If you use Uber, you’re reducing restaurant profits. You might pay an extra $4 as a consumer, but the restaurants pay more than that. Better to dine in and give a tip in cash!
I didn’t know they charged the restaurants. I am surprised they would accept that deal.
It gives restaurants access to more customers, but at a % cost. If you like a restaurant, you’ll support it directly.
Obviously it’s better to find in lol what?
Seeing how much these companies lose and throw more money at to gain market share means you won’t get more tax. Their revenue might be that high but not their profits.
What you should target them with is (1) anti-competitive behaviour and (2) employment rights for drivers. They have completely abused all systems and their drivers to get where they are but they are probably not breaking tax laws. It’s an unsustainable model.
On the other side, the likes of McDonalds gain massively from the extra sales and probably do lots more of the dodgy stuff tax wise…
As I said elsewhere, it’s easy to rig the numbers to show low profits. For example by paying your parent company in another country high franchise fees.
thats not “rigging” and you have no proof thats being done. There is regulation that states payment for services from a parent by a subsidiary must be market rate. If that didnt exist susidaries would be able to get free services from a parent company and that would be anti competitive and generate less tax.
I don’t have access to it but the proof is supposedly there in the tax filings. Having said that there is 100% probability they are paying their parent companies license fees and franchise fees.
in any case 402 million in revenue for a business who does nothing but clip tickets means there should be lot more profit and lot more taxes paid.
So they had a company tax bill of $1m which would have been from a profit of $3m, so their expenses would have been $399m.
That’s just accounting and that headline is just rage bait.
Or to put it another way, less than 1% profit, a bad investment.
It’s just not believable that a ticket clipping service which charges both the consumer and the restaurant is only making 1% profit. It’s not like they are investing in equipment or holding inventory or anything like that.
Oh totally. I don’t doubt Uber is inflating their expenses.
Shifty journalism just bugs the hell out of me.
What are their expenses anyway? They don’t have many employees, they don’t have inventory, they probably have a decent sized amazon bill but I doubt it’s that much given how small NZ market is.
“Franchise fees”.
Paywalled.
Headline says it all though.
No it doesn’t. You don’t pay tax on revenue, you pay it on profit. From what I can see before the paywall text shows, they barely made any profit.
Profits are easy to fudge. You just pay your parent company some license fee or something and voila no profits.
Sure, but the headline doesn’t say it all because you don’t pay tax on revenue.
Not quite. Net income could be small due to paying nz drivers so the taxable amount may only be 7m. 1m taxes off of 7m seems higher.
Also shifting income to another jurisdiction is considered “good management” by management. I hate it, but the rule is “if you can explain solid business logic in front of a judge with a straight face then the judge can’t find issue with it”. The law may be different in nz.
Most parent companies in the usa have hq in the tiny state of Delaware and massive “rent” payments from the “subsidiaries that do all the actual business” to the parent. Many states get into agreements for waste management to be taken over by a private company and all profits go to the local government… and the local subsidiary never turns a “profit”. Sigh …
I guess if you can make up numbers about profits then it might make sense.
It’s more likely tax evasion as you described. That’s on us. We are too fucking stupid to prevent this kind of tax evasion. Well maybe not stupid, just corrupt as shit because they grease the palms of the parties and politicians to make sure they don’t get taxes properly.
It’s “tax evasion” in the sense that it’s a company using tax laws to minimise the amount of tax they pay, just like how you and I do when we do our taxes. The differences are it’s much easier to do for multinational corporations due to tax laws, And due to them being able to pay lots of accountants lots of money to find every way possible.
Why is any of that even possible? Because we wrote the tax laws to make it possible.
There are a multitude of good and reasonable reasons why it’s possible. You can’t make companies pay tax on revenue because that would instantly throw 90% of companies into bankruptcy. You can’t stop companies from paying licensing fees etc to their parent company and writing it off as a business cost, because that would destroy all franchise stores etc.
The tax “loopholes” exist for a legitimate reason, so companies structure themselves so they can take advantage of them. Getting rid of them would hurt the companies that need them more than the companies that “abuse” them.
There are a multitude of good and reasonable reasons why it’s possible. You can’t make companies pay tax on revenue because that would instantly throw 90% of companies into bankruptcy.
I see people say this all the time but it makes no sense. I pay taxes on revenue and so do you. We don’t get to deduct all our expenses from our salaries right?
How come every single person in the country isn’t bankrupt if paying taxes on revenue leads to bankruptcy?
You can’t stop companies from paying licensing fees etc to their parent company and writing it off as a business cost, because that would destroy all franchise stores etc.
Yea so?
The tax “loopholes” exist for a legitimate reason, so companies structure themselves so they can take advantage of them. Getting rid of them would hurt the companies that need them more than the companies that “abuse” them.
I disagree. Companies exist in countries where these types of things are not permitted.
