Movies these days are just bits, most of the time any work done overseas is just transferred back to LA over the internet. The same with software, any company can hire programmers overseas and just import the source code (git clone) and how is any govt supposed to tax that?
http://vfxsoldier.wordpress.com/2013/07/11/legal-recommendat...
The whole point of an union* is to give the participants the option to fight against such problems they couldn't solve alone, because "together we are strong" - "so, you don't give me an contract, because I did use my rights? Congratulations, you are now part of the unions black list, i.e. no more work from our industry for your studio. Good luck making your films without VFX."
> The same with software, any company can hire programmers overseas and just import the source code (git clone) and how is any govt supposed to tax that?
How do we manage to check copyright violations? Yeah, badly, I know. But that is just a variant of this problem, so it is solvable, but not easy. For movies, it is easy: Force the companies to declare exactly where which part of a movie was produced and tax accordingly.
* Note: I have no idea if an union would really be a good idea. The unions I know of are .. less than perfect. This is all just "in theory it would be ..."
Some times Unions and Employers act together for everyones interest eg Broad band rollout in the UK (prospect and CWU) and the the new nuclear build (prospect) are two I am familiar with.
In South America many countries tax imported professional services (including the outsourcing of source code development) - the way they monitor those types of activities is by tracking all outgoing payments from the country - if you can't pay your service provider, you can't get the service provided.
Therefore the government forces you to report what services you are importing in order to pay for them, and in doing so makes them taxable.