Almost a third of Australia’s biggest companies paid no tax last year, despite soaring commodity prices driving the overall take up by $6.6 billion.
The Australian Taxation Office’s tax transparency report looked at more than 2200 Australian and foreign-owned companies with turnover above $100 million.
More than 1500 of the companies paid a combined total of $52.3 billion in tax, while 710 firms didn’t have a tax liability in 2017/18.
Paying minimal or zero tax can be a result of companies making a loss, utilising losses from other years or having projects in start-up phase.
ATO deputy commissioner Rebecca Saint said companies consistently reporting sustained losses raised a red flag.
“The community should be reassured that we closely scrutinise the tax affairs of the largest companies,” she said.
She said there was a positive trend around companies stopping generating accounting losses and moving to offset profits through losses in previous years.
“We expect many companies to exhaust these losses and begin paying income tax in the coming years,” she added.
Strong increases in commodity prices drove the tax bill up by $6.6 billion, with the petroleum resources rent tax reaping more than $1 billion.
Ms Saint said laws passed by the federal government were helping the ATO take “strong action”.
She said more than $7 billion of sales income was being booked in Australia as a result of companies, including Facebook and Google, restructuring in response to the federal government’s tougher anti-avoidance laws, including the multinational anti-avoidance law.
The diverted profits tax is also helping the agency get the information it needs if companies are deliberately obfuscating.
And previous stronger transfer pricing laws passed under the former Labor government have given the ATO an arsenal to fight companies it believes may be overstepping the line.