Not so much a loophole, as it was always recognised by government that purely digital plays represent a unique problem, not covered by earlier efforts e.g. Multinational Anti-Avoidance Law (MAAL), Diverted Profits Tax, Thin Capitalisation Rules, Transfer (Mis)Pricing, etc.
https://www.oecd.org/ctp/tax-challenges-arising-from-digitalisation-interim-report-9789264293083-en.htm
https://www.oecd.org/tax/international-community-makes-important-progress-on-the-tax-challenges-of-digitalisation.htm
Apparently Australia has decided not to do anything unilateral about this until the OECD has a uniform position, no earlier than 2020. I believe that one motivation for that is that unilateral action may lead to a situation where the corporate tax may end up being borne by the Australian consumer (over and above the GST).
On that basis, Spotify may be paying no tax in Australia (for now, anyway). So why move credit card processing overseas? Spotify does not exist as a company in Australia, as far as I know. There is no Australian company to tax - and there is no OECD regime to tax a company resident elsewhere on its profits arising out of economic activity in Australia.
Or is it nothing to do with Spotify and instead arises out of the payment processor (seemingly PayPal)?
