Google Australia clocks up AU$7.1m in tax for 2013

Despite revenues of almost AU$358m and a pre-tax profit of AU$46.5m, the Australian arm of the search giant was able to have a total income tax rate of 15 percent of its profits.
Written by Chris Duckett, Contributor

Google Australia had a bumper 2013, with the company increasing its yearly profit by almost AU$20m from AU$26.6m to AU$46.5m. The growth in profit outstripped the growth in revenue, which rose from AU$267m in 2012 to AU$356m in 2013.

From that profit, Google paid AU$7.1m in tax for the year, an increase on the AU$6.2m for 2012. The company received a AU$4.5m research and development tax offset, which was up from the AU$3.2m received last year.

Image: Google

The company nearly doubled its advertising expenses, with AU$40m spent for the year, up from the AU$22m of advertising spend in 2012. The largest expense item remained employee benefits, with the wage bill moving from AU$146m to AU$179m.

Payments to Google's American headquarters increased by almost 80 percent in 2013, with Google's parent entity receiving AU$43.4m from its Australian arm this year.

However, the numbers do not represent all of the revenue and profit from Google's business activities in Australia. The search giant's earnings in Australia have previously been estimated at the AU$1 billion mark, with Google's search and play store businesses being charged out of Singapore and Ireland.

In its filing, Google Australia states that its principal activities are "services, assistance and advice in connection with marketing and services support for web search engine services and advertising services." The filing states that it has a service agreement Google Ireland and Google Asia Pacific for the provision of services.

Multi-national corporations, such as Google and Apple, have come under fire for the use of transfer payments and the Double Irish Dutch Sandwich method of funnelling money through other countries from Australia in order to pay a lower tax rate.

At a recent G20 group of nations meeting in Brisbane, a communique from the meeting said the member nations would start to "deliver effective, practical, and sustainable measures" to combat transfer pricing.

Google chairman Eric Schmidt said in late 2012 that the company is simply engaged in "capitalism".

Last month, Google recorded overall revenue of US$3.45 billion for the first quarter of the year.

The search giant is currently battling with French tax authorities over a €1bn tax bill.

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