Video: Australian Senate Questions Tax Dealings
The Australian Senate Economic References Committe conducted hearings on corporate tax structure, with Google’s dealings in Bermuda being brought up at one stage of the proceedings.
Yesterday [Apr 8], top executives from the Australian branches of Google and Apple appeared at the Australian senate inquiry into corporate tax avoidance, while Microsoft sent an executive based in the USA to appear.
Business Insider reports that, “Google Australia MD Maile Carnegie defended her company’s corporate set up saying it paid 19.3% tax on profits last year and doesn’t ‘structure itself based on tax, it structures itself based on being competitive.’
Google’s Maile Carnegie being questioned on the company’s dealings in Bermuda
Transcription of the exchange in the video above
Senate Speaker: When Bloomberg Business reports that most of the profits went to the tax haven of Bermuda, which has a population, back in 2013, of 65,024 people, you’re not aware of any of that?
Maile Carnegie: I’m aware that Google has a relationship in Bermuda.
Senate Speaker: What’s the tax rate in Bermuda, remind me?
Maile Carnegie: Senator, I’m not aware.
Senate Speaker: Yeah, if I said it was zero, zero… would that be right?
Maile Carnegie: I would not debate whether it’s, I mean, I would take it on face value.
Senate Speaker:Right, but you don’t, you’re a senior executive for Google, the most senior executive in this country, and you’re not aware that profits from Australia’s operations somehow end up in Bermuda, which pays with a zero-zero tax rate. It’s a zero tax rate. It’s actually zero.
Maile Carnegie:As the profits from Google Australia are basically, we pay them in Australia. The profits from the other revenue generated here are paid in Singapore, so those profits are taxed. They are taxed in Singapore.
Senate Speaker: What were your revenues last year in Australia? Can you tell us that?
Maile Carnegie: I’m sorry. We don’t disclose those.
Senate Speaker: You don’t disclose those. Okay, so you can’t tell us, and you don’t disclose…
The 77-page hansard [below] of Wednesday’s hearing shows that Bermuda was mentioned some 23 times during the hearing, however we were not the only jurisdiction to be brought up; as the Cayman Islands and British Virgin Islands were also mentioned, Delaware was called a “US tax haven,” while Singapore received some 82 mentions and was also dubbed a “tax haven.”
Finance Minister Bob Richards has repeatedly addressed the ‘tax haven’ accusation, noting that Bermuda has numerous international tax exchange agreements and a strong regulatory structure.
In a statement yesterday, Minister Richards said: “The international climate can be hostile. There are those blaming small countries for the problems facing their economies. We must make our case that Bermuda is unique and there is need for a differentiation in the treatment of smaller island jurisdictions.
“Bermuda has always been ahead of the curve on compliance in tax, financial regulation, transparency and international cooperation. Bermuda’s first TIEA [Tax Information Exchange Agreement] with the US dated from 1986. This was a landmark, a launching pad for re-insurance in Bermuda.”
The hansard, courtesy of the Australian Government, follows below [PDF here]
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Interesting yes, but factual, I don’t think so. They are referring to us, (Bermuda) as a 0% Tax Haven…Please speak up and out Minister Bob Richard…
My understanding is that we are a tax haven however, according to Minister Bob Richards and public record, we are compliant in tax, financial regulation, transparency and international cooperation. Which in fact means that we file all the necessary paperwork with other countries so they can track monies owed to them on the tax front. Of course this means we actually do not charge a specific tax fee as those other countries do.
Could be wrong, but that’s how it was broken down to myself.
I say Bermuda should sue for libel/slander everytime we are called a tax haven.
Google not paying tax in Australia is not only bad for tax payers but also kills competition because any local internet companies have to pay the full tax rate while a company like Google can shuffle its profits around and pay no tax. Local internet companies are at a huge disadvantage. I think the way the UK is doing it with a ‘Google tax’ is the way forward for Australia.