Australian tax commissioner disputes claims by Apple, Google

Claims by tech giants Apple, Google, and Microsoft about how much tax the companies pay in Australia have been questioned by Australian Taxation Commissioner Chris Jordan.

The Australian Commissioner of Taxation Chris Jordan has questioned claims by tech giants Apple and Google that their entire revenue from sales in the country is recognised for tax purposes.

During a public hearing on Wednesday, Jordan told the Senate committee inquiry into corporate tax avoidance that the Australian Taxation Office (ATO) -- which he heads up -- had taken issue with and disputed some of the comments made by representatives of Apple, Google, and Microsoft at a public hearing by the inquiry earlier this month.

"Mislead is a subjective term, but we do take issue and dispute some of the comments that have been made," Jordan told the committee.

The ATO is contesting Apple's statement that all revenue from its Australian sales is recognised for tax purposes. Some profits are transferred to low-tax jurisdictions.

In the case of Microsoft, Jordan said the ATO is trying to determine whether its statement that profits from Australian business are primarily earned in Singapore -- around AU$2 billion, with AU$100 million remaining in Australia -- is the appropriate split of revenue.

"We further understand that much of this Singapore profit paid out as technology fees ends up in Microsoft Bermuda," he said.

The commissioner also questioned Google's statement that Australian revenue from advertising is booked and taxed in Singapore. The ATO believes that the majority of profits made in Australia end up in Bermuda, where no tax is paid.

It emerged during the Senate economics references committee hearing on April 8 that the ATO is investigating Apple, Google, and Microsoft over the amount of tax the companies pay domestically.

Google Australia managing director Maile Carnegie said during the hearing that the company made AU$58 million in revenue in 2013, and profits of just more than AU$46 million, but paid AU$7.1 million in tax. However, she conceded that the majority of the company's taxes were paid in the US.

"The US headquarters is where the majority of our costs are borne," said Carnegie.

Meanwhile, Apple's Australia managing director Tony King said that Apple Australia is entirely owned by Apple Ireland, but insisted that the company does pay tax in Australia.

He claimed to not know of the so-called "double Irish Dutch sandwich" process of shifting profits to low-tax countries -- a practice in which Apple has previously been accused of engaging.

With AAP