Hewlett-Packard paid no Australian tax despite making AU$3.1b in 2014

The Australian Taxation Office's corporate tax transparency report has revealed that 38 percent of the 1,539 Australian and foreign public companies, as well as foreign private entities, did not pay tax in 2014.

While Hewlett-Packard South Pacific earned just over AU$3.1 billion during the 2013-14 income year, it did not pay any tax, the Australian Taxation Office (ATO) has revealed in its corporate tax transparency report detailing the revenue, taxable incomes, and tax payable of 1,539 Australian and foreign public entities, as well as foreign private entities.

Globally, during HP's second quarter earnings for the 2014 financial year the company reported net income of $1.3 billion. Similarly, its fourth quarter results showed that it profited by $1.4 billion on revenue of $29.1 billion. These results, however, occurred prior to the company splitting its business into HP Inc and Hewlett-Packard Enterprise (HPE).

HPE has informed ZDNet that the company "adheres to the highest ethical standards and maintains a culture of cooperation with all regulatory authorities".

It was reported by iTnews in March that the company had made a loss of AU$152 million in the 2013-14 financial year.

Acer, Alcatel-Lucent, Citrix, Dimension Data, MYOB, NEC, Nokia, Toshiba, and Verizon were also listed as companies that did not pay tax during the 2013-14 income year.

Companies are able to reduce their taxable income by carrying forward losses without having to resort to using the so-called Double Dutch Irish Sandwich technique, where companies funnel money through countries outside of Australia to pay very low taxes domestically, despite earning significantly high revenue from sales in Australia.

The ATO also noted that while there were companies that reported nil tax payable, it was because approximately 63 percent of all ASX-listed companies reported a loss to their shareholders in the 2013-14 financial year due to ongoing consequential impacts felt from the global financial crisis.

The ATO said ASX data showed more than 20 percent of companies make an accounting loss in any given year.

"No tax paid does not necessarily mean tax avoidance," Tax Commissioner Chris Jordan stressed.

Meanwhile, Apple, Google, and Microsoft were listed as companies that paid only a small fraction of their total earnings in tax. Apple's total Australian revenue during the 2013-14 year was AU$6.2 billion, and only paid AU$74 million in tax; Google made AU$357 million and paid AU$9 million in tax; and Microsoft's total income was AU$568 million and tax payable was AU$31 million.

All three companies earlier this year admitted they were being audited by the ATO for tax avoidance.

Apple and Google have previously also been called out by the federal government for employing the so-called Double Irish Dutch Sandwich method.

Of technology companies on the list, the smallest amount of tax was paid by Lenovo, which reported taxable income of AU$372 million and paid just under AU$40,000 in tax during 2013-14.

"Publishing this data is a step forward in improving corporate tax transparency," Jordan said in a statement on Thursday.

"Most large corporates, particularly domestic Australian companies, meet their tax obligations, notwithstanding that we do have some significant disputes with some of them."

The release of the report comes as the Australian government works on cracking down on multinational companies operating in Australia that are avoiding paying tax.

Earlier this month, the federal government passed new legislation that will see the penalties for tax evasion by multinational companies increase. From the start of 2016, multinational companies found to be avoiding tax will have to pay back the tax owed, plus a 100 percent penalty.

At the same time, under the new laws multinationals will need to provide the commissioner of taxation with information of transactions between each Australian-based subsidiary and its associated overseas enterprises, along with the amount transferred and the business' reasoning for its transfer pricing determinations.

The ATO noted that when these laws come into effect, the data for some Australian-owned resident private companies will also be pushed in early 2016.

The implementation of the new laws by the Australian government comes as part of recommendations that were made by the Organisation for Economic Cooperation and Development (OECD) from its G20-commissioned base erosion and profit-shifting (BEPS) project. Under BEPS, the OECD expects to be able to retrieve as much as $240 billion in lost revenue each year through dodgy tax practices across the globe, which it claims represents up to 10 percent of global corporate income tax revenues.

In August, it was revealed that AU$31 billion was funnelled from Australia to Singapore in a year by 10 multinational companies.

With AAP