Google Australia Agrees to Changes on International Tax Laws

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By Athena Yenko | June 12, 2014 1:08 PM EST

Google Australia and New Zealand managing director Maile Carnegie believes that changes on international taxation laws should happen soon.

Her comments came ahead of Prime Minister Tony Abbott's key note speech in New York Wednesday where he hints on future crackdown on international companies like Apple and Google.

"Focusing on the system and getting that fixed, feels like a more productive way forward, because that's really what needs to happen. We need the G20, we need the OECD [Organisation for Economic Co-operation and Development], that's where we could put some healthy pressure into getting the ­system fixed." Carnegie said.

Carnegie pointed out that the existing international taxation laws have loopholes and grey areas that create barrier among parties.

Unfortunately, as grey areas were left obscure, international companies like Google were left shamed by accusations of tax evasion - while they bring significant investment in the local economy.

In actuality, Google employs 450 engineers in Australia who takes on work that could be paid cheaper when done in other countries.

In totality, Google employs 900 Australians and paid 70 interns yearly.

"When you add it all together it's a very significant investment and actually the majority of it isn't an investment that needs to be in Australia. I look at over 450 engineers . . . they don't need to be here. Tax is a portion [of a company's contribution] but when you look more broadly at some of the intangibles, there is a lot of stuff that we do that I wish there was a bit more focus on," Carnegie explained.

Carnegie calls out for critics to also highlight the revenue that Google brings to the Australian economy yearly that amounted to $300 million in 2013 and $1 billion over the past years. The company also invests on real states and supports home-grown tech start-ups with Google employees and executives.

"I am actually incredibly empathetic to why people want to talk about this. I get it . . . I completely agree that the ­global taxation system has not kept pace with the [industry] transformation. We're very, very committed. We want a simpler and more transparent taxation system. I would love for all companies and all multinationals and nationals to have a broader definition or broader view for contribution," Carnegie said.

Carnegie thinks that the misunderstanding arises from defining the geography from which a particular product was invented.

"Because of the way we operate they're working with a broader global team. So we don't actually declare what was invented in Australia because it tends to be all part of a global effort," she explained further.

In 2013, Google chairman Eric Schmidt said that changes to international tax laws may result for international companies to be taxed doubly or even quadruply.

The whole discussion with Carnegie will be out Friday on The Australian Financial Review's BOSS.

To contact the editor, e-mail:

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