Senior Australian government sources say it will prove to be the biggest tax lurk in history; the erosion of the global tax base by the giants of the digital economy, the likes of Google and Apple, Microsoft and Facebook.
Australia, under long-term budget pressure due to the ageing population, is arguably missing out on hundreds of millions of dollars in tax revenue each year. It's worth noting, however, that there are few reliable estimates, and a Treasury paper last year
questioned whether there were yet widespread losses due to so-called "base erosion and profit shifting" (BEPS) here.
Certainly the playing field is uneven for the media industry, which, amid a painful transformation, is crying foul as tech giants hoover up more and more advertising revenue -- billionaire Kerry Stokes, for example, demanded federal government action, saying Google was
"a fine company doing a good job, except I would like them to pay their fair share of tax''.
Last week we learnt Google, with some 900 employees here, paid just under $500,000 in income tax
, after deductions, in 2013. That's on reported profits in Australia of some $47 million. Escaping the tax net completely was the vast bulk of Google's local business, an estimated $2 billion of sales to Australian customers by Google's online advertising business Adwords, a registered business name of a private Singapore company, Google Asia Pacific Pty Ltd. That's wholly owned by Ireland-based Google Ireland Holdings.
asked Singapore authorities how much tax Google paid in Singapore. We'll keep you posted.
Adwords' Australian revenue is estimated, because Google does not release sales figures, but it's said to have a 95% share of the search and online directory market here, which monitors IAB put at $2.1 billion last year and rising ...