Australia says Facebook and Google are paying more local tax

Australia says Facebook and Google are paying more local tax

CANBERRA, Australia — Facebook, Google and other multinational companies are now paying tax in Australia based on their Australian profits instead of shifting income to low-tax countries since the government cracked down on such tax avoidance, the treasurer said Tuesday.

Australia will take in an extra 2 billion Australian dollars ($1.5 billion) in tax from multinational giants in the current fiscal year because of the Multinational Anti-Avoidance Law, which took effect in late 2015, Treasurer Scott Morrison told Parliament.

The government had given the Australian Taxation Office “the power, the resources and the penalties to get the job done,” Morrison said.

“Facebook … are now booking their Australian revenue in Australia, not in Ireland,” he said, adding the multinational companies were abandoning contrived structures and restructuring their models to show sales booked in Australia.

Australian tax authorities were currently conducting 71 audits involving 59 major global corporations, Morrison said.

Facebook did not immediately respond to a request for comment on Tuesday. Google declined to comment.

The law, dubbed the “Google Tax,” targets global companies with annual incomes exceeding AU$1 billion that use financial schemes for the principal purpose of obtaining an Australian tax benefit.

The Australian Taxation Office has the power to charge tax on profits diverted offshore and to fine the corporations an amount equal to the tax evaded.

When the law was proposed in early 2015, the government said there were 30 global corporations that paid little or no tax on the profits from their Australian operations. The government did not name them. Tax officials were posted to the Australian offices of the 30 companies.

The problem, known as “base erosion and profit shifting,” stoked public anger at a time when the global economy was still struggling to recover from the 2008 financial crisis. Critics say it was an example of the powerful being given an unfair advantage, while the companies said they were not breaking any laws.

Rod McGuirk, The Associated Press

Canadian Press

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