From 2015 until 2018, Google Asia Pacific Ltd. (Google APAC) generated US$ 55 billion revenue, but only paid US$ 136 million tax. That is 0.25 percent of revenue and 8 percent of profit.
From the US$ 55 billion revenue generated in 2015-2018, only US$ 1.7 billion of profit remained before paying tax.
Related party transactions
In 2018, Google APAC recorded a total revenue of US$ 20.2 billion. US$ 4.2 billion of that is paid to related companies in the Alphabet Group for “service, reseller and licence costs,” and Google APAC has US$ 3 billion in due amounts, loans and borrowings to related companies.
Related companies are other companies in the Alphabet group. Google APAC’s direct holding company is Google Ireland Holdings Unlimited Company and the ultimate holding company is Alphabet Inc. in the USA.
Google APAC also receives money from related companies. Google LLC pays Google APAC for “Research and Development services.”
Tax exemption
Google APAC pays a much lower tax rate than is typical. Singapore’s corporate tax rate is 17 percent, but Google APAC paid 8 percent on average from 2015 until 2018.
For example, over 2018, Google APAC had a “partial tax exemption and tax relief” of US$ 74.9 million amongst other things. Instead of paying US$ 120.2 million, it ended up paying US$ 65.6 million in tax.
Worldwide, Alphabet had an effective tax rate of 12 percent in 2018 and 13 percent in 2019 as stated on their annual reports. Google did not respond to a request for comment by Global Ground Media.
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Article by Anrike Visser.
Editing Laura Alice Martin.
Illustration by Kristine Carpio.
This article was developed with the support of Finance Uncovered.
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