Pyrmonter: … and again.

It’s that time of the year. As professional offices around the country launch into the networking frenzy (and HR disasters) of the festival season, out comes the ATO’s report on corporate income tax payment.

This year’s reporting in the ABC is an improvement on Emma Alberici’s efforts of the past. But still. What purpose, beyond playing to the peanut gallery of its own tribe, is served by linking the use of past tax losses (that is, excesses of lawful deductions accumulated in the past) with issues of tax evasion? Pyrmonter is not so naïve as to assume that all corporate taxpayers voluntarily pay every cent of tax for which they are liable; in fact, in his professional practice area, he thinks standards of what was once termed ‘commercial morality’ have tended to decline over the past two decades, more or less in proportion to the rise in Corportate Social Responsibility and ‘Woke’ culture. But still:

  1.  Corporate Income Tax is essentially a withholding tax; and
  2.  The use of accumulated tax losses is a designed feature the tax system, and not an abuse.
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8 Responses to Pyrmonter: … and again.

  1. mareeS

    I ran the books for our businesses, and got away with everything I could, legally under avoidance rather than evasion, as I subscribed to Kerry Packers’s view: you aren’t spending it well enough that I want to pay more.

  2. legally under avoidance rather than evasion

    Yes but we live in the land of Oz and we are ruled by evil wizards:

    ————————–

    SILLINESS OF THE GST LAW:

    http://www7.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/antsasta1999402/s165.55.html

    A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 – SECT 165.55 Commissioner may disregard scheme in making declarations
    A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 – SECT 165.55
    Commissioner may disregard scheme in making declarations

    For the purposes of making a declaration under this Subdivision, the Commissioner may:

    (a) treat a particular event that actually happened as not having happened; and

    (b) treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as:

    (i) having happened at a particular time; and

    (ii) having involved particular action by a particular entity; and

    (c) treat a particular event that actually happened as:

    (i) having happened at a time different from the time it actually happened; or

    (ii) having involved particular action by a particular entity (whether or not the event actually involved any action by that entity).

    ________________________

    …yet MORE silliness, from caselaw on income tax assessment:

    *** The case goes back to taxes allegedly owed from the 1997/98 tax year…from a solicitor who owed a maximum of 130k including fines.

    Hart v Commissioner of Taxation [2018] FCAFC 61 at 83.

    Subsequently, in RCI, the Full Court made it abundantly clear that a taxpayer does not discharge its onus for the purposes of s 177C by demonstrating that the Commissioner’s counterfactual is not reasonable.

    THIS IS ACTUALLY NOW LAW IN AUSTRALIA. We are ruled by people who think they are wizards and literally legislate from the capital or the bench that they don’t need to be reasonable.

    ——–

    Tell me again we don’t live in a Kafkaesque clown world and that doesn’t deserve accelerationist collapsitarianism.

  3. Spurgeon Monkfish III

    For the purposes of making a declaration under this Subdivision, the Commissioner may:

    (a) treat a particular event that actually happened as not having happened; and

    (b) treat a particular event that did not actually happen as having happened

    I’m not sure who I’d summarily execute first – the unflushable bureaucratic turd who wrote the above or the monumental imbecile(s) who approved it.

  4. I’d tie them up together, dip them in Lucite and then lower the pair into molten gold.

    Poetic justice, Ivan IV style.*

    *J/k, no sedition here, I affirm my loyalty our glorious people’s Kafkaesque clown show once again.

  5. FelixKruell

    Corporate Income Tax is essentially a withholding tax; and

    Only sometimes…

    But I agree on the rest – these headlines about “One third of big companies pay no tax!” are terrible. Of course some don’t pay tax. That’s entirely expected. That’s how our corporate income tax system is designed. It’s not news (or it shouldn’t be).

  6. FelixKruell

    Frank:

    SILLINESS OF THE GST LAW:

    That’s pretty standard anti-avoidance language, and not limited to the GST legislation.

  7. Louis Litt

    Pyrmonter

    I noticed that with the increases in taxes since 2008 that people have become exhausted by all of this and the number who have given up and gone out of business has increased.

    The worst behaviour is not in the private sector but in the govt sector, charities and Not for Profits.

    Re Govt employees – 14.5% super as opposed to 9.5%
    Constiutionally Protected Super Funds – No tax on entry, If you earn over $200 no additional 15%, if you contribute more than $25 – the surplus is not taxed where as private individuals are tax at their marginal rate.

    Re losses – stupid – a business makes a loss it is entitled to claim them back – recall the ATO rulings on company tax losses being ill logical – if your business made a loss you can only claim it back if you carry on the same business – eg if you operated a car dealership and you dropped a manufacturer for another as it was causing the loss – you could not claim the loss.

    The current bashing of private business is unsustainable and the current climate will cause a recession sooner than later. The govt and the meeja – finger at you – the lunatic left as the used to be know as

    Consider you have been Litt

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