From The Australian;

“GOOGLE has paid no tax on an estimated $940 million in web search advertising revenue generated locally, instead routing its Australian online ad sales through an Irish subsidiary, Google Ireland.”

“This week, Google Australia reported a net loss of $3.9m on operating revenue of $201m for the year ended December to the Australian Securities & Investments Commission.”

So Google strips $940 million in advertising revenue from Australian businesses to promote their companies primarily within Australia, to sell to primarily Australian consumers, and it then pays $74,000 dollars in corporate tax.

It claims it has complied at all times with Australian tax laws.

I get uncomfortable about rhetoric but surely this is an assault on our national sovereignty.

My question is when are we going to get off our backsides and change those laws to take into account the way business is conducted in the modern world?

And when are we going to pull companies up when they claim 'We pay taxes through the income tax of our workers.'?

We need to be saying; No you don't. Your workers charge you a fee for services and out of that he/she relinquishes a portion to pay for their share of taxes. All you are is a facilitator. Your company's responsibility to our nation is met by its company tax obligations. Shirk them and we will come after you.

Not good enough Google!

I actually agree with you on this one Csteele and I raised the Google
tax issue on another thread, just a few days ago.

Its not just Google either. A number of American software and hardware
companies have worked out how to transfer price their profits clean
out of Australia and to places like Ireland, where they pay very
little tax. The internet is making it simple for them.

One would think that we have some tax officials who can address
the issue and change the legislation as required, but apparently
not. Clearly we are not smart enough.

A company like BHP already pays around 6 billion $ in tax here,
banks pay a fortune too. IMHO all companies benefitting from trade
in Australia should pay their share, not just those which are
easy to target.

To csteele I don't know where you got the information,I'm not so good to get on that material.I really shocked that Google is cheating big and the Australian legislation had allowed them to do such thing.
Hope they get nail by the tax office.
I'm sure that is not the only company, legally probably, cheating!
Ciao

Dear Yabby,

I suppose it is not just the multinationals who partake in this. It was quite a sight seeing Andrew Forrester banging on about the Super profits tax when his company Fortesque Metals had yet 'to write the tax department a cheque for tax owed'.

How on earth did these guys skew the debate so much that large numbers of people view this kind of behaviour as just smart business practice?

Every dollar not paid by these entities means more that we have to find from our own pockets. Lets say Google should have been up for $200 million in tax on the $980 million in revenue it earned, that means every man woman and child in Australia has had to find an extra $10 to cover the sods.

Not good enough by a long shot.

Dear luigi gigi,

The report was in the Australian Newspaper and can be found here.
http://www.theaustralian.com.au/australian-it/tax-office-at-a-loss-as-to-googles-finances/story-e6frgakx-1226345203723

*Fortesque Metals had yet 'to write the tax department a cheque for tax owed'*

Indeed csteele, but in this case what is going on is fully documented
and explainable and does not involve overseas transfer pricing.
Whilst Fortesque have one mine shipping out iron ore to the tune
of 50 millions tonnes, they have a massive expansion programme
going on, developing a few more mines, building railways etc, to
take their production to 150 million tonnes within the next year.

That is employing thousands of people and the infrastructure is
there for all to see. Fortesque are also borrowing billions to
fund it all. Last time I checked, these expenses were a legitimate
tax deduction and so they should be. That is quite a different case
from overseas transfer pricing.

I will take this issue seriously, only when I hear those people who cry "tax avoidance" at major multinationals, volunteer to pay GST on the stuff they buy on the internet.

They are operating within the law, in the same way that Google is operating within the law.

*only when I hear those people who cry "tax avoidance" at major multinationals, volunteer to pay GST on the stuff they buy on the internet.*

Actually Pericles, that would not concern me in the slightest.
In fact most of these companies have Australian websites and
charge Australians GST anyhow. Just go an buy an Ipad from
Apple and you will be charged GST. But the Ipad will be shipped
direct from Chenzen. Most of the stuff that I have bought on
the internet from overseas, has been about availability, price
is only one consideration and 10% is simply not worth worrying
about. Some electronic gear is a bit different, where I've bought
things from Hong Kong for 50 bucks, which the locals want to
charge 200$ for. I'll happily pay the GST on the 50 bucks.

Dear Pericles,

An interesting take.

Since I am yet to purchase anything overseas via the Internet will you allow me a license to continue to whinge?

I suppose the easy answer is that most of those buying from overseas have at least met their primary tax obligation by paying income tax first. By any fair measure Google has not. Yet they have over 500 workers here, they use our roads and other services while our police, army and government provide a relatively stable and well off clientele for them to profit from.

While Google may indeed be operating within the letter of the law, or more accurately a loop hole, they are certainly not acting within the spirit of the law. The sooner the inadequacy is addressed the better.

I think the issue needs to be taken seriously by all Australians but most particularly our law makers.

Don't you think, csteele, that google is at least as valuable to us all as the Roman Catholic Church, that pays no tax on its eight billion [yes billion] dollar annual profits? Or the Uniting and Anglican churches whose profits exceed two billion annually, and all the other religious corporations whose vast profits are not subject to tax? They don't even pay rates, making every citizen's rate and tax bills more expensive!

Dear ybgrip,

Not sure I can argue with you on that score though I suppose some of the religious charities do have a role in feeding and clothing the under-privileged. I was also going to include educating them but I concede Google has a claim to that space as well.

I'm wondering if this is a kind of growing modern American sensibility. Google’s founders are relatively young but tax avoidance/minimization is certainly a huge theme within the company.

We read also this week of one of the founders of Facebook deciding to renounce his US citizenship and take up residence in Singapore to avoid a $600 million dollar tax bill when the company is floated.

It screams of a me-ism that I find pretty alien and depressing. But perhaps I'm getting old.

Few religious charities spend their corporation’s money, they are funded from the public purse. Charity status is decided by the government, and they give automatic preference to organisations that believe in an invisible supernatural overlord—no matter how bizarre. That’s why so many genuine charities are unable to access the tax-free and government subsidised status of the religious ones, that too frequently cherry pick their recipients. When the economic crunch arrived, the Anglicans announced a reduction in their charitable work because it would have cut into their profits, which remained the same.
I don’t think humans have changed at all over the millennia. That’s what we are—looking after number one. We’d be extinct as a species if we hadn’t. The scene’s changed but the impulse remains. Grabbing all the profits without paying for them is traditional, did the English colonisers pay for Australia? New Zealand? They’re paying for much of Africa and India and Pakistan now, but that’s a different story. Who got the wool profits? Who’s getting the mining boom profits? Not the common folk. There’s no difference between tax avoidance and Palmer raking in billions just because he ‘owns’ the right to mine all over Queensland.

More nefarious dealings on behalf of IT companies.

Apple it seems is on a mission to escape the 30% tax on profits in the US. In 2009 it paid 24.8% which I could almost live with. By 2010 it was 14.7% then last year it had fallen to 9.8%.

Next was a story on Huffington Post about Yahoo.
"Yahoo's interim CEO Ross Levinsohn said the stake sale provides clarity for Yahoo shareholders. Levinsohn stepped into the role earlier this month after Yahoo cast aside CEO Scott Thompson because his official biography included a college degree that he never received."

"Thompson had been working on a complex deal earlier this year that would have allowed Yahoo to escape taxes, but it fell apart. The deal announced Sunday is taxable."

Why is this so matter of fact? Surely this sort of behavior should be condemned in any democracy. Why isn't it?

@cseteele:- Why is this so matter of fact? Surely this sort of behavior should be condemned in any democracy. Why isn't it?

Because 95% of humans would do the same thing if they could.