Google has chosen not to reveal its gross revenue from Australia for the first time in seven years.
👉 Background: We all know Google, owned by Alphabet, for its online search… profit machine! And for years its Aussie business has been doing very well, with gross revenue of $5.2 billion in 2020 and $7.2 billion in 2021.
👉 What happened: Google has chosen not to reveal its gross revenue from Australia for the first time in seven years. Instead, it's only reported how much it has been paid by Alphabet (its parent company) for ad and cloud services.
👉 What else: In 2022, Google Australia had $8.4 billion in “gross revenue". But this time around, Google Australia posted revenue of just $2 billion in total. Hello profit shifting!
💡Profit shifting is a technique used by multinational corporations to pay less tax by moving profits to different countries, with lower tax rates.
💡 By shifting profits, the company effectively underreports its profit in the countries where it sells goods and services. This is a big loss for the local jurisdiction, who miss out on large amounts of tax.
💡But Google isn't the only tech company shifting its Australian profits to other jurisdictions. We've also got Netflix, Meta and Spotify.
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