Google coughs up $481.5M in Australian tax dispute settlement

Google has settled its tax dispute with the Australian Taxation Office (ATO), paying an extra $481.5 million on top of its previous tax payments.

Google is the latest tech giant to reach such a settlement, joining Microsoft, Apple and Facebook, which have all publicly stated that they have settled their tax affairs with the ATO.

According to the ATO, the result brings the increased collections made against taxpayers in the e-commerce industry to around $1.25 billion cash.

“Thanks to the efforts of our ATO officers under the Tax Avoidance Taskforce and the introduction of the Multinational Anti-Avoidance Law (MAAL), Australian sourced sales by these digital giants will now be returned to Australia’s tax base,” the ATO said in a statement.

The ATO said the operation of the MAAL has seen $7 billion in taxable sales being returned to Australia, and the appropriate profit of these activities taxed, in Australia for the first time. It has also led to the resolution of cases which had over $1 billion in back tax assessments,” 

“It adds to the significant success of the ATO in positively changing the behaviour of digital taxpayers and significantly increasing the tax they pay in Australia,” Deputy Commissioner Mark Konza said.

“The extension of the Taskforce until 2023 will ensure that the ATO is able to continue to pursue these issues and provide assurance to the community that we are doing everything in our power to protect Australia’s tax base.”

Microsoft, along with Apple and Google, were placed under scrutiny by the ATO and the Federal Government in 2017 over their tax practices in Australia dating back to at least 2012 in some cases.

Recently Microsoft New Zealand settled a long running tax investigation for $24.7 million with Inland Revenue over international transfer pricing.

In October, newly proposed rules will give governments on a global scale more power to tax big multinationals like Google, Apple and Facebook doing business in their respective countries under a proposed overhaul of decades-old rules.

Big internet firms have pushed tax rules to the limit as they can book profit and park assets like trademarks and patents in low tax countries like Ireland.

The drive for a global rule book has received new urgency as countries unilaterally adopt plans for a tax on digital companies over frustration with current rules.

This year more than 130 countries and territories agreed that a rewriting of tax rules largely going back to the 1920s was overdue and tasked the Paris-based Organisation for Economic Cooperation and Development (OECD), of which Australia and New Zealand are member countries, to come up with proposals.