ATO reports IBM continued to avoid paying tax during 2019 financial year

Meanwhile, Atlassian decided to surprisingly cough up some of what it owed.

Despite cashing in the big bucks, some of the world's largest IT companies continued to avoid paying any tax in Australia during the 2018-19 financial year, according to the Australian Taxation Office's (ATO) latest corporate tax transparency report.

The sixth annual transparency report, which covers the tax affairs of the largest companies operating in Australia, revealed those tech companies that escaped from paying anything included IBM Australia and New Zealand, which had a taxable income of AU$60 million on revenue of AU$3.26 billion.

Unisys and Toshiba Australia were also marked as companies that paid no tax last year.

After publication, Unisys said its tax paid was nil due to the R&D investments the company made in Australia. 

NEC Australia and SAP Australia had zero taxable income, despite revenues reaching AU$405 million and AU$1.16 billion, respectively. Both companies recorded losses during FY19, where NEC Australia reduced headcount and SAP suffered a total loss of AU$20.4 million.

The ATO said "the proportion of companies that have paid no income tax remains steady at 32% in 2018-19 in comparison to 2017-18".

At the same time, the report revealed a majority of tech companies did right by the country's tax system, making payments at the corporate tax rate of 30%. These companies included Microsoft, Facebook, Apple, Samsung Electronics, Amazon Web Services, Cisco, Dell, Equinix, and Huawei Australia.

Telstra paid the most tax when it came to total dollar value, handing the ATO a sum of AU$863 million on a taxable income of AU$2.97 billion from revenue of AU$26.6 billion.

Atlassian also decided to pay tax this year, a change from the previous three consecutive years where it had paid zilch. The company's tax bill came in at AU$11 million on taxable income of AU$56.8 million, after cashing in AU$1.54 billion in revenue in 2018-19. Despite paying up, Atlassian only paid an effective tax rate of 19%. The company also remains domiciled in London, not Australia.

See also: How to protect your business from tax fraud (TechRepublic)  

According to ATO deputy commissioner Rebecca Saint, the proportion of tax paying to non-paying companies continued to grow where "over 60% of all corporate income tax in 2018-19 was paid by the companies".

She attributed the growing compliance to the work carried out by the Tax Avoidance Taskforce.

"The Taskforce and the Justified Trust program allow us to change behaviours and engage directly with the largest corporate taxpayers to assure their tax compliance," Saint said. "The majority do the right thing and pay the right amount of tax, but we take firm action against companies that try to avoid their tax obligations.

"The Tax Avoidance Taskforce has proven very successful, contributing to the ATO raising a total of AU$19.8 billion in tax liabilities and collecting AU$11.2 billion from large public groups, multinational corporations, wealthy individuals, and private groups from 1 July 2016 to 30 September 2020."

Despite this, Shadow Assistant Treasurer Stephen Jones and Shadow Assistant Minister for Treasury Andrew Leigh noted that one in three firms still got away with paying no tax.

"The Coalition is allergic not only to scrutiny of their own behaviour, but also to tax transparency for corporate Australia," they said in a joint statement.
 
"They never intended to follow through on their pledge to crack down on corporate tax avoidance…you can take the measure of the Morrison Government by who they look after and who they leave out.

"This year, casuals on the frontline of the pandemic were left behind while billionaires got a bonanza. While robo-debt chased welfare recipients for debts they didn't even owe, the Coalition has let some multinationals continue dodging tax."

Updated 15 December, 2020 9.22am (AEST): Further information added about the tax paid by Unisys during the reported financial year.

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