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.
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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