We are not under siege on tax, Google claims
In November, Assistant Treasurer David Bradbury took the unprecedented step of criticising by name two US technology companies, Google and Apple.
Google Australia claims it paid tax of $781,000 in 2011 on its estimated revenue of at least $1 billion. But its accounts show the tech giant paid a little more than $74,000 in tax.
"If enormous multinational corporations aren't paying their fair share of tax on economic activity in Australia, then that's not fair game," Mr Bradbury said at the time.
An expert panel set up by Mr Bradbury has recommended changes designed to make public more information about how much tax is paid by multinationals. But on Wednesday the managing director of Google Australia and New Zealand, Nick Leeder, said: "We don't feel particularly under siege. We understand the issue and it is an important issue."
He said the issue could only be resolved through international co-operation and Google looked forward to working with the Organisation for Economic Co-operation and Development, which has called for an overhaul of international tax laws.
"We understand there is an issue around the world and it is one that requires co-operation from different countries," Mr Leeder said. "You can't solve this issue one country at a time. I think the OECD is exactly where this issue needs to be dealt with."
In a report published last week blaming "profit shifting" for eroding the tax base, the OECD warned that the practice "constitutes a serious risk to tax revenues, tax sovereignty and tax fairness" around the world.
Frequently Asked Questions about this Article…
The article reports that Assistant Treasurer David Bradbury publicly criticised Google (and Apple) over tax minimisation. Google Australia said it paid about $781,000 in tax in 2011 on estimated revenue of at least $1 billion, while its accounts showed it paid slightly more than $74,000. Google’s local managing director, Nick Leeder, rejected the idea the company was “under siege” and said the issue needs international cooperation to be resolved.
Governments around the world are talking about cracking down on tax minimisation and the OECD has warned that profit shifting erodes tax bases. For investors, this can create regulatory and reputational risk for affected companies, potential changes to corporate tax bills, and increased investor scrutiny — all of which can influence valuations and returns over time.
No. Nick Leeder, managing director of Google Australia and New Zealand, said the company does not feel particularly under siege. He acknowledged the issue is important and said it needs to be addressed through international cooperation, particularly via the OECD.
According to the article, the OECD has called for an overhaul of international tax laws and published a report warning that profit shifting poses serious risks to tax revenues, sovereignty and fairness. Google said it looks forward to working with the OECD, which it sees as the forum where these cross-border tax issues should be resolved.
The expert panel established by Assistant Treasurer David Bradbury recommended changes designed to make more public information available about how much tax multinational companies pay. The goal is greater transparency around multinational tax payments in Australia.
Investors should look at both company statements and the official accounts or filings. The article highlights a discrepancy between Google’s public comment about paying roughly $781,000 and its accounts showing about $74,000, so it’s prudent to verify tax figures in formal financial reports and regulator filings when assessing a company’s tax position.
The article notes governments are signalling tougher action on tax minimisation and the OECD has recommended an overhaul of international tax rules. While it doesn’t predict specific outcomes, such reforms could change how multinational profits are taxed and potentially increase the tax burden for some companies if rules are tightened.
Investors should monitor developments from the OECD on international tax reform, government responses to expert-panel recommendations (such as increased public disclosure requirements), company tax disclosures in annual reports, and any regulatory actions or comments from treasury officials — all of which can affect corporate tax risk and investor expectations.
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