ATO reveals the IT giants that paid zero tax last year

Some of the world’s largest IT companies avoided paying any Australian tax last year, while a number of others paid their largest tax bill in years, according to new tax data.

The Australian Taxation Office on Thursday published its sixth annual corporate tax transparency report, which discloses the 2018-19 tax bills of the largest companies operating in the country.

It covers 2311 Australian public and foreign-owned companies with incomes of $100 million or more and Australian-owned resident private companies with an income of more than $200 million.

The report shows that 741 of these companies paid no tax in Australia in 2018, including four IT companies that generated a taxable income – marking an improvement of previous years.

The companies include IBM, which had a taxable income of $60 million on revenue of $3.26 billion, as well as Netcom Wireless, Toshiba and Unisys.

IBM also paid no tax in 2017-18, 2016-17 and 2015-16, despite generating multi-billion dollar revenues.

Atlassian, which – like IBM – paid no tax in the last three years, paid a tax bill of $11 million on a taxable income of $56.8 million in 2018-19 - an effective tax rate of 19 percent.

A number of other IT companies avoided paying tax because they did not generate any taxable income during 2018-19, which can be explained by operating losses or utilising losses from prior years.

Loss-making companies include DXC ($1.92 billion revenue), NTT Australia ($1.32 billion revenue), SAP ($1.16 billion revenue), Datacom ($544.8 million revenue) and NEC ($405 million revenue).

Vodafone ($3.65 billion revenue) and NBN Co ($2.86 billion revenue) also made a loss, as did distributors Ingram Micro ($2.46 billion revenue) and Hills ($249.2 million revenue).

Other loss-making software companies, data centre providers and device manufacturers include Ricoh ($340.4 million revenue), Citrix ($283 million revenue), NextDC ($180 million revenue).

A number of others also came in well under the full 30 percent corporate tax rate, including Google (26 percent), Infosys (18 percent), Tata (24 percent), TechOne (12 percent) and Trend Micro (1 percent).

ATO deputy commissioner Rebecca Saint said the report shows the “proportion of companies that have paid no income tax remains steady at 32 percent”, down four percent since 2013-14.

“The ATO takes steps to verify that losses in the large market are not created through contrived schemes, but actual losses that can be traced back to commercial operations,” she said.

“Companies that report sustained losses year-on-year face scrutiny from the Tax Avoidance Taskforce."

Telstra paid the largest tax bill of the tech companies, funnelling $863.9 million into the government’s coffers based on a taxable income of $2.97 billion and revenue of $26.62 billion.

Singel, which reported revenue of $9.24 billion, paid $187.6 million on a taxable income of $652.5 million, while Apple paid $149.3 million based on a taxable income of $497.9 million ($9.56 billion revenue).  

Other companies meeting the corporate tax rate of 30 percent – or just under – were:

• Accenture, which paid $39.5 million on a taxable income of $138.3 million and $2.22 billion in revenue
• Acer, which paid $1.3 million on a taxable income of $4.4 million and $309.8 million in revenue
• Adobe, which paid $6.5 million on a taxable income of $21.5 million and $481.64 million in revenue
• Amazon Web Services, which paid $10.1 million on a taxable income of $33.6 million and $318.6 million in revenue
• Capgemini, which paid $0.85 million on a taxable income of $2.8 million and $341 million in revenue
• Cisco, which paid $15.2 million on a taxable income of $50.6 million and $1.99 billion in revenue
• Data#3, which paid $8.9 million on a taxable income of $29.8 million and $1.41 billion in revenue
• Dell, which paid $18.1 million on a taxable income of $61.1 million and $396.6 million in revenue
• Dicker Data, which paid $14.5 million on a taxable income of $48.4 million and $1.41 billion in revenue
• Epson, which paid $2.6 million on a taxable income of $8.7 million and $205.4 million in revenue
• Equinix, which paid $6.1 million on a taxable income of $20.2 million and $246.8 million in revenue
• Facebook, which paid $15.4 million on a taxable income of $51.4 million and $582 million in revenue
• Global Switch, which paid $2 million on a taxable income of $6.7 million and $291.5 million in revenue
• HCL, which paid $1.2 million on a taxable income of $4 million and $13.7 million in revenue
• HP, which paid $7.4 million on a taxable income of $24.6 million and $786.9 million in revenue
• Huawei, which paid $21.9 million on a taxable income of $74.8 million and $737.2 million in revenue
• Leidos, which paid $3.2 million on a taxable income of $10.6 million and $399.1 million in revenue
• Lenovo, which paid $1.3 million on a taxable income of $4.4 million and $171.6 million in revenue
• Micro Focus, which paid $2.4 million on a taxable income of $7.9 million and $132.9 million in revenue
• Microsoft Datacentre, which paid $13.5 million on a taxable income of $45.2 million and $647.3 million in revenue
• Microsoft, which paid $70.7 million on a taxable income of $235.6 million and $2.99 billion in revenue
• NetApp, which paid $4.2 million on a taxable income of $13.9 million and $206.4 million in revenue
• Rhipe, which paid $3.7 million on a taxable income of $13 million and $164.1 million in revenue
• Samsung, which paid $25.6 million on a taxable income of $85.4 million and revenue of $2.64 billion
• Tech Mahindra, which paid $4.5 million on a taxable income of $14.9 million and revenue of $189.7 million
• Teradata, which paid $1.7 million on a taxable income of $5.8 million and revenue of $177.9 million
• TPG, which paid $127 million on a taxable income of $425 million and revenue of $2.44 billion
• Verizon, which paid $2.7 million on a taxable income of $9.7 million and revenue of $178.3 million
• Vocus, which paid $20.2 million on a taxable income of $69 million and revenue of $1.54 billion
• Wipro, which paid $9 million on a taxable income of $30.1 million and revenue of $331.9 million

Update 14/12: Unisys told iTnews that "Unisys does pay a 30 percent tax rate on its taxable income in Australia".

"The tax paid for 2018-19 (year ending 30 June 2019) takes into account a credit for Unisys undertaking R&D investments in Australia," a spokesperson said.

"These credits are not detailed on the ATO's corporate tax transparency report."