Australian Car Companies – Who Paid Tax FY 2013-2014, And Who Didn’t Photo:

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Tim O'Brien | Dec, 18 2015 | 23 Comments

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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