Tech Giants Forced to Book Profit in Australia

Recently published financial results of Google and Facebook revealed significantly higher Australian revenue and profit following Australia's implementation of tougher anti-avoidance measures including the Multinational Anti-avoidance Law (MAAL) and the Diverted Profits Tax. The companies acknowledged the new laws contributed towards the large boost in booked revenue.

Google: Doubled Tax Bill

The financial results for Google Australia show revenue of $1.141 billion for the calendar year to December 31, 2016, compared to $498 million in the previous year. The tax bill of Google Australia was $32.9 million for 2016, more than twice the previous year’s $16 million liability.

“During the financial year, the company restructured its business such that it recognised revenue from the selling of certain services and products to Australian-based customers,” Google Australia director John Howell said.

New Service Entity

The revenue increase is mainly attributable to the restructure of the company from a service entity to a reseller and service entity, John Howell informed. The 2016 results included marketing and sales for search engine and online advertising services, which have not been booked in Australia before.

Facebook's Advertising Revenue

Facebook has reported its advertising revenue at $326.9 million, according to its accounts filed with corporate regulator, the Australian Securities and Investments Commission (ASIC)."We reviewed our business model and decided to restructure the Australian operations," the company said in the financial statement.

"Under the new arrangement the company was converted into a local reseller of advertising inventory and concludes all sales contracts with customers managed by the sales team in Australia. These customers will no longer have a contractual relationship with Facebook Ireland," Facebook informed.

Sources: The Sydney Morning Herald, Bussiness Insider, The Australian

 

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