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Australians revolt against Google

by on23 November 2012

Unleash the taxmen

Australia has put the fear of God in Google by making draft revisions to tax laws. This will stop big international firms, especially Google, from shifting their income to countries such as Holland or Ireland where the tax rates are lower.

The move similar to what is being discussed by Britain and Germany who want the G20 group of nations to make multinational companies pay their "fair share" of taxes. There is a general miffed feeling that Google has been exploiting loopholes to shift taxation of their income away from where they are generated.

Australia's Assistant Treasurer David Bradbury said the tax laws were being revised to ensure that companies pay tax on profits made in the country, citing the case of Google Australia. He said that 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.

This a silly concept. But it is then argued that the source of this income and therefore the taxing rights under our tax treaty - would be with Ireland rather than Australia. Australia's company tax rate is 30 percent, compared to Ireland's rate of 12.5 percent. Google Australia would not comment directly on Bradbury's comments, but said it complied with all local tax laws. We guess it is just that at the moment you can drive a bus sideways through those laws.

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