According to documents filed to ASIC, Spotify received zero subscription revenue from Australian users in 2020, despite an estimated 7.7 million Aussies using the service.
The Sydney Morning Herald estimates that, if Australia reflects the global subscriber vs user rates, there would have been 3.3 million paid subscribers in Australia, paying close to $400 million a year.
Yet, the only revenue they reported in Australia for 2020 was $24.8 million in advertising through its free tier. They alleged Aussie profits of $9,163 for 2020, and paid a rather tiny $588,916 tax bill to the ATO.
So, where did the money go?
It was funnelled through the more favourable tax haven of Sweden, where the company’s headquarters are located.
Of course, as a Spotify spokesperson explains, it’s all legal.
“Spotify complies with all applicable tax laws in Australia and financial statement requirements, and pays corporate taxes in Australia on taxable profits.”
So there.