Most tech giants paid their share of tax during 2018 financial year, ATO reveals

Some of the world's largest global tech firms that operate in Australia have continued to abide with the country's tax laws, coughing up their share of payable tax during the 2017-18 financial year, the fifth annual corporate tax transparency report from the Australian Taxation Office (ATO) has revealed.

The 2017-18 Report of Entity Tax Information lists just over 2,200 Australian public and foreign-owned corporate tax entities with revenues of AU$100 million or more, as well as Australian-owned resident private companies with an total revenue in excess of AU$200 million or more.

It shows the total revenue each company earned during the reporting period and how much tax they paid.

The ATO indicated Apple Australia, which cashed in just over AU$9 billion in revenue during the period -- the most out of the global tech conglomerates -- handed over just a little more than AU$120 million in tax, which represented just shy of 30% of its AU$403 million taxable income.

Google Australia earned just over AU$1 billion in the region and paid AU$37 million in tax on a taxable income of AU$188 million -- or a tax rate of 19.76%; Microsoft Australia paid AU$61 million in tax on the AU$2.3 billion in revenue made during the financial year, but this represented 30% of taxable income; Samsung Electronics Australia reported total income of AU$2.5 billion, which saw it pay AU$22.5 million in tax to the ATO, or 30% of its taxable income of AU$75.2 million; Facebook Australia closed the financial year with AU$480 million in revenue with AU$12.7 million of that going towards tax, or 30% of its AU$42.5 million taxable income; Amazon Web Services Australia paid AU$6.5 million -- or 30% -- on its taxable income of AU$21.9 million from revenue of AU$201.6 million; and Huawei Australia made AU$624 million in revenue during the reporting period and paid the ATO AU$25 million in tax at an effective tax rate of 29.35% on its taxable income of AU$86 million.

Hewlett Packard South Pacific also paid an effective tax rate of 30% on its AU$4.47 million taxable income.

See also: How to protect your business from tax fraud (TechRepublic)

The tech multinationals that continued to be repeat offenders, however, in not paying a single cent in tax to the ATO during the 2017-18 financial year were SAP Australia and DXC Technology Australia, despite having in excess of of AU$1 billion in revenue. These companies recorded losses in prior years, with internal restructuring costs hurting DXC Australia and SAP Australia posting a AU$29 million loss for FY18.

NEC Australia also had zero taxable income, despite its revenue reaching AU$436 million. 

IBM with a taxable income of AU$22.9 million and Dimension Data Australia with taxable income of AU$876,000 during the 2017-18 financial year also paid no tax. 

The offenders list also included the supposedly Australian-based, but listed on the Nasdaq, and domiciled in the United Kingdom tech darling Atlassian, which paid zilch in tax, despite earning just over AU$1 billion in revenue during the reporting period and having taxable income of AU$138 million.

ATO deputy commissioner Rebecca Saint acknowledged that since the introduction of the multinational anti-avoidance law (MAAL), the tax agency has seen an uptick in companies paying their share of tax, but also firmly warned that the ATO would target those companies that paid no tax.

"The positive trend we are now observing is that many companies have ceased generating accounting losses and are now offsetting profits by utilising losses from prior years. We expect many companies to exhaust these losses and begin paying income tax in the coming years," she said.

"However, companies that consistently report sustained losses do raise a red flag … We take firm action where we see tax avoidance. There will be no lessening of our efforts to hold multinationals to account."

Under the MAAL, companies operating with an annual global income of more than AU$1 billion in Australia are required to lodge their general purpose financial statements to the ATO if they are not already doing so with the Australian Securities and Investments Commission.

Essentially, multinational companies found to be avoiding tax have to pay back the tax owed, plus a 100% penalty.

The Australian government also legislated a new Diverted Profits Tax (DPT) in March 2017, which is intended to prevent the practice of multinational organisations shifting profits made in Australia offshore to avoid paying tax. The DPT targets multinationals with global revenue of more than AU$1 billion and Australian revenue of greater than AU$25 million with a 40% tax on all profits.

The tax is expected to see AU$100 million in revenue per year -- from 2018-19 -- stay on Australian soil instead going elsewhere.

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.

Related coverage

Facebook Australia bounces back with AU$23.3 million after tax profit

The social network will pay AU$11.6 million in income tax, AU$30.3 million less compared to the year prior.

IBM Australia banks healthy profit bump for 2018

Net profit for Big Blue's Australian arm almost tripled, while the amount of income tax paid sextupled.

Google claims compliance with global tax rules, backs push for international standard

The search engine giant is pushing for a new international tax deal that doesn't discriminate against foreign firms.

Australian Taxation Office says low value GST collection doing better than expected

Over 1,000 companies have signed up for the collection of GST on imported items worth less than AU$1,000.