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Google will pay $481 million to settle a decade-long tax dispute with the ATO, following similar agreements with Apple and Facebook

Jack Derwin
  • The ATO has settled a ten-year dispute with Google over its tax bill, receiving $481.5 million as part of a new agreement.
  • While the ATO wasn't forthcoming with details, the dispute covers the tech giant's tax bill from 2008 to 2018.
  • It comes after Facebook, Apple and Microsoft made similar agreements with the tax office, amid concerns tech companies are minimising their tax bills by registering sales overseas.
  • Visit Business Insider Australia’s homepage for more stories.

In a growing trend, another giant tech company has made peace with the Australian Taxation Office (ATO).

On Wednesday Google revealed it is the latest company to come an agreement that would settle its long-running tax dispute, dating back to 2008.

"We have reached a $481.5 million settlement with the Australian Taxation Office that resolves the longstanding dispute and audit covering 2008 to 2018. The settlement will also provide certainty in relation to future tax treatment," a Google spokesperson told Business Insider Australia.

While the announcement was only made on Wednesday, the amount has already been baked into the tech company's financial results. It follows on from a company restructure that saw Google move to a reseller model in 2016, when direct sales within Australia began to be recognised as such. The company maintains the settlement involves no admission of guilt.

"They join the likes of Microsoft, Apple and Facebook who have all publicly stated that they have settled their tax affairs with the ATO and we welcome their transparency," the ATO said in a statement.

It comes after the introduction of the Multinational Anti-Avoidance Law (MAAL), and as the Tax Avoidance Taskforce tries to reign in efforts to register Australian sales in friendlier tax jurisdictions. The ATO says the latest settlement rings the total collected from the ecommerce industry to $1.25 billion.

“This settlement is another great outcome for the Australian tax system,” Deputy Commissioner Mark Konza said. “It adds to the significant success of the ATO in positively changing the behaviour of digital taxpayers and significantly increasing the tax they pay in Australia."

Beyond e-commerce, the ATO claims to have collected an extra $7 billion under MAAL more broadly. The Tax Avoidance Taskforce currently has a mandate until 2023.

Google told Business Insider Australia it believes an international tax deal between countries would be the best solution to deal with multinationals.

READ MORE: Netflix pays barely any tax in Australia. But it isn't alone – here are some of the other tech companies that avoid it.