The New Daily and Michael West count down the 10 biggest corporate tax dodgers in Australia. Return on Wednesday when we reveal the nation’s seventh-biggest tax avoider.
Amcor switched head office from Australia to Switzerland three years ago, a move that symbolises the group’s approach to paying tax.
The packaging giant recorded $11.7 billion in total income over the four years of available tax office transparency data but managed to eliminate most of that in costs, which left just $35 million in taxable income on which no tax was paid – a tax rate of zero.
It seems everybody shares in the riches of Amcor except the Australian Tax Office. Shareholders bank roughly half a billion a year in dividends, chief executive Ron Delia takes home $12.2 million pay, the conflicted auditor PwC picks up a cool $8 million a year for audit and tax advice, even foreign tax authorities do quite nicely. But the poor old ATO … zip.
Amcor has shot from No.23 last year to No.8 on the top 40. Like Amazon, Amcor is ever on the acquisition trail and if a company makes endless acquisitions it has ample scope to reduce its tax exposure by constant restructuring charges and acquisition costs.
It has integrated 26 acquisitions in the past six years and has 250 plants in 40 countries – hence the lack of visibility on tax.
When you look at the ATO numbers there is no tax payable, but a look at Amcor’s financial statements shows it pays quite a bit of income tax – the problem is the ATO is not getting it.
There is no breakdown in the accounts of where the tax goes. In 2015 and 2016, its tax disclosures show Amcor paid $188 million and $135 million respectively. In the two years since the ATO data (which lags two years), Amcor has recorded $150 million and $160 million in tax paid.
There is no explanation given, and Amcor does not appear to have been bothered to produce a Tax Transparency Report. We did ask, but got no response.
Presumably then, the $150 million a year in tax paid by Amcor is paid to foreign revenue authorities.
Amcor’s gross revenue surpasses $9 billion a year but its Australian revenue is just $450 million; this is truly a leading Australian multinational. Most multinationals, however, tend to pay more tax in their home countries than elsewhere. Not Amcor. Lendlease is another case in point.
The company notes in its accounts that “the effective tax rate for the year was 17.5 per cent”. It also discloses that it is being pursued in the courts by tax authorities in Brazil.
Chairman Graeme Liebelt kicks off the latest annual report with these words: “After several strong years, fiscal 2018 was a trying one for our industry.”
The ATO might well say “after several extremely weak years it appears that fiscal 2018 will be another trying year” because Amcor still has another $820 million in unused tax losses and appears to deem the paying of income tax in Australia as a matter of discretion, rather than necessity.
This is part three in a 10-part series on the nation’s biggest tax dodgers. Click here to see part two.
For the full details of Michael West’s investigation into Australia’s 40 biggest tax dodgers you can visit his website, here.