The latest corporate tax transparency data released by the Australian Taxation Office
this week shows that around one-third of large companies operating in Australia did not pay
a single cent of tax in the 2017-18 financial year.
Of the 1,500 or so companies that did pay tax, here are the top 10 – mainly banks
and mining companies with Telstra, Wesfarmers, and Mitsubishi Development also in the mix.
A total of $52.3 billion was collected in corporate tax, an increase of $6.6 billion
from the previous year.
This increase was primarily driven by the increase in commodity prices, which were up
15% in Australian dollar terms over 2017–18.
Of the 710 companies that didn’t pay any tax, here are some of the biggest non-contributors.
Car companies.
Some of the biggest car companies operating in Australia didn’t pay any tax.
Mitsubishi Motors – Total income: $2.4 billion, Tax paid: $0; Ford Motor Company – $3 billion;
General Motors Holden – $4.2 billion; but the biggest seller of cars in Australia who
didn’t pay a single cent of tax: Toyota Motor Corporation – $10.5 billion in income.
I don’t know how they do it.
How can they be the most successful car company in Australia, but yet pay zero tax?
I suppose they have a team of accountants and lawyers who know exactly how to work the
system to avoid paying tax altogether.
I honestly can’t find the details, so apologies to Toyota if there’s something obvious that
I’m missing here.
Oil, gas, and fuel companies have also found ways to avoid paying tax.
Puma Energy, $2.5 billion income; Santos, $3.4 billion (A spokeswoman for Santos said
that, “Santos has not been in an income tax-paying position in recent years.
This is the nature of the tax system in Australia, which is based on profits and encourages capital
investment through depreciation provisions”); Shell Energy Holdings, $4.5 billion; Chevron
Australia, $5.2 billion; Australian Pacific LNG, $5.2 billion; Woodside Petroleum, $6.2
billion; and ExxonMobil Australia, a total income of $9.2 billion and not a single cent
paid in tax.
A spokesman for ExxonMobil said, “ExxonMobil Australia is currently in an income tax loss
position in the short-term as the Australian operations recover the recent significant
capital investments in long-lived producing assets.
Through these investments, ExxonMobil Australia continues to contribute to Australia’s economic
well-being by creating jobs, investing in the future and bringing reliable supplies
of energy to help fuel growth.”…
Sounds like a lot of spin.
Other non-tax payers include mobile telecommunications company Vodafone
Hutchinson Australia, at $3.4 billion income;
Transportation and logistics company Toll Holdings with an income of $5.4
billion; Virgin Australia Holdings which owns and operates one of Australia’s largest
airlines, had a total income of $5.5 billion.
A spokesman said, “Virgin was not required to pay Australian federal income tax in the
2018 financial year due to ongoing operating losses and having prior-year tax deductions
for fleet investment.
There are a number of changes underway to improve the financial performance of the company”.
And BlueScope Steel with an income of $5.7 billion, but no tax paid.
A spokesman said, “BlueScope will pay tax when pre-2016 losses are fully utilised.
BlueScope does pay tax in other countries”.
Gee, thanks BlueScope.
That really helps out Australia.
But one thing that I find even funnier than large companies that pay no tax, are large
companies that pay a little bit of tax.
For example, RTPDS Australia, a company that provides management consulting services and
is owned by mining giant Rio Tinto, had a taxable income of $11.4 billion, but yet only
paid $4,641 in tax.
It sounds like a rounding error to me.
Many individual Australian workers would pay a lot more tax than that.
For example, using the ATO’s Simple tax calculator, a worker earning only $52,000
a year would have to pay $8,447 in tax, almost double what an $11 billion company had to
pay.
Ah yes, Australia certainly treats its citizens fairly.
ATO deputy commissioner Rebecca Saint, commented on these recent corporate tax results.
She said,
“The positive trend we are now observing is that many companies have ceased generating
accounting losses, and are now offsetting profits by utilising losses from prior years.
We expect many companies to exhaust these losses and begin paying income tax in the
coming years.”
Sounds like positive thinking.
In defence of at least some of the companies, Ms Saint said,
“We look at the tax positions of these large companies very, very closely.
And we have observed that companies can and do make losses as part of usual business practices.”
Campaigns Director at the Australian political activist group GetUp! says that the Australian
taxation system needs to be overhauled.
He said,
“People are sick of waking up each December to find out they've personally contributed
more tax than massive corporations.
Wages have flat-lined, everyday people are feeling the brunt of a stagnating economy
and still paying more tax than some of the world's biggest corporations.
It's just not fair.”
Ah, Australia.
We’re like a reverse Robin Hood.
Take from the poor and give to the rich!
When asked about taking these big companies to court over tax bills, Ms Saint said,
“It is not possible to litigate each and every case, nor is it an effective use of
resources.
We are looking for taxpayers to make changes in their compliance behaviour going forward.”
Basically, it costs the Government too much money to fight these giant companies in court,
so it’s cheaper just to let them pay no tax.
Anyway, that’s how you pay no tax in Australia.
Become a big company who can pay for lots of lawyers and accountants and scare off the
ATO.
Cheers.