[6nf]

Transfer pricing. It's the same for all big companies operating in Australia (and probably most other countries)

Of course there's nothing illegal about this and it's very difficult to really do something about it. The Australian Tax Office is struggling with this problem every day.

[turc1656]

I think it's pretty easy to deal with it actually. Just apply a top line revenue tax of something like 2%. That can't be avoided because it is incurred at the point of sale. So it becomes an effective tax on accessing the market of that state/country. Then you would still have the corporate income tax that gets applied but companies would be able to offset their income tax liability with taxes paid for this new top line revenue tax. So it essentially becomes a sort of AMT tax for companies to ensure that they are paying some sort of minimum tax. 2% might not sound like much but when you consider that it's top line revenue and the majority of companies have profit margins in the 10-25% range, this equates to a minimum tax rate of 8-20%.

[photojosh]

How does that differ significantly from sales tax/GST? We'd get the same government revenue increase from increasing GST from 10 to 12%, no?

Ultimately the cost of all taxes will be borne by consumers anyway.