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Executives from Google, Apple and Microsoft have defended a loophole that allows a large portion of revenue made in Australia to be taxed abroad.
The benefit of this is that companies are able to pay a lower percentage of tax using this loophole. For example, the majority of Google’s Australian revenue was taxed in Singapore as its Australasian branch provides sales and marketing services to that region, reports Mashable.
Maile Carnegie, MD of Google Australia and New Zealand, said she could not share the company’s Australian revenue, but she did tell the Senate inquiry into corporate tax avoidance that in 2013 Google had paid $1.7 million in tax on $46 million profits.
Bill Sample, corporate VP for worldwide tax at Microsoft, said: “Products and services sold to Australia are sold by our Singapore group, sales people primarily located in Singapore, our customers are billed by the Singapore group.
“So consulting services revenue is reported in Australia and non consulting services and software revenue is billed and accounted for on out Singapore books.”
Apple was also in the line of fire, as Antony Ting from the university of Sydney pointed out that if the company were to sell an iPad for $600, around $550 would be taxed in Ireland, and about $220 of the $550 wouldn’t be taxed at all.
Fairfix Media reported that in 2014, Apple paid $80 million in tax on revenue of $6 billion.
All three companies are being audited by the Australian tax office.
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