Australia: First tax transparency report released, covers corporate taxpayers

Australia: First tax transparency report released

The Australian Taxation Office (ATO) released its first tax transparency report, outlining for the 2013-14 year, the tax information published by the ATO covering income tax of certain corporate taxpayers with total income of AUS $100 million or more.

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  • Of the 1,539 total number of companies disclosed in the ATO’s 2013-14 tax transparency report, there are 466 companies (30%) that are showing nil ($0) taxable income and 579 companies (or 38%) showing no tax payable—this information compares to the ATO guidance material that suggests that in any one year, 20-30% of the ASX 500 are loss-making entities. 
  • Of the total 1,539 corporate taxpayers, 985 (64%) are foreign-owned entities, and 554 (36%) Australian public entities.

Historically, the ATO’s large market analysis has focussed on annual turnover of $250 million and above.  An annual turnover of $5 billion and above was viewed by the ATO as a cut-off for higher consequence taxpayers.  As such, the ATO’s data-specific commentary focuses on breakdowns by the three income segments: (1) $100 million to $250 million, (2) $250 million to $5 billion, and (3) $5 billion and above.

KPMG observation

Detailed sector-specific information is not available from the dataset itself. However, ATO’s data-specific commentary provides some high-level statistics, based on five sectors: (1) banking and finance, (2) manufacturing, (3) insurance and superannuation, (4) energy and resources, and (5) sales and services.

From the accompanying Tax Commissioner’s Statement, there appears to be a strong inference that the ATO views some foreign-owned entities as “tax aggressive.” It also has been noted that there appears to be a significant proportion of such entities in the financial services sectors not paying any tax in Australia in the 2013-14 year (compared to the Australian public entities in those sectors).  On the other hand, a significantly lower proportion were nil tax-paying in the manufacturing sector.  Given the recent enactment of the Multinational Anti-Avoidance Law and transfer pricing developments, it is believed that the ATO will be focusing on foreign owned entities. 

 

Read a December 2015 report [PDF 72 KB] prepared by the KPMG member firm in Australia: On a page… First Tax Transparency Report Released

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