because low margin foreign owned businesses can eliminate all of...

because low margin foreign owned businesses can eliminate all of their taxable profit in Australia. This means they will pay no corporate tax here. Businesses like ALDI and IKEA operate of effective margins circa 3% or less on gross sales. So you can then eliminate all of that 3% taxable profit by:

1. Debt load to thin cap rules, which creates a finance charge in Australia and you generate income in a low tax country offshore that ‘financed’ said business in Australia. Even though the whole consolidated group is the same company. Think of it as internal bank.
2. Royalty charge for brand name. Ie ALDI. Again removes profit here (high tax country globally) and the revenue profit goes to a low tax country which actually owns the brand name.
3. Offshore management charges as key management offshore etc.
4. Premiums on manufactured goods in low tax country, then on sell to Australia where you claim you make utterly nothing.

the whole system stinks. It does no good for the likes of WES and WOW to do this as they are ultimately domiciled here and would eventually get taxed as it’s passed back and or goes out in dividends.

google Ikea no tax in Australia. A lot of articles may explain it better in layman’s terms.