Some of the world's largest technology giants escaped paying any Australian tax last year, new data released by the Australian Taxation Office reveals .
Tax yesterday published its fourth annual transparency report into the tax records of the country’s biggest companies during the 2016-17 financial year.
It covers some 2160 Australian public and foreign-owned companies with incomes of $100 million or more and Australian-owned resident private companies with an income of more than $200 million.
The report reveals that 751 of these paid no tax in Australia in 2017, including the following technology companies (slow drum roll please):
- Acer
- ASG Group
- Atlassian
- Capgemini
- Citrix
- Dimension Data
- DXC Technology
- Fuji Zerox
- Hills Limited
- IBM
- Ingram Micro
- Hewlett Packard
- NBN Co
- NEC
- NEXTDC
- NTT Australia
- Ricoh
- SAP
- Sharp
- Nuance Group
- Toshiba
- Vodafone
The majority of these avoided paying tax as they did not generate any taxable income during the 2016-17 financial year.
Some of this can be explained by losses, both for tax purposes or accounting purposes, or signal a company is using offsets against their profits to reduce their tax obligations.
Australia sure is tough.
The companies include solutions provider Hewlett Packard, which brought in $1.93 billion revenue, Dimension Data ($1.25 billion revenue), NEC ($427.9 million revenue), Capgemini ($317.8 million revenue), Nuance ($182 million revenue).
Software giant SAP ($907.1 million revenue) was also present on the list, as well as distributor Ingram Micros ($2.01 billion revenue) and vendors Acer ($313.1 million revenue) and Ricoh ($407.3 million revenue).
Loss-making telcos were Vodafone ($3.35 billion revenue) and NBN Co ($1.05 billion revenue).
However, there were also a smattering of companies who paid no tax despite generating taxable income during the 2016-17 financial year. They include:
- IBM Australia & New Zealand, which posted revenue of $3.31 billion and $17.7 million of taxable income.
- DXC Technology, which turned over revenue of $1.44 billion and $1.2 million of taxable income.
- Atlassian, which generated revenue of $774 million and $117.1 million of taxable income.
- BAE Systems Australia, which turned over revenue of $1.08 billion and $39.7 million of taxable income.
- Citrix Systems, which brought in $291.9 million revenue and $4.9 million of taxable income.
IBM, Atlassian and Citrix also paid no tax in 2015-16 despite generating a taxable income.
But the ATO's second commissioner Jeremy Hirschhorn was quick to warn assuming zero-taxpayers dodging their obligations, noting that corporate income tax is payable on profits and not gross income.
He also said the 2016-17 data was first to show the initial impact of the Multinational Anti-Avoidance Law targeting tax avoidance and profit shifting.
The laws, which came into effect in December 2015, required multinationals with an annual global income of $1 billion or more to restructure local operations to count revenue generated from Australia in the country or face penalties of double tax.
Tax collection grows
Changes to tax laws saw improvements in the tax receipts from a number of technology companies.
Apple, which reported revenue of $8.07 billion, paid $81.4 million based on a taxable income of $271.5 million.
This put the iPhone maker’s margin of taxable income to revenue at the Australian corporate tax rate of 30 percent - its largest in years.
Google - one such company that restructured its local operations in the wake of the new laws - turned over $1.49 billion and paid $33.1 million on a taxable income of $177.6 million in 2017.
This was an improvement on 2016 when its effective tax rate was 13.2 percent, however it is still well below the 30 percent corporate tax rate at 18.6 percent.
There were also other outliers such as Technology One, which paid $8.6 million on taxable income $85.5 million - an effective tax rate of 10 percent - and Unisys, which paid $1.3 million on taxable income $10.5 million (12.4 percent)
Other IT companies that paid the 30 percent tax rate - or just under - include:
- Tata Consultancy Services, which paid $12.7 million on taxable income $42.2 million and $521.7 million revenue.
- Microsoft, which paid $53.5 million on taxable income $178.4 million and $1.06 billion revenue.
- Vocus, which paid $26.2 million on taxable income of $87.7 million and $1.51 billion revenue.
- AWS paid $3.5 million on taxable income $11.7 million and $124.7 million revenue.
- Wipro paid $5.7 million taxable income $18.9 million and $261.3 million revenue.
- TPG, which paid $199.9 million on taxable income of $673.1 million and $2.5 billion revenue.
- Dell, which paid $16.6 million on taxable income $55.8 million and $271.3 million revenue.
- Cisco, which paid $23.4 million on taxable income $79.1 million and $1.89 billion revenue.
- Telstra, which paid $1.64 billion on taxable income of $5.68 billion and $26.95 billion revenue.
- Data#3, which paid $6.3 million on taxable income $22.2 million and $1.09 billion revenue.
- Accenture, which paid $24 million on taxable income $89.2 million and $1.83 billion revenue.
- Datacom, which paid $2.8 million on taxable income of $10.4 million and $462.4 million revenue.
- Singtel, which paid $216 million on taxable income of $813.2 million and $8.59 billion revenue.
