Global technology giants Apple Inc, Google Inc and Microsoft Corp yesterday defended their corporate tax structures at an Australian parliamentary hearing, countering claims that they were shifting their profits offshore to avoid paying taxes in the nation.
The three firms also told the 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.
“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,” Australian Senator and hearing 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 US ... 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 A$358 million (US$276 million) in income, generated profits of just over A$46 million in profit and paid A$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.
However, she said that 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 A$6 billion and generated a net profit of A$250 million for a tax bill of about A$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.
“A$2 billion in [Australian] software product and services revenue booked in Singapore and a little over a A$100 million of consulting services revenue booked in Australia,” Sample said.
Australia made closing corporate tax loopholes and endorsing a common reporting standard to increase transparency a key focus of the G20 meetings last year when it assumed the rotating presidency.
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