Australia’s Largest Companies Avoiding Taxes
September 30, 2014 Taxation in Australia
CANBERRA – Australia’s largest companies are actively taking steps to lower avoid their taxes, with 14 percent of companies paying no taxes at all.
Approximately one third of the companies in the Australian ASX 200 pay an effective tax rate of less than 10 percent and 57 percent of the companies have subsidiaries in secrecy jurisdictions, according to the result in a new report issued on September 30th by the independent group United Voice.
The experts of the United Voice noted that alongside the 29 percent of companies which pay less than 10 percent tax on their earnings, another 14 percent of companies pay no tax at all, while the headline tax rate of 30 percent.
The tax avoidance committed by these largest companies in Australia amounts to a loss of tax revenues equivalent to AUD 8.4 billion dollars per year.
It was also noted that over the last 5 years income taxes collected from companies in Australia made up a decreasing portion of all the taxes collected, falling from 23 percent to 19 percent, while at the same time the portion of income taxes from individuals rose from 37 percent to 39 percent.
United Voice also noted that 57 percent of the ASX 200 companies hold subsidiaries in offshore jurisdictions, while 60 percent of the companies have debt to equity ratios above 75 percent, a move which may help artificially reduce profits.
Photo By: Martin Howard