Statement on ATO Company Tax Data

18 December 2015

“The ATO’s publication of company tax data is an important input to the transparency and integrity of the Australian tax system,” Business Council of Australia (BCA) Chief Executive Jennifer Westacott said.

“The data provides context on key issues being debated in Australia right now, in particular, a tax reform agenda that stimulates economic growth and job creation, and how the Australian tax system should be updated to better reflect our place in today’s global economy.

“However, the data should be interpreted carefully. Companies do not pay company income tax on revenue (total income) - they pay it on profits after paying all expenses including wages, capital replacement, supplier costs, fleet costs and other operating expenses. Profit margins will also vary by industry reflecting different capital intensities. 

“Many small and medium sized businesses, in particular, do not make a profit in a given year, and even large businesses go through cycles where profits from large investments take time to be realised.

“The data also highlights the significant contributions made by business. The companies listed accounted for $40 billion of the $67 billion in company tax paid in 2013-14. Within the OECD only Norway taxes companies more as a share of the economy than Australia.

“As has been previously noted by Andrew Mills, Second Commissioner – Law Design and Practice Group: ‘With changes over recent years, we have transfer pricing and anti-avoidance laws that are – if not the strongest – among the strongest in the world and we are not afraid to use them.’

“These tax laws were further strengthened with the passage of the government’s multinational tax bill through the Parliament earlier this month.

“The Business Council strongly believes that companies must meet their tax obligations and that governments need to respond to community norms, but tax integrity measures must be considered carefully to ensure they do not undermine our competitiveness and cause businesses to locate in other countries at the expense of Australian jobs.

“We need to work through any issues as part of a global process rather than going it alone and potentially losing investment and tax revenue to other countries.

“It is important that this release informs rather than distracts from the core objectives of tax reform: economic growth and job creation through a simpler, fairer, more durable tax system that reflects the Australian economy of today,” Ms Westacott said.

The ATO has released publications to assist in better understanding and interpreting the data made available today:

Reporting of entity tax information

Corporate tax transparency report for the 2013-14 income year

Further tax transparency - further contextual background



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