More than 1,000 of Australia’s largest companies paid no corporate tax in the 2023/24 financial year, according to new figures from the Australian Tax Office (ATO).
The ATO’s annual corporate tax report, released today, covers private, public, and foreign-owned companies with incomes of at least $100 million.
There are several legal reasons why companies may not pay tax. TDA is not suggesting any firm acted unlawfully.
Company tax
Companies are taxed on their profits: the total earnings they make minus expenses.
Under Australian tax law, companies that operate at a loss don’t have to pay tax. Australia also lets companies “carry forward” losses into future years. That means a big loss in one year could be spread out to reduce tax to zero over several years.
This year saw the lowest percentage of companies paying zero tax in the past decade.
Similar to individual taxes, companies can claim a range of ‘deductions’ which reduce their tax bill.
During the COVID years, the Government introduced a support measure that allowed companies to “carry back” losses. That meant businesses with large losses during COVID could effectively get a refund on the tax paid in previous years.
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The ATO does monitor for illegal underpaying, but these figures don’t include the results of that monitoring.
Comments
The Government attributed the decline in the number of companies paying no tax to its investment in the ATO.
The Greens called Australia’s tax system ”cooked”, accusing major corporations of “ripping Australians off” by avoiding tax.
TDA reached out to the Opposition for comment, but did not receive a response by the time of publication.
