1
00:00:00,160 --> 00:00:02,600
Speaker 1: New report this morning into one of life's great conundrums,

2
00:00:02,600 --> 00:00:04,240
Speaker 1: how to get big tech to pay their so called

3
00:00:04,280 --> 00:00:06,960
Speaker 1: fair share of tax. Now we've blurred the lines of

4
00:00:07,000 --> 00:00:10,400
Speaker 1: New Zealand subsidiaries making large payments to offshore affiliates. This

5
00:00:10,520 --> 00:00:12,319
Speaker 1: is not new, of course, they call them service fees.

6
00:00:12,520 --> 00:00:15,319
Speaker 1: Nick Miller is the Authory's international text specialist in these

7
00:00:15,320 --> 00:00:18,920
Speaker 1: with us. Nick, morning to you, why won't that work?

8
00:00:18,960 --> 00:00:21,680
Speaker 1: There we go? Sorry, I got you now, without no

9
00:00:21,800 --> 00:00:24,040
Speaker 1: disrespect to you at all. This isn't new, is it.

10
00:00:24,079 --> 00:00:25,720
Speaker 1: I mean they've been paying service fees forever.

11
00:00:27,240 --> 00:00:30,520
Speaker 2: They have been paying service fees for a long time.

12
00:00:31,680 --> 00:00:35,880
Speaker 2: That's right. But what the report, what our report seems

13
00:00:35,880 --> 00:00:38,960
Speaker 2: to do is is to now look at how we

14
00:00:39,000 --> 00:00:45,159
Speaker 2: can use existing legislation to challenge these service fees in

15
00:00:45,200 --> 00:00:47,960
Speaker 2: the wake of obviously the demise of the Digital Services Tax,

16
00:00:48,000 --> 00:00:51,520
Speaker 2: because obviously there's been a perception that these companies haven't

17
00:00:51,560 --> 00:00:54,360
Speaker 2: been paying enough tax. Otherwise why would we have had

18
00:00:54,360 --> 00:00:58,560
Speaker 2: the advent of the DST. So the report is trying

19
00:00:58,560 --> 00:01:02,880
Speaker 2: to shine a light in some detail on these techniques

20
00:01:03,240 --> 00:01:07,320
Speaker 2: and moving on to look at how we can use

21
00:01:07,840 --> 00:01:13,759
Speaker 2: existing legislation, existing principles to challenge these techniques and get

22
00:01:13,800 --> 00:01:14,560
Speaker 2: more tax.

23
00:01:14,480 --> 00:01:17,120
Speaker 1: Important point you make existing would we need to change

24
00:01:17,120 --> 00:01:19,319
Speaker 1: the law, because presumably you could then ask the question,

25
00:01:19,360 --> 00:01:20,920
Speaker 1: if we don't need to change the law and can

26
00:01:21,040 --> 00:01:24,039
Speaker 1: use existing legislation, why isn't the IID already doing it.

27
00:01:26,080 --> 00:01:27,880
Speaker 2: I don't think we would need to change the law,

28
00:01:29,080 --> 00:01:31,840
Speaker 2: and the report makes that clear. I think you'd need

29
00:01:31,880 --> 00:01:36,800
Speaker 2: to ask ir about that. But I guess if you

30
00:01:36,880 --> 00:01:38,840
Speaker 2: if you look back over the last up two or

31
00:01:38,880 --> 00:01:42,040
Speaker 2: three years, there's been a focus on the digital services

32
00:01:42,080 --> 00:01:47,680
Speaker 2: taps and potentially other multilateral solutions or potential multilateral solutions.

33
00:01:47,920 --> 00:01:51,440
Speaker 2: Now those that don't seem now likely to see the

34
00:01:51,520 --> 00:01:54,880
Speaker 2: life of day. So we are back. The issue hasn't

35
00:01:54,880 --> 00:01:57,200
Speaker 2: gone away. So we're back with how do we how

36
00:01:57,200 --> 00:01:58,480
Speaker 2: do we deal with this? How do we find a

37
00:01:58,520 --> 00:01:59,280
Speaker 2: way to challenge it?

38
00:01:59,360 --> 00:02:01,360
Speaker 1: Do we have small countries syndrome? In other words, and

39
00:02:01,400 --> 00:02:03,080
Speaker 1: we go too hard, they're going to get pissed off

40
00:02:03,080 --> 00:02:05,040
Speaker 1: and go away.

41
00:02:07,040 --> 00:02:11,280
Speaker 2: I doubt if that is the case, because if if

42
00:02:11,320 --> 00:02:14,520
Speaker 2: you look at the filings of these multinational groups, of

43
00:02:14,520 --> 00:02:17,440
Speaker 2: the global filings, that is, they're in dispute with with

44
00:02:17,600 --> 00:02:20,400
Speaker 2: many countries all around the world. So I don't think

45
00:02:20,400 --> 00:02:23,679
Speaker 2: we wouldn't be unique. And obviously if it's all what's

46
00:02:23,720 --> 00:02:29,600
Speaker 2: going on in Australia that the Australian Tax officers have

47
00:02:29,680 --> 00:02:33,799
Speaker 2: been involved in litigation and taking other measures, So so no,

48
00:02:34,000 --> 00:02:37,560
Speaker 2: we we would we would simply be fighting our own corner,

49
00:02:38,440 --> 00:02:40,160
Speaker 2: in common with a lot of other countries.

50
00:02:40,280 --> 00:02:41,120
Speaker 1: Who does it will?

51
00:02:45,200 --> 00:02:51,360
Speaker 2: I think the Australian Tax Office is big because they're

52
00:02:51,560 --> 00:02:54,880
Speaker 2: they're they're the closest, closest country to us. But also

53
00:02:55,200 --> 00:03:00,840
Speaker 2: they have I think had a had a pretty relentless

54
00:03:00,880 --> 00:03:04,679
Speaker 2: focus on this and on on on the subject of

55
00:03:05,720 --> 00:03:09,919
Speaker 2: for example, royalties. Can can we use our existing law

56
00:03:10,000 --> 00:03:13,520
Speaker 2: to impose with holding tax on royalties which which otherwise

57
00:03:13,600 --> 00:03:17,400
Speaker 2: reduce which reduced the profits in both Australia and New Zealand.

58
00:03:19,080 --> 00:03:22,800
Speaker 2: But I mean we should still forge our own path.

59
00:03:23,200 --> 00:03:25,079
Speaker 2: I think we can learn a lot from what's what's

60
00:03:25,120 --> 00:03:30,360
Speaker 2: going on over the ditch. But ultimately if we if

61
00:03:30,639 --> 00:03:35,520
Speaker 2: we want to obtain more tax from multinationals operating here,

62
00:03:35,560 --> 00:03:39,000
Speaker 2: then ultimately the New Zealand courts may have to reach

63
00:03:39,000 --> 00:03:40,880
Speaker 2: an interview on these issues.

64
00:03:40,880 --> 00:03:42,680
Speaker 1: Do you have to test all right now? Nick appreciated

65
00:03:42,720 --> 00:03:44,920
Speaker 1: my last Prime Minister about it. On Monday actually Nick Miller,

66
00:03:44,920 --> 00:03:47,680
Speaker 1: International Tech Specialists with us this morning. Because of course

67
00:03:47,680 --> 00:03:49,480
Speaker 1: we all know that the I Idea have been shaking

68
00:03:49,480 --> 00:03:51,160
Speaker 1: the tree Philly hard, and they've got some new tach

69
00:03:51,240 --> 00:03:53,840
Speaker 1: and they're matching stuff up and they're bringing in more money.

70
00:03:53,840 --> 00:03:55,040
Speaker 1: So I don't know why they haven't gone down to

71
00:03:55,080 --> 00:03:55,960
Speaker 1: this particular path.

72
00:03:56,520 --> 00:03:59,440
Speaker 2: For more from The mic Asking Breakfast, listen live to

73
00:03:59,560 --> 00:04:02,720
Speaker 2: Newstalk said B from six am weekdays, or follow the

74
00:04:02,760 --> 00:04:04,240
Speaker 2: podcast on iHeartRadio