Article 1 :Google paid $11.7m tax in 2014, but says 'there's more we can do'

Google Australia's tax bill has risen by $4.6 million to $11.7 million, but the technology giant still hasn't counted its lucrative search engine business revenue that gets instead booked offshore.

Its financial accounts, lodged with ASIC late on Thursday, show that for year ending December 31 2014, Google Australia booked revenue of $438.7 million, up $81 million from $357.7 million in 2013.

Google's accounts also show that the company paid $11.7 million tax on profit of $58.7 million in 2014. Profit was up from $46.5 million the year before.

Its cashflow statement said income taxes paid in the 2014 period, was $13.7 million. But the ATO recently told the Senate inquiry into corporate tax avoidance that the more relevant measure is tax paid on profit (in Google's case the $11.7 million figure).

In any case, Google's tax bill is only a fraction of its Australian profits, which don't count for more than $2 billion worth of income it earns through advertising locally on its lucrative search engine business.

Google is among a number of technology companies - including Apple, Microsoft, BHP Billiton and Rio Tinto - that are under audit by the Australian Taxation Office for their use of marketing hubs in Singapore.

"We've invested nearly $1 billion dollars in Australia over the last three years, employing a local workforce of 1200 people," a spokesman said.

"There is always more we can do, but we are deeply committed to providing great products for Australians, and supporting our customers here."

Google, headquartered in the United States, says it global corporate tax rate is 19 per cent for 2014, and it incurred taxes of $3.3 billion.

Its Australian arm claimed $4.9 million in the research and development tax offset.

The company said in 2014 it paid $19.7 million in payroll and "other" taxes such as fringe benefits in Australia.

Google Australia's managing director, Maile Carnegie, recently told the inquiry that their tax arrangements were well within the law.

There are estimates Google's tax rate in Singapore is as low as 10 per cent.

Ms Carnegie did not confirm how much tax the company paid in the island nation, but confirmed to the inquiry earlier this month that the tax generated from Google's advertising revenue, is paid in Singapore.

"Google Australia provides sales and marketing services to Google Singapore, and we get basically revenue for those services," she said in evidence to the inquiry.

But Tax Commissioner Chris Jordan later gave evidence disputing the claims made by Google and the other companies under audit who had given testimony.

He said that while Google paid some tax in Singapore, "we believe it's a very small amount as revenue booked in Singapore is moved to a tax haven, Bermuda, through a series of licensing fee payments".

"This means the majority of profits made in Australia end up in Bermuda where no tax is paid."

Mr Jordan who pledged the agency will beat a budget target of hitting $1.1 billion in revenue from multinationals by 2017 expects to finalise audits by the end of the year.

So far the ATO has raised $250 million in liabilities through audits of multinationals, but this amount does not include the 12 tech companies under audit.

In the meantime, the Abbott government wants to work with the United Kingdom to implement interim measures to tax multinationals. It could announce new measures in the May budget, just months before the OECD hands down its final plan.

The OECD has been tasked by G20 governments to deliver a plan that stops companies profit shifting. This plan is due by October, but the immense public pressure mounting on political leaders to act fast, means that they could move sooner in introducing or beefing up domestic tax laws.

Ms Carnegie told the inquiry she was against the federal government taking unilateral action. "It will add more complexity and more uncertainty and will lead to less innovation and less growth and job creation," she said.

Question : What role does it appear Singapore plays in Google paying very little tax in Australia?

Article 2: FCT v Applegate

• A solicitor transferred to Vila (New Hebrides) to set up a branch of the firm.

• He was transferred for an indefinite period but he was always going to return to Australia

• He left no assets in Australia, gave up the lease on a Sydney flat, retained Australian health fund membership and he and his wife returned to Australia to give birth to a child

He leased premises in Vila, obtained resident status, and was admitted to practice law.

Originally intended to be overseas for an indefinite period but he returned to Australia after two years due to ill health.

The court held that the taxpayer could not be considered to be residing in Australia, as he was not physically present.

Question : (Domicile test)

Does the taxpayer have a place of abode outside Australia?

In Applegates case the FCT tried to argue that he did not have a permanent place of abode outside of Australia.

The issue was whether the place of abode outside Australia was permanent as required by the domicile test?