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ATO database names big companies – including Microsoft subsidiary and Netflix – that pay little corporate tax but notes there could be legitimate reasons
Microsoft’s datacentres and Optus owner among firms paying zero tax on billion-dollar Australian revenues ATO database names big companies – including Microsoft subsidiary and Netflix – that pay little corporate tax but notes there could be legitimate reasonsMicrosoft’s datacentre business and the Optus parent Singtel are among a string of major corporations generating billions of dollars in revenue in Australia while paying zero income tax.
The ATO’s transparency database for 2024-25 shows more than one-quarter of big companies, often based overseas, regularly pay no or little corporate tax in Australia. This includes the Brazilian-owned JBS Global Meat Holdings, which generated more than $4.8bn in revenue but paid zero tax, in a While the ATO does not typically publish tax information of individuals or companies, it is required by parliament to do so for all entities that generate at least $100m in Australian income.
The report did not provide detail as to why individual companies paid zero tax but noted there could be legitimate reasons for it – including making a loss, or using deductions and offsets to lower the taxable income. Overseas companies often reduce their taxable income by making payments to related entities located in lower-taxing jurisdictions. The practice is known as profit shifting and can attract the scrutiny of regulators.
The ATO’s acting deputy commissioner Michelle Sams said the agency was increasingly focused on making sure digital businesses and supply chains paid their share of tax.
“We look very closely if there’s no tax being paid in significant industries, including things like datacentres, to make sure that the level of tax being paid reflects the economic activity that’s happening in Australia,” Sams said. Microsoft’s datacentre business generated $2.3bn in revenue from Australia during the financial year but reported no taxable income. The company’s computer and software business paid $160.6m in tax after generating more than $9.2bn in revenue in Australia.
Netflix’s local operation, which regularly pays little tax in Australia, paid the ATO $8.4m after generating more than $1.4bn in local revenue. TikTok Australia paid $17.3m in tax after recording $686.6m in revenue. An ATO ruling designed to clamp down on profit shifting is expected to raise significant sums from technology companies. But it is expected to face legal challenges.
Parliament also passed revamped media bargaining laws in August, clearing the way for levies on global tech platforms that fail to strike deals with Australian news outlets over the use of their journalism. Singtel went from a regular taxpayer in Australia before 2020 to a company that now regularly reports zero taxable income.
The New Zealand dairy giant Fonterra was another major earner, with more than $2.4bn in total income, that didn’t pay tax – as was Sony Australia and the online retailer Kogan . Experts weigh in on how to tackle illicit tobacco – and why an 80% excise cut is not on their listAustralia’s newest chicken factory looks like a modern art gallery – but will it improve animal welfare?
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