👉 Background: While Aussies may love Big Tech products, the Australia Tax Office (ATO) isn't as fond. In fact, in FY23, many large tech companies didn’t pay tax in Australia at all — that includes Netflix, Canva and even Sony.

👉 What happened: Late last week, the Australian government joined more than 135 other countries to apply a global minimum tax of 15 per cent. It means that a company with more than $1.2 billion in global revenue needs to pay at least 15 per cent tax across its global operations.

👉 What else: The goal in Australia (and many other countries) is that multinational companies pay a fair amount of tax for the revenue earned in our country.

What's the key learning?

💡It’s time for the world’s biggest companies to pay tax in the countries where they make money.

💡Major technology companies have been using sophisticated accounting to minimise their tax in Australia by keeping a “physical presence” in tax-effective countries like the Cayman Islands or Ireland — especially when Australia's 30% corporate tax rate is one of the highest in the world.

💡For example in 2022-2023, Apple made more than $12 billion in income in Australia, but it only paid $142 million in tax - which is just over 1% of earnings. So this new legislation which passed in Australia and more than 100 other countries means that major tech companies will need to cough it up... if they want to operate in our countries.