Google's $12.7m deduction more than taxes paid
The figures came as the peak body representing global tech firms, including Apple, Google and Microsoft, hit out at the government's efforts to bolster disclosure surrounding the amount of tax they pay here.
The Australian Information Industry Association said the government's efforts to single out global companies when it came to issues surrounding tax was "provocative" and could prompt some players to pull out of the local market, leading to job losses.
Figures revealed Google Australia reported a profit of $22.4 million for last calendar year, the US tech company's first profit here in four years. The result was struck on revenue of $269 million over 2012, accounts lodged with the corporate regulator show.
The reported profit will result in the company handing over $4.2 million to the Tax Office - up from just $74,176 the year before. This is despite industry estimates of advertising sold in Australia reaching as high as $2 billion a year.
The records also showed Google received research and development incentives of $12.7 million.
Frequently Asked Questions about this Article…
Google Australia's accounts show a $12.7 million tax deduction tied to research and development incentives. The company reported receiving R&D incentives of $12.7 million in the year covered by the filings.
Google Australia reported a profit of $22.4 million for the last calendar year on revenue of $269 million for 2012 — its first reported profit in four years, according to lodged accounts.
The filings show Google Australia handed over $4.2 million to the Australian Tax Office, up from $74,176 the year before.
R&D incentives act as a tax deduction that reduce a company's taxable income. In Google Australia's case the $12.7 million R&D incentive significantly affected the net tax outcome reported in the accounts.
The company paid $4.2 million in tax despite industry estimates that advertising sold in Australia can reach as high as $2 billion a year — a contrast the article highlights between ad market size estimates and the tax amount reported.
The peak body representing global tech firms, including Apple, Google and Microsoft, criticised government efforts to increase tax disclosure. The Australian Information Industry Association described singling out global companies over tax as 'provocative' and warned it could push some firms to exit the local market.
According to the Australian Information Industry Association cited in the article, aggressive targeting or disclosure measures could prompt some global firms to pull out of the Australian market, which they say might lead to job losses and reduced local investment.
Investors should note that reported profit and tax numbers can be significantly influenced by deductions like R&D incentives. Public debate and potential policy changes around tax disclosure can also affect company behaviour, presence in the market and potentially local jobs — all factors worth monitoring.
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