Google NZ's $60,000 loss

TOM PULLAR-STRECKER
Last updated 16:23 23/06/2014

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Google’s New Zealand subsidiary reported an annual loss of just over $60,000 and paid just $227,000 in tax in 2013, its latest accounts have revealed.

New Zealand businesses are believed to spend hundreds of millions of dollars annually on Google’s advertising services and software.

But Google is one of a number of technology multinationals that book most of their revenues in Ireland, enabling it to take advantage of legal tax rorts that are currently the focus of an attempted-clampdown by the Organisation for Economic Cooperation and Development (OECD).

The subsidiary turned over $10.1 million in 2013, according to accounts published by the Companies Office on Friday.

Revenue Minister Todd McClay said today that officials from Inland Revenue were in Paris this week, working alongside the OECD on its plan to counter profit-shifting by multinationals.

“By contributing to discussions on the growth of the digital economy, its impact on tax bases and possible solutions to combating the … problem, New Zealand is playing a very active role in dealing with these global issues,” McClay said.

Google came under the gun last week when one of the balloons it launched as part of a controversial experiment to provide broadband in remote areas came down in the sea off the Canterbury coast, prompting a call-out from emergency services which were responding to a report it might be a crashed plane.

The company agreed to reimburse a rescue helicopter for the cost of their call-out. Google admitted in August that up to 14 of an earlier batch of 30 balloons it launched from Tekapo last year might have been lost at sea.

The balloon project has been slated by some technologists, including Microsoft founder Bill Gates and by David Ware, chief executive of NZX-listed TeamTalk. Even if the technical challenges could be overcome, balloon-based broadband would not fly commercially in New Zealand because there were only a few tens of thousands of people who were unable to be served by existing terrestrial networks, and they could be connected via satellite, Ware said last year. 

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