Senator BRAGG: Turning to your tax affairs, how much corporate tax did Google pay in Australia last year?
Ms Silva : Last year Google paid $59 million in tax, and we comply with the tax laws of the land. We restructured our business in 2016 in line with the government’s shift and the change to MAL, the multinational anti-avoidance law. We shifted to a reseller model from then, and last year’s tax was $59 million.
Senator BRAGG: $59 million in corporate tax?
Ms Silva : $59 million in corporate tax.
Senator BRAGG: What’s your revenue in Australia?
Ms Silva : The gross revenue was $4.8 billion, and the profit before tax was $134 million.
Senator BRAGG: $4.8 billion, and you paid $59 million in corporate tax.
Senator Andrew Bragg was an accountant by profession before he entered into the parliament as a NSW Liberal senator. So I’m going to go out on a limb here and suggest that he probably knows full well the difference between revenue and profit.
What I want to do here is point out two other implications of that exchange:
- 59/134 = 44.03%. Google’s effective tax rate is well above the statutory tax rate of 30%. This is a manifestation of something called the book-tax income gap. This gap is reconciled in the notes to annual financial statements that each company has to produce every year. To suggest, however, that Google is doing anything dodgy based on those figures, however, is profoundly misleading.
- 134 – 59 = 75. That is how much money Google made in Australia after tax, $75 million and that’s Australian dollars. So a mere US$60 million (approx). I wish I had US$60 million, but to put that number into perspective Google’s parent company is a US$1.2 trillion company. US$60 million might make it onto their books as a rounding error.