A major streaming service, media outlets, major airlines and a pizza chain are among more than 1,200 large companies that paid no income tax in 2022-23, a new ATO report reveals, as many companies deducted losses and used offsets to pay their tax bills. up to zero.
Netflix's Australian operations generated more than $1.15 billion in revenue in fiscal 2023, documents show, but had no taxes to pay.
Airlines Qantas Airways and Virgin Australia also paid no taxes in 2022-23 after they were able to carry forward losses accumulated at the start of the pandemic. Tech company Canva also had a zero tax bill.
A Canva spokesperson said the company fully complies with tax laws and regulations and pays millions each year in payroll taxes, fringe benefit taxes and other contributions.
“Our focus on R&D not only drives innovation and job creation here in Australia, but also qualifies us for the government's R&D tax incentive, which helps reduce our income tax payable so that we can reinvest even more in innovation,” said the spokesperson.
The report makes clear that there are legitimate reasons why some companies might not pay income tax.
When a corporate entity has deductions that exceed its income, it may incur a tax loss that it can use in future years. This can occur when a company is under pressure or expanding rapidly, which often occurs when resource companies are building projects.
Some large companies also have multiple entities that use pass-through agreements to collect payments from other divisions, which can reduce the amount of taxes they pay in the jurisdiction where the money is earned.
Under-pressure mining and services company Mineral Sources generated $5.64 billion in revenue in 2022-23 but had no tax bill.
A company spokesperson said MinRes indirectly paid $240.8 million in income taxes through its 50% stake in the entity that owns the Mt Marion lithium mine. The entity paid a franking credit which MinRes used to reduce its cash tax, the spokesperson said.
Online retailer Kogan paid no income taxes in 2022-23. Its financial record shows that it made a loss that year.
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Information Australia Holdings, which is linked to Information Corp, generated $1.88 billion in revenue in 2022-23, but had no taxes payable.
Domino's Pizza Enterprises did not have a tax bill in fiscal 2023 despite posting $704 million in revenue.
All companies in this story have been contacted for comment.
The ATO report found that 31% of large businesses reported not paying tax, representing 1,253 entities, slightly lower than in previous years. Total income tax collections increased due to higher profits by mining, oil and gas companies.
“While there are legitimate reasons why a company may not pay income tax, the Australian community can be assured that we pay close attention to those who do not pay income tax to ensure they are not trying to game the system,” said ATO Deputy Commissioner Rebecca. Saint said.