Sunday, 3 May 2015

Sinclair Davidson caught out AGAIN!

It was a wet weekend in Sydanee so I had plenty of time on my hands and at some stage on Saturday I linked to THIS article by Sinclair Davidson on Catallaxy.

Sinclair was obviously STRONGLY implying that Fairfax media was adopting the same tactics on tax as the Large mining companies and others such as Google. Microsoft Apple et al in minimising their tax rates.
Fairfax has an effective tax rate of 15.78% and He compared that to the 20.2% of Apple.

Wow I thought I did not know that Fairfax had the foreign branches , subsidiaries etc to engage in TRANSFER PRICING and other things. One Mining company apparently does all its marketing out of Singapore.
So naturally I looked at the Fairfax media ANNUAL REPORT.

The key table is  on page 92 of the  PDF.

Note a few things:

  • It is very transparent
  • Fairfax actually shows not only how much tax it would pay at 30% but why the tax it pays is smaller than that.
  • Fairfax only has New Zealand as another country it has companies in. It is not known as a country for minimising tax
  • The largest reason its tax bill was at 15.78% was capital gains not taxable. This had little to do with transfer pricing or any other vehicle used for dodging tax. It has a lot to do with managerial incompetence however.
So why would he imply what he has?
Perhaps he cannot read annual reports after all he cannot read either budget documents or ABS publications. I think we can rule this out however as to get the 15.78% figure you have to read the page I have spoken about. Even if a person doesn't understand what capital gains not taxable means  it is still pretty easy to see Fairfax has not indulged in any sort of transfer pricing or use of another country to minimise tax.

Perhaps he can but knows his audience cannot understand the above and will be inherently too lazy to examine the Fairfax annual report and thus he can make any accusation he wants to. He has form on goebbelsising and so he can allege anything he wants to.

He doesn't have a reputation to damage given his 'contributions' at Catallaxy and we have seen in the past he uses material that is inaccurate, misleading and thus plain wrong and just like this example it isn't hard to show that.

It is very very sad!