TOP 10 AUSTRALIAN COMPANIES WHICH DIDN'T PAY TAX 2013/2014

If a company makes a profit, it may choose to pay a dividend with a credit. Even with losses they may still pay a dividend from retained earnings. Although there are some other considerations. Assets must be more than liabilities, creditors need to be considered and also the dividend must be deemed as fair to shareholders. Then there are issues of if the dividend is franked and if so is it fully franked or partially. It gets complicated at this stage.

 

A loophole is defined as ''an ambiguity or inadequacy in the law or a set of rules.''

So again; who says they are loopholes? You posted an opinion piece, not a factsheet.

And the only point that matters in reality; from your link ''Is it legal. yes''

 

@York that's what I thunked. I wanted to know whether the dividend would come from capital (& erode shareholder value thru borrowing ) and would be unfranked or if franked dividends could exceed the amount of tax paid?

 

some of the inclusions in the list are pretty silly and many of the hysterical commentators online seem to struggle to understand the difference between profit and revenue.

that being said though transfer pricing is an abhorrent practice and should be stamped out. all companies should be on a level playing field and operating in australia comes with a moral obligation to contribute to the tax take if the company is making money imo. for some businesses, particularly predominantly online based ones with little to no australian employees it can mean making significant dollars, not paying a cent in taxes and not employing anyone either. this is not a good thing for the australian economy.

netflix is a good example, it does not have a single australian employee i believe so if it pays no taxes we are seeing zero benefit for the country from a financial POV.

uber is most probably running at a loss at the moment in this country (could be wrong) but at the very least we are seeing 80% get paid to the driver who then pays tax, GST collected and local operating costs etc which are flow some money back. it doesnt make the transfer pricing any more acceptable though.

in terms of an overall view i do agree more needs to be done to entice businesses here, eg look at some of the incentives singapore offers, but to plainly claim that businesses would leave australia if transfer pricing was to be stopped is wrong too.

netflix isnt going to stop, neither are apple, uber and whole lot of others. if it is being claimed they are avoiding paying tax on profits then it means theyre making profits and why would a company pull out of a country it is profitable in based on having to pay some tax?

it also levels the playing field, if say optus with their streaming service is trying to compete with netflix they should both be paying the same taxes.

"Apple Sales International has reported more than $US100 billion ($112 billion) of profits in the last five years. Its accounts show it has paid less than 50¢ in tax on every $1000 of income." - ie 0.05% tax. governments across the world are missing out on rightfully owed tax dollars and it isnt right.

even with the best accountants and structures the vast majority of businesses in australia, including some of a pretty decent size and profit, pay a fair bit of tax (arguably too much). the fact that a select few get away with paying pretty much none is ********.

Read more: How Ireland got Apple’s $9bn profit
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Generally only franked if paid from profits. Even if there is a profit this year but there are carried forward losses from previous years provided certain criteria are met. Can also pay franked dividend if company makes an unrealized capital profit provided net assets exceed liabilities by the amount to be issued.

Generally will be unfranked if paid from capital account although needs to pass solvency tests. A few other parts to it as well but starts to get confusing.

 

You have to have paid the tax to pay a franked dividend, franking credits are the return of corporate tax already paid on that income. It doesn't mean tax in the year the dividend is paid (this is in fact complicated).

Our current approach in Australia is just moronic. We have a broken system but instead of addressing that and trying to fix where the problems are we want to point the finger at corporations for employing smart business practices. It's deflection from the real problem, getting a big stick out and trying to beat tax out of the companies or chasing them away is just a stupid approach.

Look at Ireland, the company that a lot of those companies are based... They tax at between 10 and 12.5% for those companies, their employees are taxed at 20% or 40% at the highest rate only. Instead they have a VAT(GST) of 23%. Those companies and their employees are incentivised to be based in Ireland, to do as much of their business there as possible, not to stay actively out of the country.

Australia's approach to it's tax system reminds me of Blockbuster, the RIAA and MPAA when the internet came along. Instead of embracing it and using it to extend their business they looked at it like some big evil voodoo monster and tried to stop it happening. The net outcome was that it was Apple who made the profit that could have easily belonged to the studios with iTunes and it was Netflix that made the money while Blockbuster went bust. Right now we don't want to fix our archaic approach and system and instead we want to blame everyone else for moving with the times and making smart business decisions.

 

*insert meme/infographic showing how all the big corporations send all their money offshore to tax havens. Suddenly become expert.*

 

Wogitalia, I don't think people are 'blaming everyone else for moving with the times'. I think people are, for the first time, getting a glimpse of how little tax these huge corporations pay and they're asking questions. This issue has been around for years. No government-Labor or Liberal-will tackle the issue because they don't want to get the rich offside.

"... it is estimated that if all ASX200 companies paid the full rate of company tax, the Federal Budget could have an additional $8.4 billion each year.

Australia's oil and gas industry have amassed more than $156 billion in Petroleum Resource Rent Tax (PRRT) credits. Due to PRRT loopholes, this massive increase in profit will not result in any additional tax revenue being collected by the Government."

Mr Turnbull: Why does the average Australian pay more tax than billion dollar companies?

 

Seriously a union website? why not the socialist alliance?.

There is no issue, it's the usual envy politics, a distraction for the ignorant masses. Company tax and resource rents make up only 22% of revenue collected. It is the most damaging tax to economic growth. It should be zero.

 

@THX - declare war on the world, invoke sovereign rights over all land owned by foreign nationals, scrap the entire tax system and start from scratch?

 

Company tax should be zero?? Thats an absurd suggestion and in saying that as someone who would directly benefit from this quite significantly

 

It goes a little something like this..

ActionAid exposes tax dodging by UK brewing giant SABMiller, owners of Grolsch

This looks like an interesting read also

The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business

 

This is another good one
Prices for Treasure Islands: Tax Havens and the Men who Stole the World by Nicholas Shaxson