Tax Avoidance by Australian Companies
no wonder these companies are making such large profits. no wonder our government is having trouble funding necessary services. This article appeared recently in the in the sydney morning herald's 'business day':
“All but one of Australia's top 20 companies listed on the stock exchange have subsidiaries in low-tax or tax-free jurisdictions, including Hong Kong and Singapore.
At least half have subsidiaries in tax havens such as Bermuda, Switzerland, Jersey and the British Virgin Islands. This includes Commonwealth Bank's Cayman Islands subsidiary. Telstra, which says it paid $1.8 billion in federal, state and local taxes last year, controls 20 subsidiaries across five remote island nations, including Jersey and Mauritius.
Westpac has confirmed it held subsidiaries in Luxembourg and Jersey, in the Channel Islands.”
a company's headline tax rate is usually about 35 per cent, the effective tax rate is about 12 per cent or much lower. ''You have a lot of companies that are paying 3 per cent of tax or no tax at all, depending on how they structure these things.”
Whilst a lot of the article is correct, a lot of it is not &/or gives half the story. The headline tax rate has been 30% for some years, not 35%. The SMH article states that a lot of Companies are actuall paying 12% or even 3%. This is newspaper headlining & patently incorrect. A company pays 30% tax on it's NET profit. The only way that this can alter is by stating that the Company is paying 3% tax on it's revenue & revenue attracts no tax, anywhere in the World. I note that the article, conveniantly, does not mention withholding tax (10%) applicable in Australia. That tax multiplies considerably as it is on physical $s not profit. Telstra is mentioned as only paying $1.8 Billion in tax on a profit of $5.224 Billion. What do you find wrong with that?