Google New Zealand has posted revenue of $43.8 million for the year ended Dec 31 2020, a 21% increase from $36.2m in the year prior.

Advertising reseller revenue, the subsidiary’s largest revenue stream, was $35.72m for the year, up from $28.95m the year prior.

The revenue is primarily “advertising revenues generated on Google websites, the Google Search app, and other Google-owned and operated properties like Gmail, Google Maps, Google Play, and YouTube,” according to the financials.

A Google NZ spokesperson declined to comment on the reasons for the growth.

When asked what revenue Google is booking offshore in relation to activity in NZ, Google NZ communications manager Carrie Jones said: “Since the change to reseller in FY18, we have been booking all of our revenue earned from NZ ads and cloud customers in New Zealand”.

Advertising Standards Authority figures show digital-only advertising turnover was $1.21 billion in 2020, almost 55% of the total ad spend in the year.  

Cloud reseller revenue derived from NZ use of Google’s cloud products was $5.5m, up from $4.37m.

Google is one of several multinationals that is voluntarily recognising more local revenue as worldwide scrutiny falls on the tax practices of so-called 'stateless' digital corporations with global reach. Governments are tiring of their efforts to shift profits to low tax jurisdictions, with OECD, European, Australian and US proposals all in the mix to improve tax collections. NZ is considering a digital revenue turnover tax. 

The local Google unit still paid a sizable service fee to parent company Alphabet of $517m, up slightly from $511m in 2019.

“As the ongoing impacts of the covid-19 pandemic and resulting global market disruptions continue to evolve at 24 May 2021, the extent of the impact remains uncertain and difficult to predict. Such an operating environment has the potential to have an adverse impact on the company’s operations and future financial position,” said Google NZ directors Fiona Bones and John Howell in their report.

Google NZ’s profit before income tax was slightly down to $10.2m from $10.6m thanks to an increase in the cost of sales and services and operating expenses.

“We have continued to work constructively and collaboratively to ensure that we comply with New Zealand’s legislative requirements,” a spokesperson told BusinessDesk.

Net profit was $7.8m compared to $8.12m last year.

The subsidiary declared net tax to pay $2.36m, compared to $2.48m last year.

No dividends were paid or declared.