A new report has revealed that more than 1,200 companies paid no tax in the past financial year. The Australian Taxation Office's annual corporate tax transparency report shows that of the nearly 4,000 firms that lodged their returns, around 30 per cent did not pay any tax.
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00:00So the ATO's data looks at about 4,000 entities, so this year they've actually included more
00:10companies in their report, they've included private companies with turnover of between
00:15$100 million and $200 million, as well as all the large multinational companies.
00:21And what the data shows is that of those 4,000 entities, or almost 4,000, more than 1,200
00:27of them did not pay a cent of tax.
00:30Nassim, what are the reasons they're giving for not paying tax?
00:34So there's a lot of reasons, and many of them are legitimate reasons, why a company can
00:40reduce its tax bill.
00:42One of those reasons is it actually hasn't made a profit in that financial year, so this
00:46is looking at the 2022-23 financial year.
00:51Another reason is that it might have had profits, but then it could offset those profits again
00:57against losses that it's made, so it basically claims those, or it claims tax deductions.
01:05You know, you and I can also claim tax deductions on our tax return, although they're not nearly
01:10as high as what these big corporates claim.
01:13And then they can also offset prior year losses against their current tax bills.
01:19What then is the ATO saying about the level of profit shifting?
01:25So there is still profit shifting going on.
01:28There's a global plan that was put out by the OECD, and that plan is now talking about
01:34a global minimum tax rate of 15%, but Australia's tax rate is still at 30%, and so even if companies
01:42are paying the global minimum tax rate, it's still far from 30%.
01:47And the ATO is saying that they're seeing a number of companies, particularly in food
01:51and beverage, in technology, but really across the board, that are profit shifting, that
01:57are not declaring income here that they should be declaring.
02:00Nassim, thank you.