Google Inc Australia Accused of Paying Less Than $500,000 in Tax Despite $46.5 Million Profit

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By Reissa Su | May 2, 2014 1:57 PM EST

Google Inc in Australia will only pay less than $500,000 in taxes despite doubling its profits in the country with $46.5 million. The Australian Tax Office has billed the international search engine giant company with $7.1 million for the year ending Dec 31. However, after tax deductions were made, the final bill was $466,802, according to a Fairfax Media report.

Reuters
A neon Google logo is seen at the new Google office in Toronto, November 13, 2012.

Despite the increase in tax bill after a political backlash against Google Australia, the amount owed to the Australian Tax Office is only 15 per cent of its profits in the country which doesn't count the company's search business.

According to tax information, in 2013, the company recorded revenues of $357.7 million. Google Australia's revenues have increased by $90 million from $269 million. Its profits were up at $46.5 million from $22.4 million in 2012.

Google Australia does not include the revenues from its search business which was estimated to be between $1 and $1.5 billion annually in Australia. Customers of Google's search business are billed in Singapore for tax purposes and not in Australia. This would mean Google's corporate tax bill is a small fraction of its total profits.

Governments around the world have focused on technology companies Google, Apple Inc and Amazon for not paying the correct and fair share of tax. Google Australia was the subject of political backlash and public scrutiny in 2011 by the previous administration and current Coalition ministers.

Google denies tax report

Google Inc rejects reports of paying less than $500,000 in Australian taxes. Google Australia, which employes 900 people including 450 engineers, denied the report and said the company paid $7.1 million in corporate taxes and $15 million in payroll and other Australian taxes. The spokesman for Google said the amount it paid was after deductions.

Mark Zirnsak, a spokesman for the Tax Justice Network, said that more action is needed so companies in the digital economy will be subject to pay fair taxes.

A  Google spokesman declined to comment on reports that the company might be one of the three multinational tech companies being investigated by the Australian Tax Office for shifting profits in other countries to avoid paying bigger local taxes.

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(Photo: Reuters / )
A neon Google logo is seen at the new Google office in Toronto, November 13, 2012.
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