ATO reveals more than 1,200 companies paid no tax last financial year

ABC NEWS (Australia)

The Australian Taxation Office's annual corporate tax report has revealed more than 12-hundred companies paid no tax in the past financial year. Of the nearly 4,000 firms that lodged their returns around 30 per cent did not pay tax.

Transcript

00:00The ATO sets the bar globally for corporate tax compliance, and as a result we see some

00:08of the highest corporate tax compliance in the world.

00:12Just because companies aren't paying tax, it's important to note, doesn't mean that

00:15they're actually involved in tax avoidance.

00:18There can be legitimate reasons why companies are not paying tax.

00:22Of course, as part of our activities of the Tax Avoidance Taskforce, we pay close attention

00:27to those companies that don't pay tax, and really seek to scrutinise and understand why

00:32that is the case.

00:33First of all, you have to make a profit to pay tax, and there can be genuine financial

00:39or economic reasons why a company is not profitable.

00:42There's also other reasons that you may not pay tax.

00:45You might have made losses in earlier years that you can carry forward and offset against

00:49tax in future years, or you might be able to be entitled to tax offsets that may also

00:54mean that you're not paying tax in that year.

00:57As I said before, and I just want to reiterate for your viewers, we look at all these aspects

01:01closely as part of the Tax Avoidance Taskforce, and make sure that where companies are not

01:06making profits, that it is really the result of commercial genuine reasons.

01:11In the past, we've had a real significant focus across the energy and resources sector

01:16in particular, but of course we look across all sectors more broadly as well.

01:21Our strong focus though on the energy and resources sector, and in particular oil and

01:25gas, has really brought about significant results and changes in tax behaviours.

01:31Some of the strong results that we saw coming through the data this year did relate to the

01:35oil and gas industry.

01:37We saw them pay $11.6 billion in tax in the report.

01:42We estimate about $4.3 billion of that was a result of earlier ATO interventions.

01:48So certainly interventions in the oil and gas sector, and mining more generally, have

01:52really paid off for the Australian community.

01:55In terms of disputes that we've seen this year, we've issued assessments against 124

02:02taxpayers for $2.7 billion.

02:06The bulk of that though relates to disputes with 24 taxpayers, and that's for about $2.5 billion.

02:13These taxpayers though, some of those will be tax payable, so they're in a different

02:17cohort from the 30% that you're talking about before that didn't pay tax for the year.

02:23The report has been expanded to include private entities that have income between $100 and

02:28$200 million.

02:30This really now makes sure that the population is all set at the same criteria.

02:35This brought about through legislative change, and it's designed to increase transparency

02:40and voluntary compliance of these businesses.

02:44Of course we focus across the whole population, but we do recognise that tax is highly concentrated

02:50in the largest entities.

02:51So the largest 100 entities paid almost 75% of all the corporate tax in the data set,

02:58and we have these entities under continual monitoring, and have dedicated teams that

03:04are reviewing their business affairs and tax outcomes year round.

03:08We welcome the introduction of the minimum tax globally.

03:13We do think it is going to help to minimise profit-shifting activities globally.

03:19Because there still is a difference between a 30% and 15% tax rate, we think whilst it

03:24will help minimise some of that behaviour, we still do think that Australia is going

03:28to be exposed to profit-shifting activities, and so the ATO will continue to monitor and

03:34track those dealings very closely.

03:38For more information, visit www.fema.gov.au

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