More than 1,200 large companies paid no tax, ATO reveals, as it vows to fight profit shifting
Big business tax take hits $100bn, as corporate Australia forced to hand over
The ATO says it is watching Australia’s mining and resources companies after defeating earlier attempts to run sales through offshore entities.
DAVID ROSS
The Australian Taxation Office said it was reaping the spoils of several years of tough fights with overseas-owned corporations, in particular those operating in the resources and mining space.The ATO said it had booked $97.9bn in tax from willing taxpayers in the 2022-23 period, up 16.7 per cent from the year prior, driven by an explosion in Australia’s minerals exports.
But this was bolstered by a further $2bn in tax taken as a result of actions of the Tax Avoidance Taskforce in the period, according to ATO deputy commissioner Rebecca Saint.
Ms Saint, who leads the ATO’s compliance programs for public and multinational groups, said she couldn’t disclose which companies were forced to hand over the extra $2bn in the period, but noted it related to major corporates that faced tax assessments in the period.
ATO data shows large corporations paid 96 per cent of the income tax “they should have” for 2021-22.
Almost 31 per cent of companies did not pay tax in the 2022-2023 period, down from almost 36 per cent in 2013-2014.
Ms Saint said Australia was benefiting from years of hard work in combating resources companies running offshore sales and marketing hubs aimed at circumventing the country’s tax rules. “We estimate we’ve got coverage on around 90 per cent of commodities sold in marketing hub arrangements,” she said.
Mining giant Rio Tinto reached a $1bn settlement with Australia in July 2022 over its Singapore marketing hub operations, after BHP also settled a similar case in 2018.
But Ms Saint said the ATO was continuing to investigate related party sales from Australia’s biggest companies, warning the tax office was also monitoring companies to “make sure there’s no changes”.
The ATO is also riding high on the back of court wins against gas giant Chevron, with Ms Saint noting the decision dealt with related party arrangements and intercompany loans to decrease profits. She said the ATO had taken more than $45bn of interest expenses off the table for corporate Australia on the back of the Chevron decision.
“Clearly oil and gas projects require a lot of capital … you’d expect we’d look at that very closely,” she said.
The ATO revealed it reaped more than $11.6bn from the oil and gas sector in 2022-23.
The latest report from the tax office covers more than 3985 companies. This includes a further 1272 new companies captured in the reporting data after rules changed to include businesses with a turnover of $100m or more. Previously reporting was limited to taxpayers of $200m turnover or more.
But Ms Saint said the ATO expected the coming tax reports to show a lower take, with record resource prices unlikely to be repeated.
“This is the peak of that record period, off the back of strong commodity prices,” she said.
The ATO’s Justified Trust program polices some of Australia’s biggest companies, with the tax office noting it remained concerned about certain behaviours of big business.
Ms Saint said the ATO was investigating dealings and pricing, noting investigators were increasingly seeing “mischaracterisation of business dealings” as an issue in tax matters.
Sam Dastyari hit with ban by ATO over super fund management
The tax office has banned former NSW Labor senator Sam Dastyari from running a super fund after being found to have breached the Superannuation Act.
In a notice posted by the Australian Taxation Office, Mr Dastyari was served notice he would be disqualified as trustee from one or more superannuation entities after they contravened the Superannuation Industry Act.
The ATO notice warned the funds overseen by Mr Dastyari had breached subsection 2 of the Act, which orders a trustee be banned when funds they operate are found to have breached the Act.
In a public notice ATO deputy commissioner Emma Rosenzweig told Mr Dastyari she was “satisfied that the corporate trustee of one or more superannuation entities has contravened the SISA on one or more occasions”.
Ms Rosenzweig told Mr Dastyari “at the time of the contraventions you were a responsible officer of the corporate trustee and the seriousness of the contraventions provides grounds for disqualifying you”.
The ATO warned Mr Dastyari he risked jail time if he continued to act as trustee or investment manager or custodian of a superannuation fund after his banning. If found to be running the fund or acting as a responsible officer after the ban he risks two years in jail.
However, the ATO’s notice allows Mr Dastyari 21 days to appeal, ordering he “give the reasons you think the decision is wrong”.
Corporate records show Mr Dastyari, who served as general secretary of the NSW Labor branch alongside a key role at the party’s national executive from 2010 to 2013, registered Dastyari Super in January 2021. Records show he continues to be registered as its sole director and shareholder.
ASIC records show registrations for the Dastyari Managed Super Fund, which was active from July 2023, along with a registration for the Dastyari Superannuation Fund, which was registered in January 2021.
The Iranian-born politician was a NSW Labor senator from 2016-18 but dramatically quit after his links with Chinese communist businessman Huang Xiangmo were revealed.
Former immigration minister, now Liberal leader, Peter Dutton called Mr Dastyari a “double agent”.
The move by the ATO to ban Mr Dastyari comes almost two months after accounting firm Presido Partners told ASIC it was immediately withdrawing “consent to act as the registered office” for Mr Dastyari’s superannuation fund.
Since leaving politics Mr Dastyari has appeared in the media, but he has also pursued a business career, joining the board of the National Home Doctors Service as well as stepping up as director of private financier Lending Capital Ventures.
Mr Dastyari serves as director of the lending business alongside businessman James Ravens, with $181,052 in paid up capital.
Mr Ravens, who also runs a drinks company and held a senior position on the Tasmanian Bridestowe Levendar Estate, notes on his LinkedIn profile that Lending Capital Ventures is a privately held lending company offering loans to “under-serviced categories in the financial services space”.
This included funding fertility lending provider Ovessa, which offers loans of up to 10 years to fund IVF.
Contacted by The Australian, Mr Dastyari asked “what’s up, mate?” but failed to respond when questioned on the reason for his banning.