AU$5m tax bill sees Lenovo Australia & New Zealand post AU$699k profit
Lenovo (Australia & New Zealand) has made its financial results for 2017 available to the Australian Securities and Investments Commission, reporting AU$699,294 in after-tax profit.
For the 12-month period, the local arm of Lenovo reported AU$5.78 million in pre-tax profit, paying the Australian Taxation Office (ATO) AU$5.1 million in tax. The company paid AU$1.64 million in tax on pre-tax profit of AU$1.74 million in 2016.
In response to questions about the significant rise in tax paid, the company said: "Lenovo pays its taxes in accordance with all Australian tax laws, and complies with relevant local taxes around the world."
Revenue from the sale of goods for the reported year was AU$699.5 million, while revenue from services totalled AU$31.9 million.
During the financial year, Lenovo (Australia & New Zealand) split out its Data Centre Group operations into a new legal entity by means of a local asset transfer agreement. Lenovo Global Technology (Australia & New Zealand) was incorporated on August 17, 2016.
All assets and liabilities of the Data Centre Group operations were transferred to the newly incorporated entity as at January 1, 2017, the company explained.
As a result, the financial statements represent the 12 months of trading of the Personal Computer Group and the nine months of trading of the Data Centre Group, and the principal activities of the company during the year was therefore reported as the wholesaling of computer equipment.
Itemised on its balance sheet was AU$115.2 million in receivables from other Lenovo group companies.
Lenovo, alongside the local arms of Microsoft, Apple, Google, and Samsung Electronics, had its Australian income for the 2015-16 financial year published by the ATO, with the 2015-16 Report of Entity Tax Information revealing last month that the multinationals are paying the appropriate amount of tax.
The Australian government legislated a new Diverted Profits Tax (DPT) in March, which is intended to prevent the practice of multinational organisations shifting profits made in Australia offshore to avoid paying tax.
The DPT will hit multinationals with global revenue of more than AU$1 billion and Australian revenue of greater than AU$25 million with a 40 percent tax on all profits.
The new tax law is expected to see AU$100 million in revenue per year -- from 2018-19 -- stay on Australian soil.
The legislation mirrors laws implemented in the United Kingdom, nicknamed the Google Tax after the search engine giant was ordered to pay the UK government £130 million in back taxes.
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