👉 Background: Google and Facebook are two of the largest tech behemoths in the world. Between them, they’re valued at a total of $1.92 trillion US dollars. That’s more than all good and services sold and produced in the whole of Italy in 2022.

👉 What happened: In 2022, Google and Facebook made $8.3 billion in digital advertising. But here's the thing: more than $7.2 billion was attributed to their parent companies overseas for tax purposes. This is called "reseller revenue."

👉 What else: As a result, Google paid just over $92m in income tax on more than $8 billion in revenue, while Facebook only declared $224m in revenue on more than $1.2 billion.

What's the key learning?

💡‘Reseller revenue’ is a common practice among big tech companies globally where they have ‘agreements’ with their larger, international corporate entities to 're-sell' advertising.

💡As an example, Facebook Australia pays Facebook Ireland for the cost of 'running the Facebook platform'. Effectively, this allows them to move revenue abroad and reduces the amount of tax they pay in Australia.

💡Reseller revenue has been a global issue, and governments around the world are taking notice:

• In 2020, Google agreed to pay $481 million to the Australian Tax Office to settle a dispute over their tax practices here.
• Google also agreed to a $1 billion settlement in France to end a four-year investigation into its tax movements.

But despite the ATO's best efforts, it still seems to be happening.

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