SaltyNZ:

 

We already know that multinational businesses dodge business tax by finding ways to charge themselves fees so that they "never" make a profit anywhere except the Cayman Islands or the like. This is a direct result of business being taxed on profit rather than revenue like wage earners are. And I accept the rationale behind taxing profit rather than revenue - i.e. that by only taxing profit we encourage business to reinvest their money in the business to expand it. Higher marginal profit taxes won't change that situation; businesses big and smart enough to structure are already doing it.

 

What we need even more are mechanisms to catch that money leaving the country. The situation is absurd.

 

Funny, was reading about this yesterday, in a US context. And they put it it an easy way to understand:

• Company registers in the USA
• Company registers in Ireland
• Irish company "owns" the IP, trademark, etc
• The USA-based company pays an absurd price to the Irish company for the rights to use those
• The company pays someone in the Cayman Islands to "own" a corporation
• Irish company pays absurd consulting fees to Cayman Islands corporation

Money is clean. How do they repatriate the money? 

They don't. The company borrows money using the foreign bank accounts in their name as "collateral".

If the loan expires, renew it with even bigger collateral because there's more money in the bank.

Companies are happy, banks are happy. The common citizenry is the only ones paying tax (on salary, on GST with money already taxed on salary source, on petrol, etc).

Rinse, repeat.

They don't use their money. They use someone else's money to make more money.