Household names among billion-dollar companies that didn’t pay a cent to ATO


The Australian Taxation Office has released its fifth annual report on corporate tax transparency, publishing the tax details of more than 2,000 entities for the 2017-2018 financial year.

Australia reaped $52.3 billion in corporate tax for the 2017-18 year, a respectable increase of $6.6 billion on the previous tax year, deputy ATO Commissioner Rebecca Saint said on Thursday.

However, almost one third of large companies that made a gross profit managed not to pay a cent of tax in 2017-2018, ostensibly because the net income they recorded – what’s left after outgoing costs – was zero.

There is no suggestion any of these companies intentionally avoided paying tax.

They may be carrying over financial losses from previous years, which they are entitled to do under Australian taxation law.

‘Positive trend’

“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,” Saint said.

“We expect many companies to exhaust these losses and begin paying income tax in the coming years.

“However, companies that consistently report sustained losses do raise a red flag.

“The community should be reassured that we closely scrutinise the tax affairs of the largest companies.”

Here are some of the billion-dollar plus companies that, according to ATO records, paid no income tax in the 2017-2018 financial year.

Goods and Services

Virgin Australia Group suffered financial losses and was hit with large upfront capital investments in its fleet in 2017-2018, a Virgin 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,” he said.

“There are a number of changes underway to improve the financial performance of the company.”

A spokesman for Fonterra said the dairy giant had an “open and transparent relationship” with the Australian Tax Office and complied with all tax and financial reporting obligations in Australia.

The New Zealand owned company had paid the correct amount of tax for 2017-18, he said.

Steel company BlueScope said as at June 30, 2018, it had recorded a shortfall of A$1.84 billion on its balance sheet because of losses it suffered pre-2016.

These losses were still being carried over into the 2017-2018 financial year.

“BlueScope will pay tax when those losses are fully utilised,” a spokesman said.

“BlueScope does pay tax in other countries.”

Elders said as it had a significant amount of carried-forward losses, it was not required to pay any company tax in the 2017-2018 financial year.

A spokeswoman said Elders had remitted around $87 million in other taxes to both federal and state revenue offices.

“Elders overarching tax management principles are to ensure all tax obligations are met and all taxes that are legally obliged to be paid are paid,” she said.

Property

A spokeswoman for Mirvac said the group paid a corporate tax rate of 30 per cent in previous tax years, but in 2017-2018 had incurred significant operating losses.

“Under tax law, and in line with government policy, Mirvac Limited has carried forward the unutilised prior year loss and offset it against its current year taxable income,” she said.

“The Mirvac Group takes its compliance with taxation laws very seriously.”

The ATO acknowledged that BPIH, owned by the Bermuda-based multinational Brookfield, had suffered historical losses.

“Those losses are a legitimate consequence of (our) business activities,” a BPIH spokeswoman said.

Energy

ExxonMobil Australia Pty Ltd recorded income of $9.2 billion, a taxable income of $0 and paid $0 tax in 2017-2018.
ExxonMobil Australia Pty Ltd recorded income of $9.2 billion, a taxable income of $0 and paid $0 tax in 2017-2018. Credit: Getty/ExxonMobil

A spokesman for ExxonMobil Australia said while its group of companies paid no tax in 2017-2018, it paid A$390 million in federal taxes in the 2018-2019 financial year, on its share of the Gippsland Basin Joint Venture.

“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,” he said.

“Through these investments, ExxonMobil Australia continues to contribute to Australia’s economic wellbeing by creating jobs, investing in the future and bringing reliable supplies of energy to help fuel growth.”

Santos Ltd recorded income of $3.5 billion, a taxable income of $0 and paid $0 tax in 2017-2018.
Santos Ltd recorded income of $3.5 billion, a taxable income of $0 and paid $0 tax in 2017-2018. Credit: AAP/ Santos

Santos also said it experienced significant losses in 2017-2018, after investing more than $21 billion in Australian projects that took at least four years to generate revenue.

“Santos has not been in an income tax-paying position in recent years,” the spokeswoman conceded.

“This is the nature of the tax system in Australia, which is based on profits and encourages capital investment through depreciation provisions.”

More on 7NEWS.com.au

The ATO also announced on Thursday that its Tax Avoidance Taskforce would be expanded, and extended to June 2024.

Scott Morrison is set to ramp up the pressure on internet giants with a push for a new global tax.



Source link Finance News Australia

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