Dunne stays mum on Google tax
Revenue Minister Peter Dunne is refusing to say whether the Government will follow Australia and European governments in cracking down on tax avoidance schemes used by companies such as Google.
The Australian government announced yesterday that it was planning to change its tax laws to stop big firms using accounting techniques such as the "double Irish" and "Dutch sandwich" to shift their income to countries such as Ireland where tax rates are lower.
Dunne said the New Zealand Government was concerned about possible tax avoidance and continually sought to improve tax laws.
"This issue with multinationals is very much an international problem, with a number of tax jurisdictions having real concerns about the amount of tax not being paid by some of these huge companies.
"New Zealanders generally believe our tax system is fair and that is hard-won credibility, so I see this issue as one that we need to keep working on resolving," he said.
Bloomberg put the spotlight on Google's tax affairs in 2010 when it reported that the internet search giant paid tax at a rate of just 2.4 per cent on the billions of dollars of profits it earned outside the United States.
The Dominion Post had revealed in June 2010 that Google New Zealand expected to pay just $7726 tax in respect of its previous financial year - less than the average teacher or construction worker.
Google does not break out its revenues outside the US and Britain, but it is understood it sells about $150 million worth of advertising to New Zealand customers annually.
Reuters reported that the Australian crackdown followed a push by Britain and Germany to make multinational companies pay their "fair share" of taxes. Australia's Assistant Treasurer David Bradbury cited Google Australia as the type of operation it was seeking to target.
- © Fairfax NZ News