The tax office has revealed 36% of the largest public companies and multinational entities in Australia paid no tax in the most recent financial year on record.
It means there has been no significant shift in the proportion of companies paying no corporate income tax in Australia since 2013.
It covers the 2015-16 financial year, revealing key details of 2,043 of the largest companies with operations in Australia.
It shows corporate tax collected from Australia’s biggest companies in 2015-16 was 8.7% lower than in 2014-15 – a decline from an annual $41.9bn to $38.2bn – as the number of entities paying no corporate tax increased from 678 to 732.
ATO deputy commissioner Jeremy Hirschhorn said the multibillion-dollar fall in tax payable between 2014-15 and 2015-16 was not a sign of companies avoiding tax.
He said the fall was “almost entirely due” to the dramatic decline in iron ore and coal prices in 2015, which saw the mining giant BHP Billiton post a $7.8bn loss.
“The significant reduction in tax payable was overwhelmingly driven by the energy and resources segment, reflecting a decline in the average Australian dollar prices for iron ore and coking coal of 16% and 10%, respectively,” an ATO spokesman said.
“Results were relatively steady among other industry segments.”
But Mark Zirnsak from Tax Justice Network Australia says tax avoidance is obviously still rife in Australia.
“There are still companies … hiding amongst those that have legitimately made a loss or have legitimate deductions,” he said.
“That is less money for hospitals, schools, family violence support, support for people with disabilities and mental health needs. The government has failed to address the issue they themselves have identified, where an increasing number of corporations are restructuring to be ‘stapled securities’ to avoid having to pay tax in Australia.”
GetUp campaigns director Django Merope Synge also claimed tax avoidance was a huge problem.
“It’s time for large corporations to stop ripping off everyday Australians and start contributing their fair share,” he said.
The ATO’s report lists the total income, taxable income and tax payable for each entity. It says a company has not necessarily done anything wrong if it has not paid tax on its taxable income.
It says while the majority of entities in the data made profits and paid tax in 2015-16, sensitivity to economic conditions, reinvestment back into the business, distribution of profits to other entities within the broader group, tax deductions and tax offsets could affect the amount of taxable income and tax payable for each entity.
But it shows a range of household names paid no or little tax in 2015-16:
- Adani: $0 tax paid on $724m revenue.
- Chevron: $0 tax paid on $2.1bn revenue.
- ExxonMobil Australia: $0 tax paid on $6.7bn revenue.
- Origin Energy: $0 tax paid on $11.9bn revenue.
- IBM: $0 tax paid on $3.6bn of revenue.
- Ansell: $0 tax paid on $326m of revenue.
- Glencore: $44m in tax paid on $24bn of revenue.
- Ikea: $11m tax paid on $1bn of revenue (its first tax paid in the last three years).
A breakdown of the data shows Australian-based companies also paid the lion’s share of corporate tax.
Of the 1,073 foreign-owned entities (out of 2,043) covered in the report, comprising over half of the corporate entities involved, they accounted for one-quarter of tax payable, while Australian public entities accounted for just 30% of the corporate entities covered but accounted for 69% of the tax payable.
Companies covered in the report include Australian public and foreign-owned entities with total income of $100m or more, and Australian-owned resident private entities with total income of $200m or more.
The data also reveals details of the controversial petroleum resource rent tax, which has been the subject of two separate inquiries following concerns it is failing to generate adequate revenue.
The ATO says the decline in PRRT payable reflects the lower profitability of PRRT liable companies in 2015–16.
“Oil prices are a key driver of PRRT payable and, in 2015–16, global oil prices declined by 41% due to lower demand for energy resources,” the ATO said.
“The decline in oil prices more than offset the 13% decline in the Australian dollar, which generally has a positive impact on the profitability of PRRT liable companies.”