ATO data shows about one-third of large companies have once again failed to pay a cent of tax.
About one third of large companies have once again failed to pay a cent of tax, even though they have made a gross profit, according to the Tax Office's latest corporate tax transparency report released today.The ATO's corporate tax transparency data again shows that hundreds of companies have been able to reduce their tax bills to zero
The ATO's report noted the increase was primarily driven by the mining, energy and water segment, off the back of strong commodity prices, which were up 15 per cent in Australian dollar terms in 2017–18. "We expect many companies to exhaust these losses and begin paying income tax in the coming years," she added.Ms Saint said laws passed by the Federal Government were helping the ATO take"strong action".
And previous stronger transfer pricing laws passed under the former Labor government have given the ATO an arsenal to fight companies it believes may be overstepping the line. This share of tax payable decreased slightly from 57 per cent in the previous year, the ATO report said.The proportion of entities with nil tax payable has fallen over the past three years, from 36 per cent in 2015-16 to 34 per cent in 2016-17 and 32 per cent in 2017-18."And we have observed that companies can and do make losses as part of usual business practices.
The ATO also provides a theoretical estimate of how much tax is owed by large corporates with a turnover of more than $250 million.The net tax gap was estimated at $2 billion, or 4 per cent.While more than 170 large corporate groups have signed up to the Board of Taxation's Voluntary Tax Transparency Code, many companies still do not give detailed information about their tax affairs.
The ATO notes several limitations in its data. First, the 2,214 corporate tax entities are not necessarily standalone entities and are sometimes part of a group of entities. The ATO report said confidentiality provisions prevented the agency disclosing certain information about them.
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