Social networking giant Facebook has spent more than half a billion Australian dollars (AUD) in advertising revenue in the country on an overseas subsidiary to reduce the tax bill here to just 20 million AUD.
Facebook logo at headquarters in Menlo Park, California, USA. Photo: AFP/VNA According to the Vietnam News Agency correspondent in Sydney, data from the Australian Securities and Investments Commission shows that in the 2020 financial year, Facebook has overcome the worst effects of the recession caused by the COVID-19 pandemic and made a profit. Total advertising revenue in “Kangaroo country” was AUD 712.7 million (equivalent to USD 570 million), up from AUD 674 million in 2019. However, Facebook paid $559 million to an overseas subsidiary for ad inventory-related content, bringing the company’s net revenue to just $155.3 million. As a result, Facebook’s pre-tax profit was AUD 37.9 million, and with this profit, the company paid AUD 20 million (USD 16 million) in taxes, compared with AUD 16.7 million in 2019. A Facebook spokesperson said that in the last financial year, the company paid income tax in Australia at rates above 30% under local tax law. While tech giants Facebook and Google both recorded growth in 2020 in Australia, many local media outlets have had to cut costs and in some cases cut jobs due to business reasons. Advertising revenue dropped by 30%. Facebook is currently actively negotiating with several Australian media companies about paying for their news content to appear on the social network’s Newsfeed feature. So far, Facebook has officially signed contracts with two major media agencies, Seven West Media and News Corp, and according to some sources, will sign a formal agreement with Nine Entertainment Co within the next two weeks. Meanwhile, negotiations with Guardian Australia and national broadcaster ABC are still ongoing.
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