Microsoft: SG's tax system is heavenly!

[Confuseous]

Microsoft’s global tax chief Bill Sample, under investigation by the Australian Taxation Office, admitted that huge revenue figures from Australia were booked in Singapore, where the corporate tax rate is capped at 17 per cent compared to Australia’s 30 per cent. Microsoft's A$2 billion of revenue generated in Australia, including from Windows and Xbox products, ended up in Singapore.

RMIT University tax expert Professor Sinclair Davidson explained how the round tripping mechanism was perfectly legal: “When you buy a Microsoft product, the intellectual property is registered in Singapore. The Australian arm of the company then pays a royalty fee to the Singapore holding company, effectively transferring the profit to a country where the tax rate is half that of Australia.’’

Google Australia’s managing director Maile Carnegie had nothing to hide too. She said: “This is the way the global tax system works," confirming that the company’s lucrative advertising revenue was booked in Singapore but could not say how much, citing US disclosure laws.

With all those juicy numbers fattening up the balance sheets, and minimal direct or indirect overhead costs incurred in country, shouldn't our productivity rate be shooting up the roof?

Will the guy who debunked the 450,000 figure of worshippers who filed past the casket in 4 days please fire up your calculator again?

http://singaporedesk.blogspot.sg/2015/04/were-rich.html

 

[Confuseous]

Glencore says it will stop funnelling sales from its Australian coal operations through Singapore, a move that comes amid growing concern in Canberra about the impact that alleged tax avoidance by multinational mining companies is having on the country’s tax take …

[It said this to an] Australian parliamentary inquiry scrutinising the use of Singapore marketing hubs by BHP Billiton, Rio Tintoand Glencore to reduce the mining groups’ tax bills.

Glencore told the committee that almost half its Australian exports flow through S’pore …

(FT report on Friday)

 

[laksaboy]

A prostitute does not care about big penises or small penises, hard penises or flaccid penises, white penises or black penises.

As long as you can pay for the services, you have a good penis and are thus welcome.

After all, that is the fundamental doctrine of nation-building in Singapore. LKY's 'pragmatism', endorsed by 450k people.

 

[Leongsam]

I'm not quite as big as Microsoft but I declare my profits in Singapore too for exactly the same reason.

 

[SgGoneWrong]

I'm not quite as big as Microsoft but I declare my profits in Singapore too for exactly the same reason.

Boss Sam, can u teach me how I can channel my earnings in Australia to sg too for tax savings? If I live in sg and my business in based in Australia, can I channel it to sg by the fact that I am based in sg as the boss but my aust business is under management?

 

[Leongsam]

Boss Sam, can u teach me how I can channel my earnings in Australia to sg too for tax savings? If I live in sg and my business in based in Australia, can I channel it to sg by the fact that I am based in sg as the boss but my aust business is under management?

If you have a brick and mortar business in OZ, you need to ask an accountant how to book the majority of your profits abroad. I'm not qualified to give any sort of advice.

My business is web based which makes it a lot easier. All purchases are processed via Singapore even though the actual sale occurs in OZ.

 

[SgGoneWrong]

If you have a brick and mortar business in OZ, you need to ask an accountant how to book the majority of your profits abroad. I'm not qualified to give any sort of advice.

My business is web based which makes it a lot easier. All purchases are processed via Singapore even though the actual sale occurs in OZ.

Thanks Boss Sam.

 

[Asterix]

Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price. Legal entities considered under the control of a single corporation include branches and companies that are wholly or majority owned ultimately by the parent corporation. Certain jurisdictions consider entities to be under common control if they share family members on their boards of directors. It can be used as a profit allocation method to attribute a multinational corporation's net profit (or loss) before tax to countries where it does business. Transfer pricing results in the setting of prices among divisions within an enterprise.

In principle a transfer price should match either what the seller would charge an independent, arm's length customer, or what the buyer would pay an independent, arm's length supplier. While unrealistic transfer prices do not affect the overall enterprise directly, they become a concern when they are misused to lower profits in a division of an enterprise that is located in a country that levies high taxes and raise profits in a country that is a tax haven that levies no or low taxes. Transfer pricing is the major tool for corporate tax avoidance also referred to as Base Erosion and Profit Shifting (BEPS).

http://en.wikipedia.org/wiki/Transfer_pricing

 

[Leongsam]

In principle a transfer price should match either what the seller would charge an independent, arm's length customer, or what the buyer would pay an independent, arm's length supplier. While unrealistic transfer prices do not affect the overall enterprise directly, they become a concern when they are misused to lower profits in a division of an enterprise that is located in a country that levies high taxes and raise profits in a country that is a tax haven that levies no or low taxes. Transfer pricing is the major tool for corporate tax avoidance also referred to as Base Erosion and Profit Shifting (BEPS).

http://en.wikipedia.org/wiki/Transfer_pricing

Apple does exactly the same thing. All the profits from their non US sales end up being declared in Ireland.

 

[SgGoneWrong]

Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price. Legal entities considered under the control of a single corporation include branches and companies that are wholly or majority owned ultimately by the parent corporation. Certain jurisdictions consider entities to be under common control if they share family members on their boards of directors. It can be used as a profit allocation method to attribute a multinational corporation's net profit (or loss) before tax to countries where it does business. Transfer pricing results in the setting of prices among divisions within an enterprise.

In principle a transfer price should match either what the seller would charge an independent, arm's length customer, or what the buyer would pay an independent, arm's length supplier. While unrealistic transfer prices do not affect the overall enterprise directly, they become a concern when they are misused to lower profits in a division of an enterprise that is located in a country that levies high taxes and raise profits in a country that is a tax haven that levies no or low taxes. Transfer pricing is the major tool for corporate tax avoidance also referred to as Base Erosion and Profit Shifting (BEPS).

http://en.wikipedia.org/wiki/Transfer_pricing

Very cheem to understand.

 

[SgGoneWrong]

Apple does exactly the same thing. All the profits from their non US sales end up being declared in Ireland.

Many companies do that, transfer to tax haven sg, IKEA Australia does that too but to some European tax heaven.

If I'm not selling products but providing a service, can I do that?
Eg. For happy ending service, instead of Australian customers pay by credit card to my aust account, how about I have them credit to my sg account but I charge same amount? Eg. $100 aud for service, $100 sgd for same service?

 

[Leongsam]

If the service is provided in OZ, you're going to find it very difficult to declare the income somewhere else in the world. Check with your accountant.

Many companies do that, transfer to tax haven sg, IKEA Australia does that too but to some European tax heaven.

If I'm not selling products but providing a service, can I do that?
Eg. For happy ending service, instead of Australian customers pay by credit card to my aust account, how about I have them credit to my sg account but I charge same amount? Eg. $100 aud for service, $100 sgd for same service?

 

[aerobwala]

Do it in two steps. You still collect money from customer in place where services were rendered. Do another royalty agreement to charge yourself on royalty basis as you provide expertise in identifying and selecting talents that are capable of doing the happy ending service and you needs to spend time and effort to coach and train them for exact delivery of exceptional experience.

Eg. For happy ending service, instead of Australian customers pay by credit card to my aust account, how about I have them credit to my sg account but I charge same amount? Eg. $100 aud for service, $100 sgd for same service?

 

[winnipegjets]

Apple does exactly the same thing. All the profits from their non US sales end up being declared in Ireland.

Uncle Sam is going after all these companies.

 

[SgGoneWrong]

Do it in two steps. You still collect money from customer in place where services were rendered. Do another royalty agreement to charge yourself on royalty basis as you provide expertise in identifying and selecting talents that are capable of doing the happy ending service and you needs to spend time and effort to coach and train them for exact delivery of exceptional experience.

Thanks for the idea, sounds like franchise, I will explore.

 

[frenchbriefs]

Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price. Legal entities considered under the control of a single corporation include branches and companies that are wholly or majority owned ultimately by the parent corporation. Certain jurisdictions consider entities to be under common control if they share family members on their boards of directors. It can be used as a profit allocation method to attribute a multinational corporation's net profit (or loss) before tax to countries where it does business. Transfer pricing results in the setting of prices among divisions within an enterprise.

In principle a transfer price should match either what the seller would charge an independent, arm's length customer, or what the buyer would pay an independent, arm's length supplier. While unrealistic transfer prices do not affect the overall enterprise directly, they become a concern when they are misused to lower profits in a division of an enterprise that is located in a country that levies high taxes and raise profits in a country that is a tax haven that levies no or low taxes. Transfer pricing is the major tool for corporate tax avoidance also referred to as Base Erosion and Profit Shifting (BEPS).

http://en.wikipedia.org/wiki/Transfer_pricing

I read about this in some stock market/business book about how wall street cheats the public.

 

[quartz28]

This is creative accounting....a lot of US company based itself in Singapore for exactly the same reason...also, another loop hole...setup a HQ with an angmo expat as high flying executive together with setting a so call R&D dept here will gather the company some more tax break....help the company bottom line tremendously.. the expense of putting expats will be considered as peanuts with the millions of tax dollars saved...

 

[Asterix]

Very cheem to understand.

This 900 page guide from Big Accounting will help you to understand and also put you to sleep ..... question is which comes first.

https://www.pwc.com/gx/en/international-transfer-pricing/assets/itp-2013-final.pdf

 

[frenchbriefs]

This is creative accounting....a lot of US company based itself in Singapore for exactly the same reason...also, another loop hole...setup a HQ with an angmo expat as high flying executive together with setting a so call R&D dept here will gather the company some more tax break....help the company bottom line tremendously.. the expense of putting expats will be considered as peanuts with the millions of tax dollars saved...

No wonder so many ang moh in SG nowadays

 

[WuJianDao]

Do it in two steps. You still collect money from customer in place where services were rendered. Do another royalty agreement to charge yourself on royalty basis as you provide expertise in identifying and selecting talents that are capable of doing the happy ending service and you needs to spend time and effort to coach and train them for exact delivery of exceptional experience.

Royalties-payout or remittance from most countries, including Korea, Malaysia, Singapore, etc are imposed with 10-30% withholding tax.

Therefore, using royalty fees to transfer profit overseas is not a good tax avoidance method in many countries.