Dell Australia Profit Up $79M Despite Tax Costs
Dell Australia has post an annual after-tax profit of $52.4 million, significantly up from $11.5 million the previous year. Reporting independently of EMC, revenue notched $347.7 million – a whopping $79 million increase, versus $268.4 million the year before.
Last year, Dell Australia paid nearly four times as much tax as it did in 2016, alongside an ATO agreement to pay ~$36 million in tax adjustments for a three-year period (i.e. February 2014 – January 2017).
As per its latest earnings report, Dell Australia has advised it agreed to pay an “additional compensating adjustment” of $36,548,000 for the financial period from 1 February 2014 to 31 January 2017, stemming from its ATO advance pricing arrangement (APA).
“The purpose of this advance providing agreement is to establish in accordance with Australia’s income tax law, an appropriate arm’s length outcome arising from the related party international dealings,” Dell asserts.
Despite the notable tax cost, Dell Australia still managed a notable $52.4 million annual after-tax profit.
Pre-tax profit notched $75.2 million, up from $16.9 million recorded the year prior.
Revenue was derived from product sales ($80.3 million), commissions from related parties ($246 million) and service fees ($20.6 million).
Following their $91 billion merger in 2016, Dell and EMC have since aligned their annual reporting. The move follows the official partner program launch of Dell-EMC in February last year.
In March last year the government legislated new diverted profits tax (DPT), to prevent multinationals shifting Australian generated profits offshore to avoid paying tax.
DPT is expected to ensure around $100 million in revenue remains in Australia annually.