Facebook sent bulk of $1bn revenue offshore, paid just $24m tax

THE local arm of US tech giant Facebook paid just $24m in tax last year, despite raking in advertising revenue of $1.1bn – most of which was sent offshore, according to financial results filed with Australia’s corporate regulator.

Facebook’s advertising revenues surged to $1.12bn for the year ended December 31, according to the company’s latest financial filings, up from $746.6m in 2020. The company also posted a pre-tax profit of $61.1m, nearly doubling from $37.9m a year earlier.

It booked just $24.2m in tax in 2021, up slightly from $20.2m a year earlier, with the majority of the company’s revenue – $949.3m – sent to an offshore subsidiary, for “purchasing advertising inventory”.

That was nearly double the $559m in revenue sent to its offshore subsidiary a year earlier.

“The company pays for advertising inventory to other related parties in accordance with an advertising reseller agreement,” Facebook said in its financial disclosures.

Facebook and Apple have come under increased scrutiny for diverting hundreds of millions of dollars in revenue away from Australia to other jurisdictions.

Last year in July, Australia and New Zealand agreed in principle to a new tax scheme negotiated by the OECD which would come into effect in 2023, and would target 20 to 30 per cent of the net profits of large multinationals engaged in automated digital services, like Facebook.

Some countries currently impose a direct digital services tax but Australia does not.

“During the last financial years, we paid income taxes in Australia at effective tax rates well above 30 per cent and in accordance with local taxation laws,” a spokesman for Facebook’s parent company Meta said in a statement.

“We have called for and welcomed reform on global tax rules by the OECD. We take our tax obligations seriously and we are committed to supporting local communities and businesses in Australia.”

Facebook is currently facing allegations it broke Australian law when it blocked charities, government services and critical health organisations from its platform last year amid bushfires and the pandemic. It was also revealed this week that Facebook had been preparing internally for Australia’s landmark news bargaining code for at least five months, despite later blaming a “technical error”.