The Australian government has announced plans to try to force Google Inc (GOOG), Apple Inc. (AAPL) and other global companies into more transparency about how much they pay in taxes.
Google Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL) and other big global companies have been requested to be more transparent about the amount of federal taxes they pay in Australia. The plan was announced Monday, and it comes in the wake of global concerns about tax evasion by major companies. It was discovered in November that Apple Inc. (NASDAQ:AAPL) paid only 1.9 percent in taxes on its overseas profit. Google Inc (NASDAQ:GOOG) apparently avoided $2 billion in global taxes by sending billions of its revenue to Bermuda. And those are just two of the stories that have come out.
Google Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), Starbucks Corporation (NASDAQ:SBUX) and Amazon.com, Inc. (NASDAQ:AMZN) have all been accused of tax evasion in the U.K. as well. Today’s move by the Australian government is the latest strike against global corporations, who use international tax havens to avoid paying as much tax as they can.
The Age reports that Australian lawmakers are trying to pass a law before elections in September, requiring big companies to release details about the amount of taxes they pay each year. Those details would make the tax picture much clearer for the Australian public. According to The Age, Google’s reports indicate that it paid just under $75,000 in taxes in Australia in 2011, although the search giant claims it pays much more than that.
It’s important to note that the tax avoidance steps taken by companies like Apple Inc. (NASDAQ:AAPL) and Google are technically legal. They involve routing income to countries with very low tax rates. However, as the globe stands reeling from the recent financial crisis, governments are looking for ways to keep tax money on income earned in their country.
Government officials do not intend individuals or small businesses to be required to disclose the amount of taxes they pay. Instead a statement from federal officials indicates that “large multinational companies that use complex arrangements” will be targeted.
Meanwhile, Google Inc (NASDAQ:GOOG) is also trying to handle related problems in Europe. The search giant is trying to bring resolution to an investigation into the way it ranks its own services in search results. Aside from causing Google’s competitors’ sites to rank lower than its own sites in search rankings, the company is also accused of cutting ad revenue potential for its competitors. That investigation is being conducted by the European Commission. The specifics of the settlement offered by Google Inc (NASDAQ:GOOG) late last week have not been released.