ChannelLife NZ - Google NZ's $371,799 tax on $14.9 million revenue

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Google NZ's $371,799 tax on $14.9 million revenue

Google’s Kiwi tax bill rose for the last financial year – but it’s unlikely to be causing undue stress for the multinational giant, with its Kiwi subsidiary also clocking up greatly improved revenue, and a local profit.

Financial statements show Google New Zealand racked up revenue of $14.9 million in the year to 31 December 2014 – up 47% from 2013’s $10.1 million.

While those figures are a significant increase on previous years, they are unlikely to reflect the true figure Google's parent company receives in advertising sales from New Zealand, with most SMB clients self-servicing, directly to the website and not counted in the New Zealand figures.

New Zealand profit for 2014 was also up significantly, with the company recording profit after income tax of $160,253, after last year’s loss of $60,389.

Meanwhile, on the tax front, the company paid $371,799, an increase on 2013’s $213,597 tax bill.

The company’s revenue was instead eaten up by ‘service fees’ to its parent company and other ‘related parties’ who received $6.5 million and $8.5 million respectively.

Google is one of a number of multinational companies that have come under fire in recent years for their low tax payments.

In April the British government introduced a ‘Google Tax’, making internationally-registered companies trading in the United Kingdom with annual revenue of more than 10 million pounds subject to a 25% diverted profits tax.

The tax was added over concerns that companies such as Google, Amazon and Apple were avoiding local taxes by diverting profits overseas, resulting in them paying little or no corporate tax in the country of operation.

Australia too, is tightening up on tax avoidance by multi-nationals, with Google, Apple and Microsoft among 30 companies it is targeting.

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