Google NZ pays $165k tax in boom year for online ad spend

  • Digital
  • May 9, 2013
  • Sim Ahmed
Google NZ pays $165k tax in boom year for online ad spend

Google New Zealand's latest financial statement to the government shows the search giant paid $165,000 to the tax man in 2012.

According to Google NZ documents on the Companies Office website, Google clocked a $360,000 loss last year (up from $52,000 the previous year) but this doesn't take into account revenue its global parent company makes from New Zealand customers with products like AdWords. 

Google's lucrative global search marketing revenue is piped through Google Ireland, which minimises the company's tax exposure. This has put Google in the crosshairs of overseas tax authorities.

Chairman Eric Schmidt defends Google's tax policies, saying in the Guardian article it abides by the laws of the countries it operates in. Google paid £6 million in taxes in the UK from £2.5 billion in revenue in 2011.

According to the Interactive Advertising Bureau (IAB) and PwC, 2012 was an incredibly strong year for online advertising in New Zealand – with revenue up nine percent to $363 million. The lion's share of this figure is from search and directory spending, where Google is the dominant player.

Google NZ's books does show $6.8 million in revenue (up 53 percent from 2011), which it attributes to its servicing and consulting work with major customers in the country. All of Google's staff in New Zealand (apart from a single engineer in Wellington) work in sales roles.

A year ago Google New Zealand consisted of three people who would fly back and forth from Sydney to manage the sales work in New Zealand, now there's a dozen Googlers working from the PwC Tower in Auckland. Google paid $4.2 million in employee benefit expenses in 2012.

The advertising company spent $253,000 promoting its own services and products, and $768,000 in travel expenses.

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