Software development company and Australian Start Up, Atlassian, has purchased productivity app Trello for a hefty sum, but has their questionable tax history helped them profit?
Atlassian, the poster child of Prime Minister Malcolm Turnbull’s Innovation Agenda, has kicked off the new year with a spending spree – completing the $US425 million ($577.8 million) acquisition of global productivity app Trello.
According to TechCrunch, Atlassion will pay $US360 million ($489.6 million) in cash for five-year old Trello, with the remaining amount being paid off in “restricted shares and options”.
However, according to data released by the Australian Taxation Office, Atlassian did not pay tax during the 2014-15 financial year.
A profitable Australian Start Up
According to their Wikipedia page, the company is described as an enterprise software company that develops products for software developers, project managers, and content management. It is best known for its issue tracking application, Jira, and its team collaboration and wiki product, Confluence.
In late 2015, Atlassian listed on the NASDAQ with a market capitalization of $4.37B. In October 2016, its founders, Mike Cannon-Brookes and Scott Farquhar topped the Young Rich List in Australia with a combined wealth of over $4.6 billion after the float.
Yet the company is finding massive tax breaks.
An Ideal Model – or is it?
The Australian Federal Government regularly spruiks the successful tech giant as the startup in Australia they would like replicated across the economy.
The Turnbull Government’s Innovation Agenda is actively funding Australian Start-Up ideas by funding numerous Not-for-Profit Accelerators and Incubators programs and State Funded Organizations.
But many of the more developed business ideas (pre-businesses) seek funding offshore, as Venture Capital opportunity’s in Australia for StartUp’s are limited.
This begs the question – why would the government seek to fund and replicate businesses that either don’t pay tax or move offshore? Aside from the obvious employment benefits (provided employment is domestic), it would be great to see an industry booming that contributes to the Australian economy with company tax.