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Facebook still booking most Australian revenue in Ireland, US Featured

Facebook has told a standing committee of the Australian Senate that it booked a vast majority of its Australian income for 2016 outside the country.

The social media company was responding to questions on notice from the Senate's Standing Committee on Economics, before which its representatives appeared on 22 August.

According to a response sent by Mia Garlick, the company's director of policy for Australia and New Zealand, Facebook's revenue that was taxed in Australia rose sharply from $26.4 million in 2014 to $326.9 million in 2016.

But the company recorded another $492 million in Australian revenue in 2016 which was booked outside the country.

The tax paid by the company rose from $680,654 in 2014 to $3.27 million in 2016.

facebook senate

The committee had asked for projections for 2017 but Garlick said these figures were not yet available.

In the response, Garlick said that companies that had been considered by the ATO for determining its appropriate tax returns included resellers of software, high-end consultancy services and media agencies.

"The functions of these entities involve substantial software service, consulting and system analysis, marketing strategy advice and are usually 'bespoke' to their clients," Garlick wrote.

In response to a query about the amount of revenue generated from Australia that was not supported by the company's offices in Sydney or Melbourne, Garlick said that a centralised sales organisation was supporting customers who were not managed by the local offices.

"A considerable amount of this support is provided by online tools and materials that are developed by staff working in our US, Ireland or other offices. Consequently, these sales are supported by Facebook Ireland and Facebook US in the aggregate," she said.

Such revenue was not separated out in the ordinary course of business but an estimate showed that it was close to $492 million, Garlick added.

Graphic: courtesy Senate Standing Committee on Economics

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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