Scandal-ridden telco Optus, the world’s biggest meat producer, global tech firms and huge gas producers are among a host of major companies earning billions of dollars a year but paying zero income tax.
The latest corporate transparency report from the Australian Taxation Office revealed a string of mostly multinational firms continue to pay no or very little tax on income in Australia, including household names such as Netflix, Apple and Microsoft.
Singapore Telecom, the locally registered owner of Optus, earned $8.2bn in 2023-24, but reported zero taxable income and paid no tax on that, the ATO data showed.
Tax minimisation was most evident among multinational firms, but wasn’t only the domain of hi-tech firms.
The Brazilian-owned JBS Global Meat Holdings earned $19.7bn in Australia in 2023-24 – putting it just inside the top 20 businesses by income.
But it paid zero tax on that income.
The ATO report provides no detail as to why companies paid zero tax, and noted there were entirely legitimate reasons for it – including making a loss, or using deductions and offsets to lower the taxable income and tax payable.
It’s unclear why JBS pays no tax, although the firm has an international reputation for its tax-minimisation strategies. There is no suggestion of wrongdoing.
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Other overseas-owned firms paying little or no tax were: Persol Australia, the Japanese owner of Programmed Maintenance; Saputo, registered anonymously as ACN 116 119 133 Pty Ltd but which is one of the largest dairy companies in the world; and ANZ Hospitals Topco, formerly listed as Healthscope and owned by Canada’s Brookfield.
Motorists in Sydney paying among the world’s highest road tolls may be shocked to hear that Transurban, which owns many of those roads, earned $3.2bn in 2023-24 but paid zero income tax, due to a legal arrangement where its profits are funnelled through a trust and tax is paid at an investor level.
Jason Ward, a principal analyst at the Centre for International Corporate Tax Accountability and Research (Cictar), said while the ATO was one of the best in the world at getting multinationals to pay their fair share of tax, the latest report showed there was still a long way to go.
“Generally most Australian companies do the right thing and are relatively decent taxpayers,” Ward said.
“Most of the abuse we see comes from the big multinationals, and big US multinationals in particular. A big exception to that is CSL.”
The blood-based medicines firm – a champion of Australian industry – earned $5.2bn in 2023-24, reported taxable income of just $253m, and paid no tax – and not for the first time, Ward said.
CSL was the only Australian company to lobby against the new country-by-country reporting rules, which start from this financial year and are designed to shine light on profit shifting.
Ward said CSL’s Swiss operations generated 10 times more profit per worker than in Australia.
A spokesperson for CSL said the company paid US$784m in corporate income taxes globally, and that it “pays taxes in the jurisdictions where we make profits and the majority of CSL’s tax is paid in the countries where we have the most significant operations”.
“This reflects OECD transfer pricing principles of aligning economic return in a country with the value creation occurring in that country,” the spokesperson said.
They also said that CSL was a “significant” investor, and that this investment in R&D provided a material offset to the company’s taxable income in Australia.
Ward said while there was evidence that some of the big tech companies were paying tax, it was “pretty minimal compared to what they should be paying”.
Apple earned $12.4bn in 2023-24, and paid just $154m in tax. It reported taxable income of $529m – a profit margin of just 4.3%. This compared with its global profit margin of more like 25%, said Ward.
It was a similar story with Microsoft.
“That signals something is going on there in terms of profit shifting. It’s time for Australia to revisit a digital services tax,” Ward said.
Profit shifting is not illegal under Australian law and is used legitimately as a tax minimisation strategy.
The ATO’s report showed the big miners and banks were by far the biggest contributors to the company tax take in 2023-24.
Rio Tinto and BHP Group were the two biggest taxpayers for the financial years, contributing more than $6bn each, followed by Fortescue’s $3.9bn and Chevron’s $3.5bn.
CBA, Westpac and NAB were also among the top 10 taxpayers, and the 20 biggest taxpayers accounted for more than 40% of the roughly $100bn in total tax paid in the year.
But Ichthys LNG – which operates one of the world’s biggest gas fields on the north-west coast of Western Australia – paid zero tax despite earning $10.7bn in the year.
Santos, another major gas player, earned $8.2bn and paid no tax.
The ATO report, however, showed the share of big companies paying zero tax has dropped, from 36% a decade ago to 28% now.
Patrick Commins is Guardian Australia’s economics editor
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