The ninth annual Corporate Tax Transparency (CTT) report, released by the Australian Taxation Office (ATO), unveils a remarkable development in income tax payments by large corporations for the 2021-22 fiscal year.
The Petroleum Resource Rent Tax (PRRT) payable doubled to almost $2 billion, largely influenced by the prevailing oil prices. This marks the highest reported PRRT since the initiation of CTT reporting.
The report highlights a shift in the tax position of certain major oil and gas companies. This transition follows the culmination of liquefied natural gas (LNG) projects and the gradual recoupment of startup expenditures spanning several years.
ATO Deputy Commissioner Rebecca Saint, said:
“The Tax Avoidance Taskforce has been instrumental in moving a number of large oil and gas companies into a tax payable position.”
“Oil and gas companies contributed $4.4 billion of the record $6.4 billion tax revenue secured from public and multinational businesses for the 2022-23 financial year”
“Our intervention ensured that these companies paid more tax and sooner“
ATO Deputy Commissioner Rebecca Saint said
Tax payments from this sector demonstrated substantial growth, surpassing $11 billion in the 2022-23 income tax year, propelling some of these companies into the ranks of Australia’s largest taxpayers. The substantial increase in tax payments is set to be detailed in the forthcoming 2024 report.
During the 2022-2023 fiscal year, the Australian Taxation Office (ATO) achieved an unprecedented milestone by securing an impressive $6.4 billion in tax revenue solely from public and multinational businesses.
In this period, 2,713 entities, an increase of 245 from the previous year, collectively contributed a record-breaking $83.8 billion in income tax. This represents a substantial 22.2% surge compared to the preceding year and nearly a 50% rise from two years ago.
“The 2022 income year was the first year that the mining sector paid more tax than all other sectors combined, something we haven’t seen in the history of the CTT report.”
“In fact, the mining sector paid more tax in 2021-22 than the total tax from all sectors in the each of the first three years of CTT reporting”
ATO Deputy Commissioner Rebecca Saint said.
All sectors of the economy exhibited heightened tax contributions compared to the previous year. The most substantial increase in tax revenue originated from the mining sector, predominantly attributed to robust commodity prices.
The Australian Taxation Office (ATO) presently employs approximately 1,600 personnel dedicated to overseeing the tax compliance of large corporate entities. These employees are distributed across various initiatives, including assurance programs, which involve a proactive examination of the financial operations of these significant businesses to ensure accurate tax payments, as well as our audit program.
Revisions to tax legislation set to take effect starting from the 2022-23 income year will modify the criteria for inclusion in the corporate tax transparency report. The adjustment reduces the income threshold from $200 million to $100 million for Australian-owned resident private companies.
As a result, the data presented in the 2024 report and subsequent editions will experience a notable expansion, encompassing a larger number of private entities.
It’s crucial to emphasize that the information in the report is sourced directly from tax returns and does not incorporate any subsequent intervention or compliance efforts following the submission of these returns.
Since the inception of the Tax Avoidance Taskforce in 2016, it has played a pivotal role in generating over $27.7 billion in extra tax revenue from multinational corporations and sizable public and private enterprises, up to August 31, 2023.
Sources:
- Corporate tax transparency report 2021-22 income year
- 2021-22 Report of entity tax information
- Findings report RTP – Public and multinational businesses
- Findings report – Top 100 income tax and GST assurance programs
- Public Groups and International Advice and Guidance program
- Findings report – Top 1,000 income tax and GST assurance programs
- Australian tax gaps (For additional information on Large business tax gap)
- ATO secures additional $6.4 billion from large corporates
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