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Australia targets Google in tax law amendment

An Australian tax amendment is hoping to close loopholes which large companies like Google routinely use to circumvent tax laws and keep from paying.

Australia is one of many nations (including the United States) which suffers from loopholes in tax laws which allow multinational corporations to not pay taxes. Certain countries, such as Luxembourg and Ireland, have lower corporate tax rates than others, and so, it is becoming common practice for large corporations to have their corporate headquarters in these nations, even though their largest offices and bulk of operations are stationed elsewhere.

Google for example, has it's financial headquarters in Ireland, and any sales made in Australia are actually going through the Irish office, and thus subject to Irish taxation, and not through Google's local presence. According to Reuters, a new tax law revision would force companies doing business in Australia to be subject to local laws on local sales. In other words, if Google makes a sale in Australia, then that sale is subject to Australian taxation.



The new law revision would raises the taxes Google has to pay from 12.5% to 30%, more than doubling it. Google states that the company is abiding by all laws(and they are; that's how loopholes work), and that they are contributing to the Australian economy: "We make a significant contribution to Australia's economy by helping thousands of businesses grow online, providing services to millions of Australians at no cost, as well as employing 650 people locally," said a spokesperson for Google.


This news comes shortly after several multinational companies came under fire in the UK for the same reason. The UK and Germany have both announced plans to lobby for a change in international tax laws to ensure that companies pay their fair dues.

David F.
A grad student in experimental physics, David is fascinated by science, space and technology. When not buried in lecture books, he enjoys movies, gaming and mountainbiking

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