Australian Companies Skipping Out on Income Tax
December 18, 2015 Taxation in Australia
CANBERRA – Many of Australia’s largest companies are paying less than 5 percent tax on their incomes, with a significant portion not paying any income tax at all.
According to information in a new report issued by the Australian Tax Office on December 17th, approximately 600 of Australia’s largest companies paid no income tax in the 2013-14 financial year.
The latest information came as part of a report on fiscal and tax transparency, and contained analysis of the tax affairs of 1 539 companies with earnings of more than AUD 100 million over the course of the year.
It was found that 579 of the companies paid no income tax due to either receiving rebates, making a loss, or not paying taxes owed.
The report claimed that not paying taxes on incomes is not indicative of illicit behaviour, as many businesses may have legitimate reasons to have low tax bills, such as carrying forward losses from previous years.
Along with the companies which paid no tax, it was also shown that 277 companies paid taxes equivalent to 1 percent of their total income, 170 paid 2 percent of their income, 119 paid 3 percent, and 79 paid 4 percent, while only 172 paid 5 percent or more.
It was noted that while tech companies often paid little or no tax, the banking sector and the mining sector had some of the highest tax bills, both as a proportion of their income and as absolute monetary amounts.
Photo by: Corey Leopold