Dell Australia has made its annual financial results available to the Australian Securities and Investments Commission (ASIC), reporting after-tax profit of AU$52.4 million, up from the AU$11.5 million recorded in 2017[1].
During the 12 months ended January 31, 2018, the local arm of Dell and the Australian Taxation Office (ATO) entered into an Advance Pricing Arrangement (APA) for an agreed APA period commencing from February 1, 2017.
As part of the APA terms, Dell Australia said it agreed to an additional compensating adjustment of AU$36.5 million for the financial period from February 1, 2014 through January 31, 2017.
"Consistent with the company's accounting policies, the company accounted for the change in the level of operating profit in the current year as the discussions with the ATO were only finalised during the year," Dell explained.
"The purpose of this Advance Pricing Arrangement is to establish, in accordance with Australia's income tax law, an appropriate arm's length outcome arising from the related party international dealings."
With pre-tax profit totalling AU$75.2 million -- up from the AU$16.9 million recorded a year prior -- income tax paid for the year was AU$22.8 million.
For the 2017 financial year, Dell paid AU$5.4 million.
The AU$22.8 million was comprised of current tax totalling AU$11.7 million, deferred tax of AU$99,000, APA adjustments from prior periods of AU$10.96 million, adjustments for current tax of prior periods of AU$331,000, and a reduction of AU$243,000 due to adjustments for deferred tax of prior periods.
The Australian government legislated a new Diverted Profits Tax [2] (DPT) in March last year, which is intended to prevent the practice of multinational organisations shifting profits made in Australia offshore to avoid