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Australia pressured to allow Google tax-free universe

by on03 December 2012

Business community wants to keep stuffing up the country

Australia might have opened a can of worms when it came to reigning in the search engine Google. Aussie politicians, like many throughout the world, have been getting miffed that Google makes a shedload of dosh in its country and does not pay much tax, thanks to pretending that does its business from Ireland.

Australia has announced a crackdown on tax practices that big firms use, legally, to shift income to countries with low tax rates such as Ireland and the Netherlands. Britain and Germany are also looking at ways to make sure multinational companies pay what they view as a fairer share of taxes. But pressure is coming on governments to allow the big multinationals a get out of jail free card. They argue that such moves will discourage foreign companies from investing in the country.

Paul Stacey, tax counsel at the Institute of Chartered Accountants warned that Australia is being increasingly seen as a high sovereign risk country on taxes. But we wonder what the Aussies have to lose. After all if Google is not paying hardly any tax in the country, why should they care that the company is taking its business elsewhere?

Google's Australian subsidiary paid $815,074 in tax last year which was only 0.004 percent of revenue. What is worrying that if this sort of pressure on government's continue, they will back down on corporate tax reform.

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