Facebook Will Only Pay $20.2 Million In Aussie Taxes, Despite $700 Million Ad Revenue
Facebook is once again dodging an Australian tax bill – albeit, completely legally.
Despite earning more than $700 million in advertising revenue in Australia, the way it funnels these profits offshore means it is set to pay just $20.2 million in tax for FY2020.
Documents lodged with ASIC revealed $712.7 million in Australian advertising sales, up 5.7 per cent on FY2019.
However, Facebook Australia Pty. Ltd is classed as a ‘reseller’ of advertising inventory, and funnels these profits to the US, last year expensing $559 million in Australian sales, then declaring advertising sales of just $154.6 million.
“The company acts as a reseller of advertising services to designated Australian customers through a reseller agreement with another group company and generates revenues primarily through resale of advertising inventory on Facebook,” its financial report explains.
“Advertiser reseller revenue comprises revenue from the display of impression-based ads in the contracted period in which the impressions are delivered.”
Despite the discrepancies, Facebook insists it is doing everything by the book.
“During the last financial years, we paid income taxes in Australia at effective tax rates well above 30 per cent and in accordance with local taxation laws,” a Facebook spokeswoman said.
“We take our tax obligations seriously and are committed to supporting local communities and businesses in Australia.”
Facebook currently has 162 Australian staff, and has a cash pile of more than $243 million, according to The Australian.
This tax dodge brings to mind Google’s recent Australian tax bill, where papers filed to ASIC show $5.2 billion in gross revenue for 2020, including $4.4 billion in advertising revenue.
Due to the company filing its ad profits offshore, under its Google Asia Pacific division, it only paid income tax on an amount of $239 million – a mere $76 million in Australian taxes.