Google to challenge tax demand by Australian Taxation Office
Google to challenge tax demands issued by the ATO Getty Images/Guang Niu

Google said it will challenge tax assessments issued by the Australian Taxation Office (ATO).

In accounts filed with the Australian Securities and Investment Commissions, Google's Australian unit said it will "lodge an objection" to the tax demand from the ATO.

In a financial statement released on Friday (28 April) Google said: "The company will continue to uphold its positions against any and all such claims," without disclosing how much the OTA has demanded in taxes, suggests a Reuters report.

The OTA has increased scrutiny on the multi-nationals that are operating in Australia for the amount of tax they are paying in continent. Last December it said it was pursuing seven major businesses over $1.50 billion in unpaid tax, although it did not reveal details about the name of the companies.

In April Scott Morrison, Australian treasurer, said under tax avoidance legislation the country is expected to claw back $2.9bn from multinational companies.

"We are making sure that multinationals, as they should, pay their fair share of tax, so that Australian citizens get the tax from the profits earned in Australia from Australian customers that is needed to fund vital infrastructure and services here in this country," Morrison said.

The Multinational Anti-Avoidance law came in to effect in December 2015 and the ATO has introduced the new guidelines for foreign companies. The law was aimed at addressing the issues of the multi-national companies using loopholes to minimise the tax payment in Australia. The law applies to the companies with global income over $1bn.

Google Australia in its financial statement revealed an increase in revenue and tax for 2016.