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Google Hit with Huge Tax Bill in Australia

Google Hit with Huge Tax Bill in Australia

Google has paid close to $133 million in tax in Australia for 2019, settling the back taxes it owed the Australian Taxation Office (ATO).

According to Justin Hendry from itnews, following the filing of financial documents earlier this week, “the company’s tax bill came in at $59 million last year, though with a $50 million adjustment for previous years, the total came to just over $109 million.”

Hendry writes, “the jump in income tax payable saw the company's profit after tax fall to just $34 million for the year, down from $129 million in 2018.”

“Actual tax paid during the year, however, was $133.5 million, significantly more than the $91 million paid in 2018,” Hendry adds.

Furthermore, Google showed that its profits for 2019 dropped to $134 million from $156 million in 2018, and the company’s annual total revenue saw a boost to $4.8 billion from $4.2 million a year earlier as a result of added advertisement and services such as Google Cloud.

Google has been targeted in Australia by the ATO due to the company reporting low financial figures and lessening its tax contribution to the country.

Last year, after a drawn-out audit process covering the period from 2008 to 2018, the American tech giant settled a dispute amounting to $481.5 million with the ATO in addition to taxes already paid.

Australia to Charge Tech Giants for Publishing News

Australia to Charge Tech Giants for Publishing News

This news comes while Australia aims to be the first jurisdiction in the world to force tech giants to pay publishers for distributing their news.

As reported by the Sydney Morning Herald, the Australian Competition and Consumer Commission (ACCC) “prepares to create a mandatory code of conduct that would govern the commercial relationships between internet platforms and media companies,” one that “is likely to result in Google and Facebook being forced…to pay publishers including Rupert Murdoch's News Corp, and Nine Entertainment Co.”

Nine Entertainment Company’s CEO, Peter Costello, believes tech giants such as Google and Facebook should be paying content creators and publishers for using and benefiting from their material.

“If anyone wants to negotiate with Facebook and Google, they can – we’re not against that – but the best way of addressing this problem would be an industry solution, where you sit down and try to estimate the value that Google and Facebook are getting from the use of this material. We think it’s $600 million a year,” Costello said.

“They are essentially using the product which is created by news organisations without paying for it,” he said, adding that the firms are “using it to boost their own revenues and taking the advertising which otherwise would go to support that journalism.”

News Corp Australia’s CEO Michael Miller agreed with Costello but believes the sum should be higher than $600 million.

"I am aligned with Mr Costello's strong call that the tech companies must pay for the news content they take and profit from," he said in a statement to the press.

"Our modelling suggests the figure is much higher than $600m and former senator Nick Xenephon, whose advocacy sparked the ACCC inquiry into the platforms, has nominated $1 billion.”

American tech giants, of course, have opposed this move by the Australian government.

Mel Silva, who manages Google’s Australia operations, opposed this proposal, explaining that, “in the offline print world, publishers have long paid retailers, newsstands and kiosks to distribute their newspapers and magazines – acknowledging the value of acquiring audiences to a publishers’ content and the advertising publishers sell alongside it.”

“In contrast, Google Search sends readers from Australia and all over the world to the publishers’ sites for free – helping them to generate advertising revenues from those audiences and convert them into paying subscribers. The traffic we send has substantial value,” Silva added.

According to the Bangkok Post, Google and Facebook “also insist they have invested millions of dollars in initiatives in helping Australia's struggling news industry.”

This proposal by the Australian government is expected to be issued in July and will also include “the sharing of data, and the ranking and display of news content, to be enforced by binding dispute resolution mechanisms and penalties.”