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In Australia, Google Pays Just $74k Tax On Claimed Revenues of $200 Million 345

Posted by timothy
from the avoidance-vs-evasion dept.
daria42 writes "Looks like Apple isn't the only company with interesting offshore taxation practices. The financial statements for Google's Australian subsidiary show the company told the Australian Government it made just $200 million in revenue in 2011 in Australia, despite local industry estimating it actually brought in closer to $1 billion. The rest was funnelled through Google's Irish subsidiary and not disclosed in Australia. Consequently the company only disclosed taxation costs in Australia of $74,000. Not bad work if you can get it — which Google apparently can."
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In Australia, Google Pays Just $74k Tax On Claimed Revenues of $200 Million

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  • I beg to differ (Score:5, Insightful)

    by happyhamster (134378) on Saturday May 05, 2012 @12:43AM (#39899411)

    "Taxes are the price we pay for civilization."

        -- Oliver Wendell Holmes, Jr.

  • by Kotakee (2632245) on Saturday May 05, 2012 @12:51AM (#39899447)
    Nobody said there was something illegal going on. It is a legal practice. However, it is really shady practice that Google is purposely doing. They know it, we know it, everyone knows it. Legally speaking they can continue doing it if they so choose. However, it is still morally wrong.
  • Re:Taxes suck. (Score:3, Insightful)

    by Anonymous Coward on Saturday May 05, 2012 @12:57AM (#39899481)

    You know, I'm a bit of a Google Fanboy. If there's a company I tend to forgive, it's Google, but let's dispel a few myths.

    Taxes don't suck. In the US, you let people die in the streets if they don't have a healthcare card. in Australia, we don't. Taxes go to public hospitals, maintaining roads and other social infrastructure and services.

    By Google not paying its fair share, like everyone else, they really are being dishonest - and I disrespect Google for that.

    On the other hand, Facebook is far, far worse than Google.

    Google, just pay your damn taxes like the rest of us. You're starting to develop a bad wrap. No evil?

    AC

  • by grasshoppa (657393) <skennedy@tp n o - c o .org> on Saturday May 05, 2012 @12:58AM (#39899485) Homepage

    What kind of fool of a company would Google be if it DIDN'T exploit every tool the government gives it to minimize it's tax burden? Furthermore, how irresponsible to it's share holders if it didn't utilize the law to achieve the highest rate of return.

    Google is not the villain here. No company is, when it's simply exercising the controls given to it by the government under which it operates.

  • by SuricouRaven (1897204) on Saturday May 05, 2012 @01:19AM (#39899555)
    It goes by many names. Tax avoision, tax optimisation, tax efficiency. Google does it, Microsoft does it, Apple does it... even the optician I use has a token headquarters in the tax haven of Gurnsey. Every major company engages in the practice, and they'd be stupid not to. Making a profit is the reason for their existance.
  • Re:Taxes suck. (Score:5, Insightful)

    by symbolset (646467) * on Saturday May 05, 2012 @01:35AM (#39899629) Journal
    Google makes their money with local ads. It's not unreasonable to expect that they pay local tax rates for local ads in Taiwan bought by local Taiwan businesses and served from local Taiwan servers. That is entirely different from making your software in Redmond, WA, licensing it through a Nevada puppet corporation and then laundering the money through the double-Dutch or Blind Irish mechanisms of financial wizardry to make the profit happen offshore when that same software is sold from Khazakstan to Bangalore, and all the points between.
  • Re:I beg to differ (Score:1, Insightful)

    by Kotakee (2632245) on Saturday May 05, 2012 @01:41AM (#39899655)
    To be frank, middle class is really the best one to tax. The wealthy have the means and ways to avoid taxes. If someone gets in the way, they will rather pack their packs and leave. It's no problem - doing that is a lot cheaper than even the existing taxes they're paying. On top of that by taxing the wealthy you're removing the incentive from people to try and get there, and in turn you will be removing all the good that incentive does. Yes, there are industries and people that get rich by not really contributing to the common good, but overall it works out pretty good.
  • Re:Taxes suck. (Score:2, Insightful)

    by Kotakee (2632245) on Saturday May 05, 2012 @02:02AM (#39899727)

    Google makes their money with local ads. It's not unreasonable to expect that they pay local tax rates for local ads in Taiwan bought by local Taiwan businesses and served from local Taiwan servers.

    Exactly. That is what Google is avoiding. Did you even read the whole thing? It's Google that is using the Double Irish tax trickery to funnel money out of the countries they generate income in.

  • by Andtalath (1074376) on Saturday May 05, 2012 @02:18AM (#39899795)

    No, it follows that there are very few rules for internationeal taxing which actually work.

  • Re:I beg to differ (Score:5, Insightful)

    by geekoid (135745) <dadinportland AT yahoo DOT com> on Saturday May 05, 2012 @02:21AM (#39899809) Homepage Journal

    There is extremely little waste in the US government. fell free to go to the library and look at the accounting numbers. It's public inforamtion. INformation I used to get paid to sift through, and write code to sift through.

    Talking about Taxes is stupid, and it distract from the real conversation. The republican have done a good job seperating taxes out of any value to the conversation.

    Don't talk about taxes. Talk about services. In Oregon, I lot of people value parks, and forests. SO they have services to maintain and protect them. That costs money. It comes from taxes.

    The misinformation and distraction campaign is why we now have people who want taxes cut, and services improved. The same people who get pissed off with police cuts back, the schools systems have layoffs are the same ones that refuse to vote for a tax or bond measure.

    We want to pay less, and you gibe us more. As if the money for services comes from a different bucket.

  • Re:Taxes suck. (Score:5, Insightful)

    by Kotakee (2632245) on Saturday May 05, 2012 @02:43AM (#39899893)
    Just because they didn't break the law doesn't mean they didn't do wrong. There is a difference. For example all those Nigerian scams are actually legal because their law says you can cheat people who break laws. But would you really say that those Nigerian scams are objectively and morally right things to do? I don't think so. Likewise, Google has not done anything legally wrong. Their actions, however, are morally wrong.

    And no, there is no easy solution to this. The ultimate reason why we need these are to allow companies in other countries to do business with companies in another. However, then we have jerks like Google who abuse this by setting up shell companies to take advantage of it and avoid taxes. Again, legally ok, but not morally.
  • Re:I beg to differ (Score:3, Insightful)

    by tftp (111690) on Saturday May 05, 2012 @02:43AM (#39899895) Homepage

    There is extremely little waste in the US government.

    It is very difficult to debate this statement, largely because the statement itself defies belief. For example, are you saying that the whole TSA infrastructure, with their airport gropers and the VIPERs on buses, who steals travelers' belongings and can't see a gun on a passenger, is just fine and we should keep financing it?

  • I think people here don't seem to understand the Australian tax system.
    It is entirely designed to take money from productive individuals and hand it over to corporates, while cutting in the politicians who facilitate this. Then the government proceeds to hand over a few crumbs to the unwashed masses (a.k.a. taxpayers) from the sell-off of natural resources, while avoiding at all cost to invest anything in infrastructure.
    In such context, Google's contribution of $74,000 (which is less than half of the income taxes I pay as an individual Australian resident per year at the marginal rate of 48% for my income from hard work and lots of overtime) can be seen as a generous token, because most corporations seem to pay bugger all and just pocket obscene subsidies instead.

  • Re:Taxes suck. (Score:5, Insightful)

    by kraut (2788) on Saturday May 05, 2012 @04:16AM (#39900257)

    They broke Amazon.

    They'll either break Google (10% tax on gross income) or force Google to make massive political contributions (aka blackmail) like they did for Microsoft.

    For crying out loud: Companies pay taxes on profits, not revenues. If you read the article, "the company made a loss on paper of $3.9 million in that period. Both Google’s revenues and losses were up over calendar year 2010."

    If you a company makes a loss, it doesn't pay taxes. Why should it?

    Now, whether the accounting practices that lead to this loss are kosher or not, I don't know.

  • Re:Taxes suck. (Score:5, Insightful)

    by TFAFalcon (1839122) on Saturday May 05, 2012 @05:03AM (#39900391)

    And that's part of the problem. Since they only pay taxes on profits, they can easily set up a subsidiary in country X (Ireland in this case), where the tax rate is close to zero. Then they have the subsidiary bill the parent company a few billion dollars for nonexistent services. And look, the company is suddenly not making any profit.

  • Re:Taxes suck. (Score:4, Insightful)

    by mjwx (966435) on Saturday May 05, 2012 @05:47AM (#39900509)

    But even then, how is $74,000 tax on $200 million justifiable. Even after all the funneling.

    Good accountants. The tax rate in Oz on my current salary is around the 20% mark, I pay around 18% of my total income due to deductions, it means reducing my taxable income by about $2-4,000 per year, I still earned and spent the money, but it's not taxed because of what I spent it on (phone bills, internet bills, trade publication subscriptions(yes, I deduct /. subscriptions) and more) A good accountant pays for himself in a better tax return..

    But 0.37% tax is taking the piss when the corporate rate should be around 30% ish (educated guess, anyone got the real number, please let us know). I'm guessing they use a crap load of R&D concessions (the 20% time would be tax deductible here I think)

  • Re:I beg to differ (Score:4, Insightful)

    by swalve (1980968) on Saturday May 05, 2012 @08:59AM (#39901205)
    Different definitions of waste. You are saying they shouldn't be spending that money, and are therefore wasting it. What the GP is saying is that for what they decide to pay for, they get their money's worth. And I think that is mostly true.
  • Re:Taxes suck. (Score:5, Insightful)

    by Eskarel (565631) on Saturday May 05, 2012 @09:54AM (#39901431)

    Yes, exactly, we should all run our countries like Ireland. They have no corporate taxes so they must be a bastion of innovation with a booming economy and full employment.

    Oh wait, they have a bunch of shell offices for major corporations which pay no corporate tax and hire one person, they're broke, and they're economy is fucked, let's not.

    It's funny how the neo cons all forgot the Irish. A few years ago they were the country to be idolized if you were a conservative, low corporate taxes, close to zero regulation, everything they believe creates a wonderful economy. Then it all fell in a pile because their unregulated banks, with the help of unregulated US banks, fucked them, and the corporations they didn't tax paid no tax but didn't open up offices to generate other benefits. Now if you talk to a neo con Ireland is just like the other PIGS and must have been a dirty socialist pit with profligate spending habits.

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