ATO Assistant Commissioner Michelle Sams says there are legitimate reasons why some entities don’t pay tax. Photo: ATO
Big business in Australia paid $95.7 billion in income tax in the 2023-24 financial year, despite almost a third of large corporations not paying any at all.
The Australian Taxation Office (ATO) has published its annual Corporate Tax Transparency (CTT) report, revealing that the income tax take from big companies for that period was the second-highest combined total ever recorded.
The ATO is required under law to publish tax information reported by certain large companies each year.
The tax transparency for the year of this report covers 4110 corporate entities, made up of 1712 foreign-owned companies with an income of $100 million or more; 583 Australian public entities with an income of $100 million or more; and 1815 Australian-owned resident private companies with an income of $100 million or more.
It is the second year in a row that large businesses have paid in excess of $100 billion in taxes, when combined with the results from the ATIO’s compliance programs for large businesses, but this amount is slightly down from the previous year.
Tech and social media giants operating in Australia – Meta, Google, Amazon, Netflix and Disney – paid $254 million in tax from a massive $15 billion in total revenue.
Twenty-eight per cent of firms earning more than $100 million paid no tax at all, which is the lowest take in the report’s 11-year history.
These were mostly companies operating in the mining, energy, water, gambling and airline sectors.
ATO assistant commissioner Michelle Sams said there can be legitimate reasons why entities do not pay tax, for example, they have an accounting or tax loss, or they utilised tax offsets or losses from previous years.
“Australia has some of the highest levels of tax compliance of large businesses in the world, with 94.1 per cent of tax paid voluntarily, and 96.3 per cent after ATO’s compliance actions,” she said.
“For the first time since CTT reporting began, the amount of entities paying no tax has dropped below 30 per cent.
“This is the lowest proportion of nil tax entities in 11 years of CTT reporting and in part reflects the continued efforts of the Tax Avoidance Taskforce in holding large corporates to account.
“While there are legitimate reasons why a company may pay no income tax, the Australian community can be assured we pay close attention to those who don’t pay corporate tax and ensure that they are not gaming the system.
“Continued investment in the Tax Avoidance Taskforce bolsters our efforts to identify and take action against those companies that don’t pay the right amount of tax.”
The Greens have jumped on the figures as evidence that big corporations are “still ripping Australians” off when it comes to avoiding tax.
Greens economic justice spokesperson Nick McKim said the numbers prove the system has been “totally corrupted”.
“Almost one in three big corporations paid nothing. That’s an economy-wide rip off,” Senator McKim said.
“Corporations that are wrecking the climate, destroying nature and sucking profits out of our communities are dodging tax, which leaves working Australians to make up the difference.
“You know the system is cooked when people going to work every day as nurses, cleaners or plumbers are paying more tax than nearly a third of big corporations.
“Working people don’t get the option of skipping their tax bill. But big corporations keep buying their way out of it, and Labor and the Liberals keep letting them.”
The ATO reports that more large oil and gas companies moved to a tax payable position in 2023-24, as carry-forward losses were depleted.
Corporate tax paid by the oil and gas segment for the year was $10.4 billion.
The ATO’s report also showed the number of companies paying the Petroleum Resources Rent Tax had jumped from 11 to 16 in 2023-24 due to new rules capping deductions having come into effect, with total PRRT payable of $1,483.3 million.
The Federal Government provides specific funding to the ATO for the Tax Avoidance Taskforce, which significantly enhances the ATO’s ability to focus on the compliance of large public and private groups, as well as high-wealth individuals.
