The proposal would introduce a 5% tax on revenue generated by individual data centres in Australia, based on the following specifications.

In scope revenue
The tax would apply to data centres with an energised IT (information technology) load of above 5 megawatts (MW).

Deemed revenue
To represent revenue generated by data centre facilities wholly owned and operated by hyperscalers (such as Google, Amazon etc) who use their data centres to support their revenue streams, as opposed to revenue generated from co-location providers (who directly charge customers for data centre capacity, i.e. “data centres as a service”).

A deemed revenue rate would apply to owner-occupied hyperscale facilities that do not directly generate co-location revenue (based on total revenue ratio to billed utilisation capacity of a market leading co-location provider). The rate will be used to approximate the revenue that their capacity could generate if it were supplied in the co-location market.

The deeming rate would be set by legislation as follows:

• $236 per kilowatt per month (total revenue basis including electricity pass through costs).

The deeming rate would be indexed by the Consumer Price Index (CPI).

Company tax
The revenue tax would not be creditable and would be treated as a non-deductible expense in respect to Australian company income tax.

The proposal starts on 1 January 2027 and would be ongoing.

Read the full response [Download PDF 412 KB]