Need a tax deduction? Just Google it

Google's Australian arm has received a tax deduction of $12.7 million - about three times the amount it paid in taxes.

The figures were revealed as the body representing tech companies including Apple, Google and Microsoft hit out at the government's efforts to bolster disclosure of 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.

Google Australia, the US tech company's local arm, reported a profit of $22.4 million for last calendar year, its 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 Australian Taxation Office, up from just $74,176 the year before. This is despite industry estimates of the advertising sold in Australia reaching as high as $2 billion a year.

The sudden shift to profit after three years of reported losses comes as the federal government tightens the net around multinational companies that shift profits offshore through low tax jurisdictions, with a Senate inquiry and review under way into profit shifting and tax avoidance.

The records also showed Google received research and development incentives worth $12.7 million - three times as much as it paid in taxes.

The tax minimisation strategies of tech companies such as Google and Apple have come under close scrutiny by the government, which appointed a specialist taskforce to advise Treasury on the risks of erosion of tax revenue and potential solutions. It is expected to release a consultation paper on Friday.

BusinessDay revealed in November that tax authorities had hit Apple with a $28.5 million bill for back taxes, as part of efforts to fight back against tech multinationals using complex ownership structures to avoid paying tax.

A Google spokesman would not comment on the government's push to curb tax avoidance schemes, but said international organisations such as the OECD were "the right forum for discussion of these issues, and we will continue to co-operate with the work of those organisations".

Although Google Australia is US-owned, profits from subsidies travel through low-tax jurisdiction Ireland and tax haven Bermuda before landing in the US.