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Google's tiny tax bill

Sydney Morning Herald logo Sydney Morning Herald 1/05/2014 Georgia Wilkins and Ben Butler
a © Quentin Jones/Corbis a

Google has cut its taxes in Australia to $466,802, despite almost doubling its local profit to $46.5 million.

The company initially received a tax bill of $7.1 million for the year ending December, but only $466,802 will be paid following a series of deductions.

A Google spokesman declined to say whether the company was one of three multinational tech firms being audited by the Australian Taxation Office on suspicion of shifting profits overseas.

The ATO can't name the companies, however the move is part of a global push by tax authorities to crack down on corporate tax-dodging by multinational companies, particularly tech giants.

The Google spokesman also declined to comment on the tax-expense figure, but said the company had paid $7.1 million in corporate taxes ''and $15 million in payroll and other taxes in Australia as part of our investment in a local workforce of over 900 people''.

He said Google believed international forums such as the OECD were the right place to decide tax rules for multinationals ''because everyone would benefit from a simpler and more transparent system''.

Google Australia subsists on services income from its head office in the US and subsidiaries in Singapore and Ireland. Much of the search engine's local ad revenue is collected by the Singapore subsidiary, Google Asia Pacific.

Estimates of its Australian ad revenue reach as high as $2 billion. Its profit here rose to $46 million in 2013 from $26 million a year earlier.

Tax Justice Network representative Mark Zirnsak said the accounts showed the need for further action to ensure companies operating in the digital economy paid their fair share of tax.

''Companies will continue to play different governments off against each other and different tax laws off each other to legally get away with paying no tax anywhere,'' he said.

''Australia should be putting as much pressure as possible on the governments that facilitate this tax-dodging to stop it and, to the degree that it can, look at reviewing where we have tax treaties that allow this behaviour.''

A Fairfax Media investigation this year revealed Apple had shifted an estimated $8.9 billion in untaxed profits from its Australian operations to Ireland over the past decade.

Globally, Google paid $US2.28 billion ($2.46 billion) in 2013 - an effective tax rate of just 15.7 per cent - according to its annual report.

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