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17.
Hong Kong
Threatens Sales Boycott
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08/01/2003 |
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The
ongoing battle between the Australian tax office and breeding organizations may
be bought to a head by a statement from the Hong Kong Jockey Club that it was
reconsidering its policy of buying yearlings in Australia due to the increasing
costs following the tax office ruling that GST is incurred on yearlings that are
left in Australia to be broken in before being shipped to Hong Kong. No GST is
incurred on yearlings that are sent straight to Hong Kong.
Winfried Engelbrecht-Bresges, the Jockey Club's director of racing, told Alan
Aitken of the South China Morning Post: "We are going to have to consider
whether it is sound business to buy as many horses in Australia. If you add the
10 per cent GST to the price of the horse and the early costs, and then consider
that the Australian dollar is 10 per cent stronger this year than last, then we
have a serious rise."
"They are saying that there is a change of status by having the yearlings
broken in and educated in Australia," Engelbrecht-Bresges said. "Even
if we export the horses within seven months of the purchase, we are required to
pay the tax. If we were to race the horses first, then we would fully
understand, but this is a schooling process.
"In other countries, like New Zealand or the United Kingdom, there is no
additional tax to be paid on purchases provided they leave the country within a
certain time and there is no problem with leaving them there to be broken
in."
With the Conrad-Jupiters Magic Millions sale, the first major sale of the year,
due to start tomorrow, the Jockey Club announcement was timed to make maximum
impact. The Jockey Club is consulting with AusHorse on the problem. "We are
in daily contact with them. When the GST was introduced, the Australian
government assured AusHorse it would not hurt the industry but there may be a
difference of opinion now," Engelbrecht-Bresges said.
By: Mark Smith - Wednesday, 8 January 2003
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