The Australian Taxation Office has released its corporate tax transparent report, which revealed that dozens of information technology and communications companies failed to pay any tax in 2014-15.
The list provides tax data of almost 2000 companies, including 1579 Australian public and foreign-owned companies with income of $100 million or more and 325 Australian-owned private companies with $200 million or more in income.
It includes many well-known IT vendors, distributors and resellers, some of which failed to pay taxes during the period despite generating taxable incomes.
Vendors that turned a profit yet did not pay tax include $3.6 billion-turnover IBM Australia and New Zealand, which had a taxable income of $49.3 million but paid zero tax, Schneider Electric, which saw taxable income of $32.5 million, Atlassian, whose taxable income was $34.6 million, and Citrix, a taxable income of $11.1 million.
Other global tech companies failed to pay tax because they did not generate profits: these included Acer, Hewlett Packard, NEC and Vodafone. Neither Dimension Data nor its sister company, NTT Communications ICT Solutions, posted a profit, and so did not pay any taxes.
Commissioner of Taxation Chris Jordan stressed that "no tax paid does not necessarily mean tax avoidance" and that the tax office was doing its job – "there are no surprises here for the ATO".
"Today’s information provides more transparency for the community on the operations of these entities, but it does not change the level of transparency they have with the ATO. We already have access to far more detailed information and regularly engage with and assure the tax behaviour of these major players in the Australian economy.
"The data is historical. It doesn’t reflect recent changes to our administration of the tax system, from the recently introduced Multinational Anti-Avoidance Law (MAAL), work undertaken through the Tax Avoidance Taskforce or any ATO interventions undertaken with these taxpayers over the last two years.
"Consistent with our last release and actual accounting results reported to the ASX more broadly, about one third of taxpayers on the list reported no tax payable. Even companies with very high total income sometimes make losses and you will no doubt recognise some large Australian organisations on the list that fall into this category, Qantas for example. As we have explained in our contextual material on ato.gov.au, there are many legitimate reasons why this might be the case."
Channel taxes
Among the IT distributors, Ingram Micro, Dicker Data, and Hills each had zero taxable income so paid no tax. Avnet and Westcon both paid the 30 percent tax rate, while Synnex and Distribution Central paid close to the corporate tax rate. The largest profit of any distie in dollar terms was Synnex, with a 2015 taxable income of $18 million on revenue of $1.8 billion, while Distribution Central had the largest gross profit margin, at 3.2 percent.
Dicker Data has explained why it did not pay tax for the 2015 financial year, which was impacted by the distributor's transition of its financial year to a calendar reporting period, as well as its acquisition of Express Data.
The company reported a tax loss for the period, "but are now back to paying the full 30 percent company tax rate, which equated to $7,554,932.10 for our 2016 tax return", said a Dicker Data spokesperson.
A number of telecommunications companies paid less than the 30 percent corporate tax rate. Amaysim posted $6.3 million of taxable income but paid zero tax and Macquarie Telecom had a taxable income of $2.7 million and no tax. Amcom paid 12 percent tax on a taxable income of $6.7 million, while the company that acquired it in 2015, Vocus Communications, paid 28 percent tax rate of $8 million on taxable income of $29.1 milllion.
Apple, which has been much-scrutinised over its tax policy, paid a 30 percent tax rate of $146.3 million on taxable income of $488 million. However, the iPhone maker's total income was $8.3 billion, reprenting a gross profit margin of under 6 percent for what is understood to be one of the world's most profitable companies.
Google paid an 11 percent tax rate: $12.2 million on a taxable income $106.1 million. The search giant's total income was $438 million.
Microsoft's total income was $679 million, its taxable income was $111.1 million and it paid $33.3 million in tax, hitting Australia's 30 percent tax rate.
Telstra's total income was $25.7 billion, its taxable income was $6 billion and it paid $1.7 billion in taxes – by far the biggest tax bill of any ICT company on the list.
Optus parent Singapore Telecom (Singtel) posted $8.9 billion in total income, $962.6 million in taxable income and paid $263.5 million in tax for 2014-15.
The full list can be downloaded here.
Updated 1.00pm 13 December 2016 to include comments from Dicker Data
.png&h=142&w=230&c=1&s=1)
.png&w=100&c=1&s=0)
.png&h=298&w=480&c=1&s=1)
