​Microsoft Australia posts AU$55.9m profit for 2016

Microsoft's local entity has reported AU$55.9 million in net profit for the 2015-16 financial year.
Written by Asha Barbaschow, Contributor

Microsoft Australia has released its results for the 2015-16 financial year to the Australian Securities and Investments Commission (ASIC), reporting AU$55.9 million in post-tax profit, a AU$2.2 million profit increase year-on-year.

For the year ended June 30, 2016, the local arm of the tech giant pulled in AU$92.2 million in profit, paying 39.4 percent -- or AU$36.4 million -- in tax to the Australian government.

Revenue for the 12 months was AU$725.8 million.

It was revealed in December that for the 2014-15 financial year, Microsoft -- as well as Samsung, Apple, and Google -- 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, Microsoft coughed up AU$33 million in tax, despite the company's ASIC filing indicating tax paid for the period was AU$31.9 million.

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 ASIC.

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.

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

"The Australian Taxation Office is currently progressing through the ordinary course of an audit of Microsoft Pty Limited for the period of 1 July 2010 to 30 June 2013," Microsoft said in its latest earnings report.

"The ultimate outcome of the tax audit cannot be reliably estimated at this time. As a result, no provision has been recorded."

In December, Microsoft Australia named Steven Worrall as its new Australian managing director, following the departure of Pip Marlow, who joined Suncorp Bank in the newly created position of chief executive officer for Strategic Innovation.

Prior to joining Microsoft, Worrall led IBM's software business for the Asia-Pacific region, providing a major source of IBM's growth in the region. He worked for IBM for 22 years and held a number of marketing, sales, and general management roles during his career in the services, software, and financing segments of the business.

Marlow was with Microsoft for 21 years.

Globally, Microsoft reported net income of $16.8 billion for fiscal 2016, on revenue of $85.3 billion. Non-GAAP revenue, which reflects Windows 10 sales deferrals, was $92 billion.

The company's results were helped by lower tax rates abroad.

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