ATO reveals the biggest private companies that paid no company tax in 2014

The Australian Taxation Office has for the first time released the names of large private companies that paid no corporate tax during a financial year, as part of a strategy to increase transparency and trust in the tax system.

The report, which examines Australian private companies with total income of $200 million or more, shows 30% did not pay any corporate tax in 2014.

Of those private companies, 12% were exempt from handing over cash to the ATO because they incurred an accounting loss for the current year.

Others did not pay tax because they utilised prior year losses or franking credits, while some companies on the list have related entities that did pay tax.

Some of the companies are also entitled to offsets, such as those associated with the Research and Development Tax Incentive.

Here are some of the private companies that paid no company tax for the 2013-14 financial year:

  • Pratt Consolidated Holdings, which reported a total income of $2.58 billion and a taxable income of $87.84 million
  • Australia’s largest winemaker, Accolade Wines, which had a total income of $400 million
  • Cinema company Hoyts, which posted revenue of $417 million according to the ATO data
  • Food giant Bartter, owned by the Baiada family, also paid no tax. It had a taxable income of $1.47 billion in 2013-14.
  • McDonald’s Asia Pacific Consortium, which had $478 million in revenue during the same period.

Hancock Prospecting paid the most tax of any private company

Gina Rinehart’s Hancock Prospecting, meanwhile, paid $466 million in company tax – far more than any other private company during the 2013-14 period.

Harry Triguboff’s company, Meriton Properties, meanwhile, recorded a total income of $1.19 billion for the same period and paid $75.92 million in company tax.

Tax commissioner Chris Jordan said in a statement paying no tax does not necessarily mean a company is avoiding its tax obligations.

“At the ATO, we risk assess 100% of the privately owned and wealthy group population to ensure companies comply with their tax obligations,” Jordan said.

“A key characteristic of private groups is that they are part of complex group structures. The ATO takes a whole-of-group view when assessing tax owed.

“While most do the right thing, we closely investigate any companies with unusual financial or taxation numbers.”

More transparency a good thing for small business

Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany he welcomes the push for transparency when it comes to which companies are paying tax in Australia.

“The tax system is so important,” Strong says.

“It’s got to be transparent. It’s got to be out there and people have to know what’s going on. If you’re a small business and you’re doing the wrong thing, they hunt you down. And when a small business does the wrong thing, it’s not going to dodge millions of dollars.”

Strong says he hopes the ATO data will continue to provoke a conversation about big business and tax.

“It takes time [to crack down on big business],” Strong says.

“With small business it’s normally pretty quick, you either put your hands up or they find you innocent. Whereas big business they have lots of solicitors and that sort of thing. So I understand it takes time – just as long as they [the ATO] don’t give up.”

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Bill
Bill
4 years ago

Whilst I think the headline is grabbing attention. Could you also please supplement the “no tax” information with how much the companies in question paid in relation to payroll tax, PAYG tax, GST Collections to the ATO, Council Rates etc.
Our small business turns over about 3 million per year, we paid $20,000 Company tax but we also contributed to about $280,000 of other “taxes to the Australian Economy.

Eloise Keating
Eloise Keating
4 years ago
Reply to  Bill

Hi Bill. Thanks for your comment. The “no tax” refers to company income tax and the article has been updated to reflect this. Thanks, Eloise

Hamish Blair
Hamish Blair
4 years ago

So lets say a company makes an EBIT margin of 10%. $1bn of revenue resulting in EBIT of $100m.
Perhaps it can gear at 3x EBIT, meaning debt of $300m. At an interest rate of 5% this would mean finance costs of $15m.
PBT is therefore $85m ($100m – $15m).
Tax at 30% is $25.5m.

Headline “Private Company with Income in excess of a Billion only pays a paltry $25m in tax”.
Yes folks, thats how it works. You pay tax on profits, not revenue.

Justin Tyme
Justin Tyme
4 years ago

Hamish is correct, and those who have never taken a risk and tried to employ or work for themselves just don’t get it.

WallyS
WallyS
4 years ago

Rather a case of sensationalism. there is a big difference between revenue and profit – Wish it was explained that it is only profit tax, ridiculous in itself… most if not all of these companies pay their GST, PAYG and payroll tax another ridiculous item… tax a company for employing people! Likely due to how everything works in Australia, Unions, high costs for everything and wages etc. many companies don’t make much profit and now they’ll be named and shamed for it – a bit unfair I think.

Mal
Mal
4 years ago

What right does the ATO have to release financial data for ‘private’ companies?

WallyS
WallyS
4 years ago
Reply to  Mal

too damn true! … no such thing as privacy any more.

Vince
Vince
4 years ago

Are you kidding me. this is sensationalism at it worst. Thought there was more journalistic credibility here.