Taxenophobia

22 comments on “Taxenophobia ”

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1. ghostwhowalksnz 1

   20 August 2014 at 5:01 pm

   Milk NZ Holdings were only able to buy the former Crafar farms because the National government stepped in to require the taxpayers milk the cows for them.

   Thats right they worked out a deal for Landcorp to become sharemilkers on someone elses land. Its crazy and not why we have a SOE involved in agriculture. I know that some people have long term leases on landcorp farms and some sharemilkers are on landcorp dairy farms.
   But the other way around ???
2. hoom 2

   20 August 2014 at 5:03 pm

   In the beginnings of the USA the citizens had the issue of Taxation without Representation.

   The world currently has the reverse problem of Rich & Corporates who have excessive Representation and no Taxation.
   • Draco T Bastard 2.1

     20 August 2014 at 7:51 pm

     +111
3. ghostwhowalksnz 3

   20 August 2014 at 5:10 pm

   As an aside I thought we had strict ‘thin capitalization’ rules to knock out most of this borrowing the lot off shore

   Seems as though there is looholes
   http://taxpolicy.ird.govt.nz/publications/2013-commentary-arearm/thin-capitalisation-rules
4. alwyn 4

   20 August 2014 at 6:01 pm

   I notice that you did a fairly selective edit of the article.
   The main organisation he talks about was Wellington Network which Chalkie says was bought in 2008 when, guess who (hint starts with an L) were the Government. He also says that, under a National Government the IRD are going to tighten up on the rules.
   Yes the rules are wrong but at least the current Government plan to do something about it.
   • infused 4.1

     20 August 2014 at 6:35 pm

     Yeah, Labour flogged that one off… on the quiet too.
   • Draco T Bastard 4.2

     20 August 2014 at 7:56 pm

     The main organisation he talks about was Wellington Network which Chalkie says was bought in 2008 when, guess who (hint starts with an L) were the Government.

     And a lot of us were saying at the time that it should have come under the Strategic Assets legislation that the Labour led government had just passed.

     Yes the rules are wrong but at least the current Government plan to do something about it.

     So do the next government. Thing is, we’ve known about these tax loopholes for years and National haven’t actually done anything about them. Instead they’ve been passing laws that damage working peoples rights, engaging in beneficiary bashing and giving state subsidies to WB, Rio Tinto and SkyCity.

     And, yes, I’ll agree that a government can’t do everything at once but these should have been a priority in 2008 or earlier.
5. disturbed 5

   20 August 2014 at 6:09 pm

   Can we get someone to compile an up to date list of foreign companies take overs as this as Farrar “taxpayers Union” or Government has yet to do.

   List of foreign taxpayers rip-off”s of the N.Z. taxpayer.

   1/ Lochinvar Station. to Shanghai Pengxin Group”.
   2/ 49% sale of Mighty river power, ?
   3/ Crafer Farms, to Milk NZ Holdings – British Virgin Islands
   4/ Wellington Electricity Ltd – Cheung Kong Infrastructure Holdings
   5/ Genesis Energy, to ?
   6/ Meridian Energy, ?

   Add to anyone.
   • Gareth 5.1

     20 August 2014 at 7:41 pm

     ASB, ANZ, BNZ, National, Westpac
     • TheContrarian 5.1.1

       20 August 2014 at 7:58 pm

       Westpac has always been an Aussie bank and ASB was, from memory, never owned by the govt. Same goes with ANZ too actually – was never a govt owned banking outfit.
       • felix 5.1.1.1

         20 August 2014 at 8:01 pm

         I think the australian-owned westpac bought and subsumed the locally-owned trustbank, hence westpactrust.
         • TheContrarian 5.1.1.1.1

           20 August 2014 at 8:06 pm

           True they did (like ANZ acquiring National bank) but Westpac and ANZ were always foreign owned and ASB has never been publicly owned.

           All three, however, have consumed and assimilated NZ owned enterprises. Except for maybe ASB
           • Lanthanide 5.1.1.1.1.1

             20 August 2014 at 8:46 pm

             “but Westpac and ANZ were always foreign owned ”

             ANZ bought Postbank, which was government owned.
             • TheContrarian …

               20 August 2014 at 9:18 pm

               As per my second sentence.
   • disturbed 5.2

     20 August 2014 at 11:23 pm

     Updated any further?

     Can we get someone to compile an up to date list of foreign companies take overs as this as Farrar “taxpayers Union” or Government has yet to do.
     List of foreign taxpayers rip-off”s of the N.Z. taxpayer.

     1/ Lochinvar Station. to Shanghai Pengxin Group”.
     2/ 49% sale of Mighty river power, ?
     3/ Crafer Farms, to Milk NZ Holdings – British Virgin Islands
     4/ Wellington Electricity Ltd – Cheung Kong Infrastructure Holdings
     5/ Genesis Energy, to ?
     6/ Meridian Energy, ?
     7/BNZ
     8/Partial sale of Air NZ.
     9/Wairakei geothermal Power Station, to Contact/Origin Energy
     10/ Works Infrastructure ex (M.O.W). to Downer (Aust’)
6. mikesh 6

   20 August 2014 at 6:20 pm

   It’s about time interest was declared non deductible. It’s not really a business expense in any case.
7. Draco T Bastard 7

   20 August 2014 at 7:49 pm

   If that article is right, and I have no reason to doubt it, and Labour et al do close the tax loopholes (which I also have no reason to doubt) then you can start counting the time until foreign investors start running for the hills as their tax exempt status gets shut off.
8. ianmac 8

   20 August 2014 at 9:01 pm

   Who could ask if Cheung Kong Infrastructure Holdings paid any tax in NZ?
   Mr Key is very well informed and open and transparent.
9. Alistair Connor 9

   21 August 2014 at 12:30 am

   The important point is that the various “free trade” treaties NZ has signed, or is negotiating, make it obligatory that the country be open to foreign investment.

   This is sold with “level playing field” arguments. But the playing field will never be level between local companies and multinational firms — or perhaps we should call them “non-national firms”, because they might as well be domiciled on the moon if they escape all tax jurisdictions.

   The case of Wellington’s electricity distribution is a blatant example. The story of the 12% interest rate paid to a letterbox in the Virgin Islands cries out for a law change — it would surely be legitimate to tax at, say 50%, interest paid to related parties at above market rates?

   I am opposed to all further opening of trade — in particular, the Pacific treaty under negotiation — until such time as a satisfactory international tax treaty has been established (which is likely never…)
10. Rich 10

    21 August 2014 at 2:03 am

    They’re claiming profit of 58 million here;

    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&prev=/search%3Fq%3D%2522Milk%2BNew%2BZealand%2BInvestment%2522%2Bsite:cn%26biw%3D1164%26bih%3D669&rurl=translate.google.co.nz&sl=zh-CN&u=http://cfi.cn/p20140617001789.html&usg=ALkJrhh_z9YozFeiEAYjnKzoDeGRNxbegA
11. Rolf 11

    21 August 2014 at 12:21 pm

    This is a trick used all over the world now, not only concerning New Zeeland. The investor put his money in a bank in, for instance UAE. He takes a loan from a bank or financial institution in BVI or Singapore, the UAE bank balance is the security. The loan interest and cost from BVI or Singapore is set high, and pay for the other costs many times over. The cost of money, interest to the BVI or Singapore is of course deductible as a commercial expense, hence no or little tax in the end. All the high tax nations are exposed to this, the real investor may even live in the same country, in this case, he lives in New Zealand, but is hidden from view through the system. This way the costs are high, and he does not have to pay tax. The only remedy is to cut the tax.
12. Rich 12

    21 August 2014 at 3:36 pm

    Cutting the tax rate? That won’t do anything, quite obviously the preffered tax rate is 0%.

    But as someone said elsewhere cut the tax claim on interest, and you will defeat this. Sure it will get a few legitimate businesses a bit antsy at first but then if your gearing is reasonable, you will be able to handle it. Well run debt evasive companies and businesses will do well.

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