Some of Australia’s biggest companies paid more in political donations than taxes in 2018-19 | Tax
New data has revealed that 192 of Australia’s biggest companies paid tax of 10% or less of their profits in 2018-19, including seven that paid more in political donations than tax.
Companies paying little to no tax in 2019, despite reporting profits, range from local arm of US fossil fuel giant ChevronChevron Australia Holdings, which had taxable income of $900 million but no tax payable, and Wilson Parking Australia 1992, the operator of Wilson Parking car parks in Australia, which paid no tax on a profit of 2.76 millions of dollars.
Australia’s corporate tax rate is 30%, but deductions legitimately available to businesses mean many pay less.
Tattarang Capital, a company owned by mining magnate Andrew “Twiggy” Forrest and his wife Nicola, paid tax of just under $400,000 on taxable income of $149.5 million, a rate of about 0.36%.
A company spokesperson said taxes had been paid on the company’s earnings “under Australia’s franking credit system”. Tattarang Capital received $148.2 million in dividends from holdings in Forrest’s Fortescue Metals group, on which FMG had already paid tax. The $400,000 paid to the ATO represented tax on the remaining $1.3 million in revenue.
Electoral Commission data shows Chevron Australia Holdings made political donations of $129,685 in 2019 – an election year that saw the Morrison government return to power – split between Labour, Liberal and Nationals.
Other companies paying more in donations than taxes include oil and gas group Santos, which also paid no taxes and donated $148,354, split among the same three political parties.
While Chevron was previously in the crosshairs of the ATO over its tax arrangements, many gas companies also have very large deductions due to the huge sums they have invested in developing new fields in Australia.
A spokesperson for Chevron Australia said the company “had an accounting loss for the year ended December 31, 2018”.
“Given our stage in the project lifecycle, this is no surprise,” he said.
The ATO released data on Thursday on earnings, taxable income and taxes paid by more than 2,000 of Australia’s biggest companies under transparency laws introduced by the Gillard government.
About 32% of companies in the data release paid no tax, usually because they suffered a loss.
ATO Deputy Commissioner Rebecca Saint Recount Guardian Australia businesses could not pay any tax for a range of legitimate reasons.
“It may be due to where they are in the economic cycle, during the construction phase for example, but not yet generating income,” she said.
“Then they won’t pay tax at that time. Likewise, when they start generating income, they will have losses carried forward that they can use in those future periods, which means they will not pay tax. We have to accept that it is completely legitimate and reasonable to expect this.
In 2019, Glencore Holdings, a subsidiary of Swiss mining and commodities trading group Glencore, paid $11 million in taxes on $110 million in profits, a rate of 10%.