JOSH EDELSON/AFP/Getty Images A lit sign is seen at the entrance to Facebook’s corporate headquarters location in Menlo Park, California on March 21, 2018.

Facebook raked in over $US420 million in sales in Australia last year, but paid just $US8.3 million in taxes – roughly 2% – to Australia’s tax authority.

According to the Facebook’s tax returns, seen by the Sydney Morning Herald, the company paid $AU455 million ($US320 million) to overseas subsidiaries for “the purchase of advertising inventory,” though the report did not provide additional details

Concerns have been raised in the past about multinational companies shifting around their fiances in order to avoid company taxes, leading to the passage of legislation in Australia last year to narrow the opportunity for tax avoidance by multinational enterprises.

Facebook has been in hot water with the Australian Taxation Office (ATO) in the past, and last year the company was ordered to pay $AU42 million ($US29.5 million) in taxes as a result of a settlement with the office following an audit.

Facebook raked in over $US420 million in sales in Australia last year, but paid just $US8.3 million in taxes – roughly 2% – to Australia’s tax authority.

According to the Sydney Morning Herald, the company’s local operations made $AU598 million ($US420 million) last year, mostly from advertising.

The Herald also reported that the company paid $AU455 million ($US320 million) to overseas subsidiaries for “the purchase of advertising inventory.”

In 2018, the company recorded a net revenue of just $AU125 million ($US88 million) and $AU35 million ($US24.6 million) in profit before taxes. It paid $AU11.8 million ($US8.3 million) in company taxes.

Concerns have been raised in the past about multinational companies shifting around their finances in order to avoid company taxes, leading to the passage of legislation in Australia last year to narrow the opportunity for tax avoidance by multinational enterprises.



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Facebook has been in hot water with the Australian Taxation Office (ATO) in the past over misrepresented taxes.

Last year, the company paid $AU42 million ($US29.5 million) in taxes as a result of a $AU31 million ($US21.8 million) one-off settlement with the ATO, following an audit of its taxes between 2009 and 2016. In 2016, the company paid just $AU3.2 million ($US2.2 million) in taxes, the Herald reported.

Facebook may also be facing fines from the US Federal Trade Commission (FTC) for consumer privacy violations of $US3 billion to $US5 billion. The company has set aside $US3 billion, according to its earnings report released this month, which lowered its disclosed earnings for the period.

The FTC reportedly began investigating Facebook in 2018 following the Cambridge Analytica scandal, which revealed the widespread mishandling of user data on the site. Facebook has also had several massive privacy breaches in recent years, including a massive hack which left the personal information of 30 million users exposed. Business Insider’s Rob Price reported this month that the company also uploaded the email contact information of 1.5 million new users without informing them or seeking consent.

In a statement, a spokesperson for Facebook Australia told Business Insider that the company follows all applicable tax laws.

“We comply with applicable tax laws. In 2018, the Australian Accounting Standards Board (AASB) implemented new account standards for revenue recognition and our accounting has changed to reflect this.”

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