scale they did. Many will require govt support in some form and some wil follow technology companies out of Australia. Net effect we get sweet fuck all or or worst case, net loss to where we were before the changes.
As somone pointed out, the tax system is a complex beast. It's not simple to solve and we are just balancing various loopholes against each other.