US tech giants Google has announced it will lodge an objection in relation to tax amendments issued by the Australian Taxation Office – in which it alleges that the company owes billions in unpaid taxes. The Australian Taxation Office (ATO) has tightened its policy over with regards to the amount of tax multinational conglomerates that operate in the country pay.
In December, the ATO issued a public statement in which it disclosed that it was pursuing seven global organizations over $2 billion in unpaid tax. While the ATO has not publicly named Google, it is now evident that Google is one of the companies the ATO is going after – but the US firm is adamant that it will challenge the decision by the ATO, who amended initial tax assessments.
Google’s Australia unit has stated in accounts filed with the Australian Securities and Investments Commission that it will officially ‘lodge an objection’ to the tax demand from the ATO. In a brief financial statement released by Google on Friday, the firm emphatically refuted the claim that it owed millions in unpaid taxes. The statement read, “Google will continue to uphold its positions against any and all such claims.”
The global search giant declined to disclose how much the ATO had demanded in unpaid taxes, whilst the ATO has also adopted a similar approach when quizzed on the circumstances surrounding the row. In April, Treasurer Scott Morrison claimed that Australia expected to reclaim around $2.9 billion from conglomerates under new legislation that was passed by the government. The ‘Multinational Anti-Avoidance Law’ was amended in December, and in addition to the legislation amendment, the ATO introduced a series of new guidelines for foreign trading hubs.
Google Australia restructured its operators effective January 1st of last year in order to comply with the amended legislation – and its financial statement reveals an increase in revenue and tax for the 2016 calendar year. Google’s revenue surged significantly from $498m in 2015 to $1.14 billion in 2016, while the total income tax rose to $16m, which represented another dramatic increase from $2.8m the previous year.
Google isn’t the first US technology company to find itself in hot water with tax sheriffs. Apple was embroiled in a tax row in Ireland late last year, when the European Union (EU) ordered the firm to pay back €13billion in unpaid tax.
Incredibly, the Irish government disputed the EU’s decision and confirmed that Apple was compliant to Irish tax legislation. It sparked outrage amongst Irish taxpayers, incensed at its government’s refusal to claim back-taxes from Apple - following years of severe austerity measures that were implemented following the global recession in 2008.
