Tax bill surge sees Google Aus profits sink by $96M

Tax bill surge sees Google Aus profits sink by $96M

Google Australia clocked a total income tax expense of $99 million bill, leaving it with $33 million net profit

Credit: Dreamstime

Google Australia has seen its profits for 2019 plummet after its income tax bill shot up by 276 per cent.

The technology behemoth posted $33 million in net profit after tax for the year ended 31 December 2019, a steep drop from its $129 million bottom line the year before.

The fall came as Google Australia clocked a total income tax expense of $99 million, almost three quarters of its pre-tax profit for the year. 

At the same time, the company posted a moderate revenue increase of $2 million for 2019, rising to a grand total of $1.2 billion. 

However, at the same time, the company’s operating costs jumped by a third, from $515 million to $688 million, partially offsetting its revenue increase. 

As such, Google Australia’s pre-tax profit for the year stood at $133 million for 2019, a dip of roughly 14 per cent year on year.

The tax bill, which only stood at $26 million the year before, amounts to a significant portion of Google Australia’s pre-tax profits. 

The report comes following ongoing scrutiny by the ATO into the amount of tax paid by tech giants locally, looking closely at Microsoft, Apple and Google dating back to at least 2012.

In the 2016-2017  tax transparency report, Google paid $12.2 million in taxes on a taxable income of $106.1 million.

Meanwhile, in terms of revenue, Google’s advertising and reseller business accounted for the lion's share of money coming in, hitting $700 million. 

Research and development services rose from $290 million last year to $332 million for 2019. Yet at the same time, its hardware business – which covers sales of smartphones, chromecasts and smart devices – dipped by $216 million to $179 million. 

The dip follows an overall softening of the hardware market in 2019, especially within the smartphone market.

A category dubbed ‘other’, which accounts for support services proved a significant growth area, increasing from $2.5 million to $13.6 million.

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