TaxBlog

Following our post the other day about Michael Hill moving to Australia to dodge tax comes this article in the Herald where the IRD are saying that the Tax system is under pressure from rich avoiding tax.

There are some interesting lines from the article:

“There is ample evidence that people are using different entities to structure their affairs in ways which reduce their tax liabilities.”

This to me is common sense. If you can minimise your tax by legal means then you would be a fool not to. We’ve had that discussion many times before on this blog. It’s also interesting to note that the IRD were not saying in the above quote that they were concerned that taxpayers were using illegal means to minimise their tax, simply that they were minimising their tax.

The report goes on to say:

“It can create a mentality that rather than tax being something which is paid for by all, tax is something for the smart, the able and the well advised to avoid. Over time, this can erode confidence that the tax system is fair.”

This has long been a view held by all salary and wage earners (that self employed people get a better deal). However many a salaried person chases their dream of owning their own business only to have it shattered upon the rocks of IRD compliance and red tape.

You could sum up the IRD’s view by saying that he who has the best advisors wins. Well put I say.

Bookmark to:
          

The Govenor of New York has today proposed an “ipod Tax”

The ipod tax would tax the sale of downloaded music and other “digitally delivered entertainment services” by 4 per cent.

The article goes on to say that:

There also would be higher taxes on gas, taxi rides, cable and satellite TV service, cigars, beer, movie and sports tickets, and health spa visits, to name a few items.

Paterson seems to be fighting both obesity and budget deficits with a proposal for an 18 per cent tax on soda and other sugary drinks containing less than 70 per cent real fruit juice.

An ipod tax… That’s something to think about.

Bookmark to:
          

Michael Hill International today announced that they would be moving their operations to Australia to save tax.

The restructuring “will materially and positively affect the after-tax profits and cash flow of the group,” chairman Michael Hill said in a statement. “This fundamental shift in functions has also required the Group to review its existing international transfer pricing arrangements which are in place for taxation purposes.”

It looks like there is nothing that the NZ revenue authorities can do to stop other NZ companies from following suit.

Bookmark to: