The Australian Taxation Office released its 12th corporate tax transparency report, covering 4,299 entities that lodged tax returns for the 2024-25 financial year, ABC News reported. Of those entities, 1,149 (27%) paid no tax, while 3,150 (73%) did pay tax.
The proportion of large corporates not paying income tax reached its lowest point since transparency reporting started in 2013-14, a year when 36% of companies paid no tax. The ATO is required by parliament to publish tax information for all entities generating at least $100 million in Australian income.
Among companies that generated large Australian revenues while paying no income tax in 2024-25: Microsoft's datacentre business recorded $2.3 billion in revenue but reported no taxable income, Singtel generated more than $8.3 billion in total income but paid no tax, the Ichthys LNG project generated $9.7 billion in income, AGL earned $13.1 billion, JBS Global Meat Holdings generated more than $4.8 billion in revenue, and Fonterra had more than $2.4 billion in total income. Microsoft's computer and software business paid $160.6 million in tax after generating more than $9.2 billion in revenue in Australia. Netflix paid $8.4 million in tax after generating more than $1.4 billion in local revenue, and TikTok Australia paid $17.3 million in tax after recording $686.6 million in revenue.
ATO acting deputy commissioner Michelle Sams said a nil tax result does not by itself indicate wrongdoing, and noted that companies may pay no tax for legitimate reasons such as making an accounting loss or using offsets. Sams said the ATO was directing increasing attention to digital business models and supply chains, including cloud computing and the data hosting industry, and was examining whether tax outcomes in that sector matched the economic activity occurring in Australia. Where multinationals make large payments to related offshore parties that reduce Australian taxable profit, the ATO examines the nature of those payments, Sams said.
Petroleum resource rent tax payable rose by more than 26%, from $1.48 billion in 2023-24 to $1.87 billion in 2024-25, the second-highest amount since reporting began. Growth in the number of taxpayers meeting their obligations under the deductions cap was the main driver behind higher receipts. Mining, energy and water remained the biggest segment for corporate tax, contributing 41.1% ($35.9 billion) of the total, though that figure was down 25.8% ($12.5 billion) on the prior year.
Jason Ward, principal analyst at the Centre for International Corporate Tax Accountability and Research, described how companies use Singapore as a marketing hub, selling coal or LNG to a subsidiary there so that profit from the raw material is booked in Singapore rather than Australia. Technology companies reduce tax bills by placing intellectual property in low-tax jurisdictions so that value from Australian sales is taxed at a lower rate elsewhere, Ward said. Singapore's official corporate tax rate is 17%, and the jurisdiction also offers negotiated tax concessions and discretionary incentives.
The ATO is actively scrutinising digital business models, data centres, cloud computing, royalty arrangements and foreign private equity disposals for compliance, which increases the likelihood of audit or additional tax assessments for companies operating in those sectors. Parliament's passage of revamped media bargaining laws in August creates the mechanism for levies on global technology platforms that do not reach commercial agreements with Australian news organisations.
Reporting: ABC News, The Guardian
Written by Pick & Scroll News from the reporting and documents linked above.
