Facebook has told the Federal Parliament that a majority of its revenue raised in Australia is booked overseas with its Irish and American offices, and is therefore not subject to Australian tax.
Facebook told a Senate standing committee hearing on corporate tax avoidance that from 2014 to 2016, it had increased its local Australian revenue from A$26 million to $327 million, and increased the amount of company tax it paid to the ATO from $681,000 to $3.27 million.
But also in 2016, some $492 million in revenue from Australian customers was “recognised” by its Irish and American offices.
This included deals from Australian companies or people who bought ads on the Facebook site without dealing with the local sales arm.
The ATO may yet give a stamp of approval to this arrangement. In August, deputy tax commissioner Mark Konza told the committee: “If you have sales that are going offshore, and you have activities in Australia, and those activities directly support those sales, then you must return those sales in Australia.
“However, the converse must also be true … and that is if you have some of your sales which are not being directly supported, then you are under no obligation to return them in Australia.”
