​Australia gets more tax out of global tech giants

The multinationals collectively coughed up billions to the Australian Taxation Office for the 2014-15 financial year.
Written by Asha Barbaschow, Contributor

For the 2014-15 financial year, Apple, Samsung, Microsoft, and Google all upped the amount of tax they paid in Australia over the year prior.

According to the Australian Taxation Office (ATO) 2014-15 Corporate Tax Transparency report, with revenue in the region totalling AU$8.3 billion, Apple coughed up AU$146 million in tax -- AU$72 million more than the iPhone maker did in 2013-14.

Similarly, Samsung, with 2014-15 revenue of AU$2.2 billion, paid AU$34 million in tax to the ATO, up from the AU$14 million it paid the year before. With AU$679 million in revenue for the same year, Microsoft paid AU$33 million in tax, while Google handed over AU$12 million in tax after earning AU$439 million in 2014-15.

For the same financial year, IBM Australia New Zealand Pty Ltd earned AU$3.6 million, Hewlett Packard South Pacific Pty Ltd earned AU$3.5 billion, and Dimension Data Australia Pty Ltd pulled an income of AU$1.2 billion. According to the ATO's report, not one of these three organisations paid tax in Australia.

The Australian arms of Acer, Atlassian, Capgemini, Citrix, CSG, MYOB, and NEC also had a zero placed in the tax payable column of the ATO report.

"No tax paid does not necessarily mean tax avoidance," the ATO said. "Even companies with very high total income sometimes make losses ... there are many legitimate reasons why this might be the case."

The report lists over 1,900 Australian public and foreign-owned corporate tax entities with a total income of AU$100 million or more, as well as Australian-owned resident private companies with a total income of AU$200 million or more.

Last year, it was found that Toshiba, Alcatel-Lucent, and Verizon did not pay tax during the 2013-14 income year; however, these three companies paid a combined AU$5.6 million worth of tax in 2014-15.

The ATO said Friday that the figures provided in its transparency report do not tell the complete story of a company's tax affairs or their level of engagement with the ATO.

"Noting that we cannot talk about specific taxpayers, be assured there are no surprises here for the ATO," Commissioner of Taxation Chris Jordan said in a statement.

"We already have access to far more detailed information and regularly engage with and assure the tax behaviour of these major players in the Australian economy.

"I should also say we collect, on average, about AU$2 billion from our compliance activities with these large and private companies each year, which is not reflected in the data released today."

Under Australia's multinational anti-avoidance laws, companies operating with an annual global income of more than AU$1 billion in Australia are now required to lodge their general purpose financial statements to the ATO -- as of July 1, 2016 -- if they are not already doing so with the Australian Securities and Investments Commission.

The implementation of the laws by the Australian government was part of recommendations that were made by the Organisation for Economic Cooperation and Development (OECD) from its G20-commissioned base erosion and profit-shifting (BEPS) project.

Under BEPS, the OECD expects governments to be able to retrieve as much as $240 billion in lost revenue each year through dodgy tax practices across the globe, which it claims represents up to 10 percent of global corporate income tax revenues.

The committee said that concerns over the tax cuts resulting in a transfer of revenue from the Australian government to the US government are not well founded, and signed off on the report with a statement welcoming the proposed amendments.

Apple, Google, and Microsoft admitted last year they were being audited by the ATO for tax avoidance. Much of Google Australia's revenue from advertising is actually taxed in Singapore, where the tax rate is much lower -- a practice also employed by Microsoft.

Apple and Google were also previously called out by the federal government for employing the so-called Double Irish Dutch Sandwich method, which is a method of funnelling money through other countries from Australia in order to pay a lower tax rate.

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