Tax

Google to pay ATO $480M


Denham Sadler
Senior Reporter

Google will pay the Australian Taxation Office more than $480 million after settling its 10-year tax dispute.

The dispute relates to Google’s tax practices in Australia from 2008 to 2018, and is part of the ATO’s wider efforts to force global tech firms to pay more tax in Australia.

Google has agreed to pay $481.5 million to the ATO, on top of previous tax payments, but without an admission of liability.

ATO deputy commissioner Mark Konza said this is “another great outcome for the Australian tax system”.

“It adds to the significant successes of the ATO in positively changing the behaviour of digital taxpayers and significantly increasing the tax they pay in Australia,” Mr Konza said.

The work was conducted by the ATO’s Tax Avoidance Taskforce, which will be running for another four years.

“The extension of the taskforce until 2023 will ensure that the ATO is able to continue to pursue these issues and provide assurance to the community that we are doing everything in our power to protect Australia’s tax base,” Mr Konza said.

The ATO has now settled tax disputes with Google, Microsoft, Apple and Facebook, with its wider campaign now having netted $1.25 billion in total.

The Multinational Anti-Avoidance Law, which come into effect in 2016, requires companies with annual global income of more than $1 billion to lodge their general purpose financial statements to the ATO, and requires them to pay back any tax they are found to have avoided plus a 100 percent penalty.

The law has seen $7 billion in taxable sales being returned to Australia, with over $1 billion return as part of back tax assessments.

The dispute with Google stemmed from the company’s former practice of billing Australian customers through its Singapore branch, meaning it made little or no profit in Australia. Google restructured its operations following the introduction of the tax avoidance laws.

A Google spokesperson said the settlement relates to a “longstanding dispute” and it will “provide certainty in relation to future tax treatment”.

Prime Minister Scott Morrison recently signalled his intent to enforce tougher taxation on global tech giants like Google, labelling them “significant offenders”.

“What occurs in consumer law, what occurs in taxation law, should occur in the digital world as much as it does in the real world,” Mr Morrison said.

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