Australia Revealed List of 600 Major Corp Paid Little to No Income Tax

The Australian Taxation Office (ATO) is taking the lead on transparency by publishing a report on major companies that reported a total income greater than $100 million in 2013-14. In the report, almost 600 companies did not pay income tax in that financial year.

Over 1,500 companies fit the criteria in ATO's list, with 960 paying while 579 did not. Despite the negative response to this information, ZDNet reported that those companies didn't necessarily neglect paying taxes. Companies can reduce the taxable income by carrying forward losses.

The list also only reveals which companies paid little or no tax, but does not tell how, if they did, reduce the amount of tax owed. It did show how much disparity there was between the total income of a company compared to the amount of income that was subject to taxation in Australia.

Some of the largest corporations in the world made the list, with many technology companies included. Apple only had to pay taxes on $247 million out of their total $6.1 billion income, about $74 million, 1% of the total income. Microsoft had to pay about 5% of its total income - $31 million out of a total $568 million.

There were some offshore companies that paid no tax on their Australian income at all. These companies include Haliburton Co, Hilton Worldwide Holdings Inc, Boeing Co, Honda Motor Co, and Ford Motor Co. As Reuters reported, the ATO's figures will cause the companies embarrassment since they rely on their reputation of honesty to sell products to their customers.

However, there were other companies that had to pay some of the highest tax bills in the country. Mining company BHP Billiton's total income was more than $40 billion, but the taxable income was $14 billion, with the total tax paid at $4 billion, about 10% of their total income. Another mining company, Rio Tinto also had to pay almost 10% of their total income with $3 billion paid out of the total $34 billion made.

Australia's biggest banks were the next highest tax payers. Commonwealth Bank had to pay about 7% of its income of $43 billion. Westpac and ANZ paid about 6% of their $39 billion and $30 billion, respectively. NAB had to pay almost 5% of their $43 billion.

Chris Jordan, Commissioner of Taxation, told ABC that releasing the data would encourage and build trust in the ATO's taxation system.  "Community trust and confidence in the way these large companies operate matters. And tax should matter to these companies. It is not something to be taken lightly." 

ATO has had the power to release the information but only done so now as a way to close tax loopholes. It's part of an effort to start a major change in the company taxation system. Now the next step is to understand where the cracks are, whether that be with the taxation system or with the companies themselves.