Australia’s transparency report shows one third of large businesses paid no tax

The Australian Taxation Office (ATO) today published its corporate tax transparency report, detailing revenue, taxable income, and tax paid by more than 2,000 large companies operating in Australia for the tax year 2015-16,

The report provides data on 2,043 entities, comprised of 1,693 Australian public and foreign-owned companies with an income of at least AUS 100 million (USD 75.12 million) and 350 Australian-owned resident private companies with an income of AUS $200 million (USD 150.24 million) or more.

According to the report, 36 percent of these entities paid no tax during the period at issue.

The ATO said that, of those not paying tax, 219 entities reported taxable income but were able to deduct prior-year losses; 59 reported a taxable income but were also entitled to offsets, such as the research and development incentive; 127 entities reported an accounting profit but tax deductions were allowed at higher rates than for accounting; and 327 entities reported an accounting loss.

Deputy Commissioner Jeremy Hirschhorn said that 2015-16 saw a significant drop in profitability of energy and resources companies, a sector where company profits are highly dependent on commodity prices.

He also said that the impact of Australia’s Multinational Anti-Avoidance Law (MAAL), estimated to increase sales in Australia by AUS 7 billion (USD 5.25 billion) each year, and Australia’s new diverted profits tax, are not yet reflected in the data.