Australia crackdown on Google taxes seen holding investment risks
where there is no corporate tax. Documents filed with the Australian corporate regulator show that Google's Australian subsidiary paid A$781,471 ($815,074) in tax last year, or about 0.004 percent of revenue, on a net loss of A$3.9 million.
Google Australia's revenues come from service agreements with its US parent company and units in Ireland and Singapore, rather than directly from Australian customers.
"While the day-to-day dealings of Australian firms advertising on Google might be with Google Australia, under the fine print of contracts Australian firms sign with Google, they are actually buying their advertising from an Irish subsidiary of Google," Bradbury said.
Media reports have said the revenue from Google's Australian advertising would be worth more than A$1 billion. A spokesman for Google said in an e-mailed statement that the company complies with all Australian tax laws. The success of governments' tax campaigns against the multinationals is seen hinging largely on whether they can work together.
"It is very important that Australia engages with its counterparts overseas on this reform," said Stacey, of the Institute of Chartered Accountants.
"Otherwise you end up with a nation-state squabble over how to divide up the pie. If Australia increases its tax revenue from a single transaction, that means some other country will get less tax out of that transaction," he said.
He said major nations would need to minimise corporate dealings with low-taxing jurisdictions, such as Ireland and Bermuda.
Another tax expert believes that governments will prevail in their battle to capture more tax revenues. "Those companies like Google and
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