Australian Car Companies – Who Paid Tax FY 2013-2014, And Who Didn’t
Commenting on matters of tax is like throwing stones inside a glass house. It is a practice best avoided (lest the tax bell also “toll for thee”). Except corporate tax, then we can all take a pot shot. Because the targets are so large, t
Commenting on matters of tax is like throwing stones inside a glass house. It is a practice best avoided (lest the tax bell also “toll for thee”).
Except corporate tax, then we can all take a pot shot.
Because the targets are so large, the scale of the dollars involved so immense and the issue so affrontingly ‘on the nose’ to ordinary taxpayers, and, often, so adrift of community expectations as to what constitutes reasonable corporate behaviour.
And it is now made easier to line up the yonnies because the Australian Tax Office has taken to publishing annually – for all to see and to comment upon – a list of companies with a total income of $100 million or more (from their Australian operations), their taxable incomes, and the tax they actually paid.
All on the list.
On that list, made public for our gleeful entertainment by Tax Commissioner Chris Jordan yesterday, are 1539 public and foreign private companies, 579 of which paid no tax on income earned – that’s zero, nil, nix – for the 2013 to 2014 fiscal year.
Those companies, the 579 who paid no tax, accounted for a turnover of close to AUD$406 billion in the 2013-14 fiscal year, and produced collectively a taxable income just one percent of that, just $4.0 billion, on which no tax was paid.
And there are car companies, brands that you and I know very well on that ‘nil tax payable’ list.
We are not alleging any wrong-doing, sharp practice or tax minimisation strategies in presenting the information or listing the companies identified. The data provided comes directly from the ATO to the Australian community as per tax disclosure laws for corporations put in place by the former Rudd/Gillard/Rudd Labor Government.
Car companies that paid no tax:
| Company | Total Income | Taxable income | Tax payable (TP) | TP as % of total income |
| General Motors Australia Ltd | 4,138,128,813 | Nil | Nil | Nil |
| Ford Motor Company Aust Ltd | 2,940,670,099 | 7,057,051 | Nil | Nil |
| Nissan Motor Co Aust Pty Ltd | 2,098,612,707 | Nil | Nil | Nil |
| Mitsubishi Motors Australia Ltd | 2,037,579,159 | Nil | Nil | Nil |
| Honda Australia Pty Ltd | 909,436,120 | 12,036,147 | Nil | Nil |
| Suzuki Australia Pty Ltd | 382,734,403 | Nil | Nil | Nil |
| Iveco Trucks Australia Ltd | 356,296,724 | Nil | Nil | Nil |
| Sime Darby Automobiles Pty Ltd | 136,208,027 | Nil | Nil | Nil |
Those car companies (and importers) that paid tax, and the tax payable
as a percentage of total income:
| Company | Total Income | Taxable income | Tax payable (TP) | TP as % of total income |
| Volkswagen Group Aust Pty Ltd | 1,955,002,738 | 34,973,283 | 10,491,985 | 0.5 |
| Mazda Australia Pty Ltd | 2,436,232,363 | 51,960,805 | 15,523,200 | 0.6 |
| Audi Australia Pty Ltd | 1,026,456,938 | 23,372,293 | 7,011,688 | 0.7 |
| Inchcape Australia Limited | 1,237,044,671 | 80,124,636 | 10,299,551 | 0.8 |
| Volvo Car Australia Pty Ltd | 233,701,377 | 7,688,202 | 2,306,461 | 1.0 |
| Porsche Cars Australia Pty Ltd | 314,254,835 | 10,798,975 | 3,239,692 | 1.0 |
| Hyundai Motor Company Aust Pty Ltd | 2,165,383,649 | 78,991,402 | 23,697,421 | 1.1 |
| Jaguar Land Rover Aust Pty Ltd | 682,407,526 | 26,381,712 | 7,627,428 | 1.1 |
| Scania Australia Pty Ltd | 335,774,399 | 13,671,583 | 4,101,475 | 1.2 |
| Kia Motors Australia Pty Ltd | 711,284,645 | 30,887,372 | 9,266,212 | 1.3 |
| Toyota Motor Corporation Australia Ltd | 10,261,290,446 | 544,077,410 | 155,668,183 | 1.5 |
| Subaru (Aust) Pty Ltd | 1,385,241,206 | 71,020,057 | 21,306,017 | 1.5 |
| Daimler Australia/Pacific Pty Ltd | 3,023,205,000 | 180,648,291 | 54,194,487 | 1.8 |
| BMW Australia Ltd | 2,020,881,108 | 186,107,910 | 55,832,373 | 2.8 |
| Yamaha Motor Australia Pty Ltd | 332,436,489 | 33,243,993 | 9,946,624 | 3.0 |
| Isuzu Ute Australia Pty Ltd | 371,429,812 | 45,021,478 | 13,506,443 | 3.6 |
Of course, companies large and small can offset profits by carrying losses forward, by asset write-downs and accounting for the costs and investment made in producing income.
Well known is that both Ford and Holden have, in recent years, reported FY losses due in small or large part to significant asset write-downs as a result of the impending closure of their local manufacturing operations.
Also, many car companies, as with many industries in many industry sectors, are still in recovery from the GFC and still carrying forward significant losses from those dark years.
But, as the interim report (November 2015) of the Senate Inquiry into Corporate Tax Avoidance has exposed, many of the companies on the Senate Inquiry's 'shit list' do employ aggressive tax minimisation strategies, do conduct their tax affairs from the protection of tax havens or low tax jurisdictions, and do employ sharp practices to pay minimal tax (or to avoid their tax obligations altogether) through internal offsets, excessive debt loading, profit shifting and dodgy structural arrangements.
International companies can also wipe out profits via ‘revenue shifting’ that can occur between the subsidiary and the parent. In other words, profits can be repatriated to an international parent via internal structural arrangements - invoicing, payments etc. - between the parent and the subsidiary.
As the ATO list shows however, car companies are, in the main, small beans compared to ‘big oil’.
Does this all pass your ‘sniff test’?
Tim O'Brien is Managing Editor of The Motor Report
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