The local arms of Apple, Google, Microsoft, and Samsung Electronics have had their Australian income for the 2015-16 financial year put under the microscope by the Australian Taxation Office (ATO), with the 2015-16 Report of Entity Tax Information revealing the multinationals are paying the appropriate amount of tax.
The ATO report lists over 2,400 Australian public and foreign-owned corporate tax entities with a total income of AU$100 million or more, as well as Australian-owned resident private companies with a total income of AU$200 million or more.
For the year in question, Apple generated AU$7.57 billion on Australian soil, resulting in AU$118 million — 30 percent — of its AU$393 million taxable income being delivered to the ATO.
Similarly, Microsoft, which reported a total income of AU$777 million and a taxable income of AU$141 million, paid AU$42 million in tax during 2015-16; while Samsung Electronics Australia earned a total of AU$2.5 billion, of which AU$12 million was taxable, resulting in AU$3.6 million being paid in tax. Both companies paid the 30 percent tax required in Australia.
Google Australia generated AU$502 million in income locally, and paid 13 percent of its taxable income — AU$122 million — to the ATO, which totalled AU$16 million.
Despite generating a taxable income of AU$23.4 million for the 2015-16 financial year, the local arm of IBM paid no tax, the report shows, with IBM Australia and New Zealand reporting total income of AU$3.6 billion.
It was a similar story for global IT firm Unisys, which generated AU$207 million in income, with a taxable amount of AU$1.5 million; and defence giant BAE Systems, which reported a total income of AU$1.3 billion and a taxable income of AU$35.7 million, yet paid nothing in tax for the year.
Australian startup darling Atlassian, which undertook its initial public offering on the Nasdaq in December 2015, reported income of AU$599.7 million, and despite AU$87.4 million of the income being taxable, the company has no figure registered in the “tax paid” column of the ATO’s report.
“No tax paid does not necessarily mean tax avoidance,” the ATO said. “Even companies with very high total income sometimes make losses … there are many legitimate reasons why this might be the case.”
Last year, in the 2014-15 report, IBM was flagged as earning AU$3.6 million, but again did not pay any tax.
Hewlett Packard South Pacific Pty Ltd earned AU$3.5 billion and Dimension Data Australia Pty Ltd pulled in an income of AU$1.2 billion during 2014-15, yet according to the ATO, neither organisation paid tax in Australia for that period.
In the latest report, Hewlett Packard is not listed, but Dimension Data, with a total income again of AU$1.2 billion, did not report a taxable income, and therefore did not pay tax during the 2015-16 financial year either.
Capgemini Australia, Mastercard Asia Pacific, MYOB, and NEC Australia were also among the list of technology firms that didn’t report a taxable income during 2015-16.
The Australian government legislated a new Diverted Profits Tax (DPT) in March, which is intended to prevent the practice of multinational organisations shifting profits made in Australia offshore to avoid paying tax.
The DPT will hit multinationals with global revenue of more than AU$1 billion and Australian revenue of greater than AU$25 million with a 40 percent tax on all profits.
The new tax is expected to see AU$100 million in revenue per year — from 2018-19 — stay on Australian soil.
The new legislation mirrors one implemented in the United Kingdom, nicknamed the Google Tax after the search engine giant was ordered to pay the UK government £130 million in back taxes.
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