Tech­nol­ogy gi­ants de­fend tax poli­cies at Aus­tralian hear­ing

The China Post - - WORLD BUSINESS -

Global tech­nol­ogy gi­ants Ap­ple, Google and Mi­crosoft on Wed­nes­day de­fended their cor­po­rate tax struc­tures at an Aus­tralian par­lia­men­tary hear­ing, re­buff­ing claims they were shift­ing their prof­its off­shore to avoid pay­ing taxes in the na­tion.

The three firms also told the Aus­tralian Se­nate in­quiry into cor­po­rate tax avoid­ance, which held its first day of hear­ings in Syd­ney, that they were among 12 tech­nol­ogy com­pa­nies be­ing au­dited by the Aus­tralian Tax­a­tion Of­fice.

There have been in­creased ef­forts by gov­ern­ments around the world, in­clud­ing Australia, to crack down on multi­na­tional firms that use com­plex cor­po­rate struc­tures to lower their tax bills.

The Euro­pean Union last month un­veiled an am­bi­tious plan to force its 28 mem­ber coun­tries to share de­tails of any tax deals agreed with some of the world’s big­gest com­pa­nies.

“The Aus­tralian public don’t ac­cept that the struc­tures that are be­ing cre­ated by th­ese com­pa­nies are nec­es­sar­ily gen­uine and there is a strong sense out there that com­pa­nies such as yours ... also have a great moral and so­cial re­spon­si­bil­ity to give more back to this com­mu­nity,” the hear­ing’s chair Sam Dast­yari said.

There was a gen­eral per­cep­tion, he added, “that the struc­tures that have been cre­ated within your firms, be it through Ire­land or Sin­ga­pore or through the U.S. ... have been de­signed to min­i­mize your tax obli­ga­tion in this coun­try.”

The firms’ rep­re­sen­ta­tives said they were pay­ing all the taxes they owed un­der Aus­tralian law.

The in­quiry heard Google Australia in 2013 made AU$358 mil­lion (US$275 mil­lion) in in­come, gen­er­ated prof­its of just over AU$46 mil­lion in profit and paid AU$7.1 mil­lion in tax.

Google’s Australia and New Zealand man­ag­ing direc­tor Maile Carnegie told the in­quiry she could not re­veal how much rev­enue in to­tal was gen­er­ated in the coun­try.

But she said some of the rev­enue gen­er­ated in Australia such as from ad­ver­tis­ing was booked in Sin­ga­pore, its Asia-Pa­cific head­quar­ters, which has lower tax rates.

Ap­ple’s Australia and New Zealand man­ag­ing direc­tor Tony King said his firm last year re­ported rev­enue in Australia of AU$6 bil­lion and gen­er­ated a net profit of AU$250 mil­lion for a tax bill of about AU$80 mil­lion.

“We haven’t shifted any prof­its. We booked all of our rev­enues here, all of our costs,” King added.

Mi­crosoft’s global tax chief Bill Sam­ple said a large chunk of the rev­enue gen­er­ated in Australia was taxed in Sin­ga­pore.

“AU$2 bil­lion in (Aus­tralian) soft­ware prod­uct and ser­vices rev­enue booked in Sin­ga­pore and a lit­tle over a AU$100 mil­lion of con­sult­ing ser­vices rev­enue booked in Australia,” Sam­ple told the in­quiry.

Australia made closing cor­po­rate tax loop­holes and en­dors­ing a com­mon re­port­ing stan­dard to in­crease trans­parency a key fo­cus of the G-20 meet­ings last year when it as­sumed the ro­tat­ing pres­i­dency.

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