Facebook’s Australian revenue went from $33.6 million in 2015 to $326.9 million last year after the government’s Multinational Anti-Avoidance Law came into effect in January 2016.
The social media giant stated in its 2016 results filing to the Australian Securities and Investments Commission that a restructure of its operations had taken place since the so-called ‘Google Tax’ laws — designed to stop multinationals from offshoring tax liabilities — became active last year.
“The company was converted into a local reseller of advertising inventory and concludes all sales contracts with customers managed by the sales team in Australia,” Facebook director Shane Crehan reported.
“These customers will no longer have a contractual relationship with Facebook Ireland.”
With the giant leap in revenue also came a massive increase in “costs of revenue”, which went from $0 in 2015 to $275.2 million last year, almost offsetting all the gains. The result was that Facebook Australia only made $3 million in net profit after paying $3.27 million in tax.
Despite the more realistic numbers reflecting its activities in Australia, the AFR reports the $327 million figure is still someway off the expert estimates of $550 million to $1 billion in advertising revenue Facebook likely harvests in this country each year.
The company’s filing does note that the Australian arm is a “non-exclusive reseller” of advertising, implying that in many circumstances Australian customers are buying ads directly from an overseas Facebook entity, in transactions that don’t involve the local sales staff.
Facebook declined to comment to Business Insider.
Apple Australia stated in its filing in January that its net profit plunged 97% in 2016 after a tax “adjustment” for previous years, and that Australian Taxation Office was currently auditing it.
Google Australia, in its results last week, reported that it also faced additional scrutiny from the ATO, saying it would “lodge an objection” against an amended tax assessment issued after year end.
Facebook Australia’s filing did not provide any commentary into any extraordinary interaction with the ATO.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.