In recent weeks the world has been shocked to find out
that rich people don't like paying tax.
A tsunami sized leak from Panamanian law firm
'Mossack Fonseca'
Gave us all a tiny insight into the secretive dealings of
Dictators, Downing Street residents, and douche-bags
And while the Panama Papers are significant, iIt's worth noting that
a) Panama is just one of around 50 tax havens used worldwide,
Two, we've only seen a small fraction of the information released so far
and fourthly, the information is being controlled by
The International Consortium of Investigative Journalists
Which is funded by a veritable line-up of some of the
wealthiest individuals in human history
Including the Rockefellers, George Soros and The Kellogg's
And while everyone is busy expressing outrage over criminal avoidance of tax,
here at The Undercurrent we're way more pissed off
about the legal and more or less out in the open ways
that multinational corporations avoid paying tax
in the countries from which they generate staggering profits.
So in the interests of a level playing field, we humbly present to you
The Undercurrent Guide to Legal Tax Evasion
Now we realise the topic of taxation is almost as boring
as a Coldplay Superbowl performance
So we thought it would help to put a human face on the issue
We've enlisted the services of a local start-up company
helmed by our good friend Liam.
Liam's been enjoying a recent surge in revenue
supplying artisanal confetti to hipster weddings
But he feels like giving away 35% of his profits to the government isn't funny
Not even, like, ironically funny
So let's see if we can do something to get that rate closer to 0%
Our first technique we'll call Offshore Registration.
Let's just say Scissor and Page are based over in the US
where companies pay 35% tax on profits.
Now in the US you pay tax where your company is registered
While over in Ireland you pay tax on where your company is physically based
at only 12.5%
So we'll keep Liam's headquarters in the US
But shift his company registration over to Ireland.
It sounds tricky, but it's just a bit of paperwork
And we know Liam loooooves paper.
So with that simple bit of admin we've saved you 22.5% in tax
using Offshore Registration.
But we're just getting started.
Time to level up with a technique called Transfer Pricing
Now Liam's planning for success and he'll be expecting
to ship hand-filled mason jars of paper shrapnel
all over the world to countries like Australia.
But how much would it suck if he had to pay
The 30% company tax that Australia expects
Easy fix.
Let's set you up a subsidiary in Singapore
where you only pay 2.5% tax on profits
Liam's Singapore arm sells his products to his Australian subsidiary
at a price very close to what the customer will pay in store
That means that all the profits accumulate
in Singapore at just 2.5%, instead of back in Australia at 30%
So now you're legally holding on to 97.5%
of those sweet, sweet profits, using a technique called
Transfer Pricing
Which if anyone else did it would be called
Money Laundering
But we can do better. It's time for a tax haven.
And Panama's not your only option.
There are tons of killer spots with flaccid taxation laws
waiting to receive your profits.
Like Luxembourg where you can literally tell the Government
How much tax you'd like to pay
Now thanks to the leaks at Mossack Fonseca
We know that tax havens exist but how are they used?
Well with a Holding Company in Luxembourg
You can do all kinds of fun things
Like sell your own ideas back to yourself
Or, my favourite, the ultimate corporate circle jerk
Debt Loading
Your Luxembourg Holding Company can loan money to all your subsidiaries
Like Australia, and they pay the money back at huge interest rates
and this achieves two things It shifts all your profits in the form of
interest payments back to Luxembourg, who deem them to be 100% tax free
and it cooks the books at your Australian subsidiary
reducing their profits down to zero or even below.
So once again that's a technique known as
Debt Loading
which is basically Loan Sharking,
within a human centipede.
Now let's not forget these techniques aren't limited
to artisanal desiccated paper companies.
Let's look at a few real world examples.
Let's start with Google, upon who's website
most of you are probably watching this video right now.
In 2014 in Australia they generated $2bn of advertising revenue
on which they paid $5m tax.
In Singapore.
And Facebook, upon who's page the rest of you are probably watching this video
In 2014 the UK Government paid Facebook more money to run ads that encouraged
people to pay tax, than Facebook paid in tax themselves
But no one embodies selfish, evasive tax policy better than Apple
In 2015 in Australia they booked $8bn in revenue
That's a lot of money for a company that sells a phone with a battery
that doesn't even last a single day, whilst abandoning the creative community that
kept them solvent during the 90s. And God forbid they should ever access their
gigantic cash reserves to hire enough software engineers
to properly BETA TEST THEIR SOFTWARE SO THAT WHEN YOU DO A SOFTWARE UPDATE
YOU DON'T RISK DESTABIL...&#*!(&$
*apple start-up chime*
And how much tax did Apple pay on that $8bn of revenue?
$85m. Which represents 1%
A recent report showed that 76 of the top 100 Australian companies
pay a lower tax rate than a nurse.
And the other 24 companies weren't model citizens either
They're just better at using The Loan Sharking Centipede
to magically turn their profits into a loss
Lost tax revenue on the profits that we know about amounted to $5.36bn
Which would be enough to reverse all the recent funding cuts to
Aged care, Medicare, Indigenous services,
our two public broadcasters, national rental housing affordability
and the main body tackling climate change in Australia, the CSIRO
With $2.5bn left over.
But thanks to pansy-ass governments all over the world
public corporations are able to shift the tax burden onto private citizens
You know what I'm over this shit.
We make these funny little videos
and you know, they're a little bit of fun, and we tell some fart jokes
and pillory some politicians, but at the end of the day
do you think we really make a difference?
Probably not.
So why do we see if we can.
#iPhone7Boycott
Because you know there's another one coming out soon,
and you know it's only going to be a small,
incremental improvement on a product that was once revolutionary,
and you know you don't really need it.
And since our governments are too gutless and conflicted
to hold these hoarding, Ayn-Rand-reading douche-canoes
to account, maybe it's up to all of us.
So when Tim Cook offers us the iPhone 7,
let's all send him a message on our iPhone 6's,
iPhone 6s', iPhone 6+'s and iPhone 6s+'s
Dear Tim, you'll get our money, when we get yours.
Tell your friends