Big companies, whether locally grown or multinationals coming to Australia to do business, appear highly skilled in keeping tax payments to a minimum.
About one-third of Australia’s biggest companies, and foreign entities operating here, actually paid no tax last financial year.
According to analysis by the Australian Tax Office (ATO), 960 paid tax, but 579 companies didn’t, many of them large foreign companies.
The corporate tax transparency report report lists public and foreign entities, including foreign private companies, with total income of $100 million or more.
However, not paying tax doesn’t mean a company has been doing a little tax minimisation. Many of the list showing no tax paid made losses that year or have carried previous losses forward to reduce tax payable.
Companies not paying tax in 2013-14 include Qantas, which was then restructuring the business but still had almost $15 billion in income. The airline is now running in profit and, possibly, will be paying tax this financial year.
Others in the same boat include Virgin Australia, Bluescope Steel, Treasury Wine Estates, Nine Entertainment and Downer EDI.
Among the subsidiaries of foreign companies operating in Australia are Chevron which reported more than $3 billion in income but no tax paid.
Chevron Australia recently lost a court case brought by the ATO which challenged the use of loans by US subsidiaries to claim interest rate costs. Chevron is appealing the decision, but the ATO is also investigating other transactions.
News Australia Holdings Pty Ltd, the main local holding company for US-registered News Corp, reported $2.8 billion in income but again no tax was paid.
Mitsubishi Development Pty Ltd, which holds Mitsubishi’s mineral resources investments in Australia, reported $4.6 billion in income. No tax was paid.
The big tech companies did pay some tax.
Apple reported $6.152 billion income and then paid $74.1 million in tax. That’s about 1.2% of the reported total income. Its taxable income — what was left after subtracting allowable costs — was $247.36 million and the tax paid represents about 30% of that, the same as the company tax rate
Microsoft booked $567.752 million and paid about 5.5% of that in tax, or $31.16 million. That’s about 30% of its taxable income of $103.88 million.
Google had $357.73 million and paid about 2.6% of that in total income, $9.2 million, in tax. That’s about 10% of its reported taxable income of $90.89 million.
BHP Billiton was the biggest taxpayer. Its total income was $40.5 billion and tax paid was $3.9 billion, about 9.6%. Its taxable income was $13.7 billion, so the effective tax rate was about 28.5%.
Wesfarmers reported the largest income at $67.4 billion and paid a little bit more than $1 billion in tax, or about 1.5% of the total and an effective rate of about 26% on its taxable income of almost $3.8 billion.
Woolworths, which is currently struggling with flat sales at its supermarkets, had almost $50 billion coming in and paid $910.8 million tax. On its taxable income was $3.167 billion, it paid an effective tax rate of almost 29%.
Foxtel Cable Television Pty Ltd, the dominant pay television service owned by News and Telstra, reported $1.9 billion in revenue but no tax was paid. Apparently its costs were so high that there was no taxable income to report.