See also BB's thread: http://forums.silverstackers.com/to...vestigate-australian-gold-industry-fraud.html Even the Tax commissioner was impressed with this one. May have been detected via analytics on claims:
So does that mean they traded $1.8BN in gold to themselves? If so where the hell did they get $1.8BN in gold to melt down? Even $184M would be impressive.
You could melt and sell the same 40kg to yourself every day for a few years. That's a bit under 2m/day (probably averages about that over the last couple years spot price), 600m year, 1.8B every 3 years...that does seem wildly excessive. I don't know how much the average scrap/smelter does but averaging 40kg a day would surely make them some of Australias biggest private recyclers.
Why even have a single bar or bother to melt it. Just record that you received and disposed of it as you are just selling to another company owned by you anyway. Melting an item seems like too much hard work for me!!
Expansion of the GST base Probably an easy sell to the electorate, especially if its part of an alternative to increasing the GST.
If I understand the scheme correctly there is two companies, and it works something like this: 1. Company A acquires a pure gold bar. Melts it down adding other metal so the bar is now 'scrap' gold. 3. Company B purchases the 'scrap' gold bar from company A. The sale has GST. Company B can claim a GST credit on the purchase. My question is. Wouldn't company A be required to collect GST on the purchase?
I tried to look up the details on the ATO website, but of course, being a government website, this is what I get today: I'd say more about government IT systems, but don't want to get into trouble because I'd have to start describing things such as tax payers getting buggered by large durians, and that would be appropriate. Anyway, our tax system is so convoluted and Byzantine that it is full of obscure loopholes. I wouldn't be surprised that, if these guys had substantially more resources (on the level of Apple, Google, NewsCorp or Hollywood), they may have had a chance at fighting this.
general remark: tax systems are bound to have loopholes because their existence reason requires a selective (on a total net basis) application. One is sponsored, with what is taken from another. It needs dedicated (paid for) agencies to know and apply them. This way, average Joe, being the net tax payer, is excluded. In my country the tax agency suspended refunds till next year, so called due to assigned funds for 2014 being used all. A while ago, I've read that the total that they refund is bigger than what they get in (this is about the tax remainder, being a + or - correction of the automatical payments over the year). It says everything about the degree that the minus elements are used. There are hundreds kinds of things that are subtractable. An extreme example was a guy that insulated his roof (govt sponsors this with eco excuses) and he combined several such kinds of sponsoring, to a net result that he even got paid to insulate his roof - he received more than it costed. So, even the intention to fight certain things, may just not be there. Buddies under buddies ahem.
