TechnologyOne, an enterprise software company listed among the ASX 200, has claimed the Australian Taxation Office's (ATO) corporate tax transparency report, which states the company has paid less than 30 percent tax in the 2014-15 financial year, is "both confusing and misleading".
The company's executive chairman Adrian Di Marco said TechnologyOne's effective tax rate would have been 30 percent had the government research and development (R&D) tax offset not been applied.
The company had a total income of more than AU$211 million in 2014-15, but paid 7.4 percent tax of AU$9.3 million on a taxable income of AU$69.2 million.
"Our reduced tax rate is simply the result of our extensive R&D program, which underpins our innovation and creativity programs and is critical to our continuing long term success," he said in a statement.
"We are doing exactly what the federal government wants Australian companies to do. We are being innovative, creative, undertaking R&D, and claiming a legitimate R&D tax credit that we are entitled to claim."
TechnologyOne has an R&D facility in Brisbane and claims to invest 19 percent of its revenue into R&D every year, which equates to AU$46 million in the 2014-15 financial year.
Atlassian, which was listed as having paid zero tax in 2014-15, also said that it invests "millions" in R&D every year to create new products and that this is not reflected in the corporate tax transparency report.
"That deep investment generates R&D tax offsets for every dollar Atlassian spends on eligible R&D activities, reducing the company's Australia tax payable to nil," an Atlassian spokesperson said.
The ATO's corporate tax transparent report revealed that dozens of notable information technology and communications companies failed to pay any tax in 2014-15, including the Australian arms of Acer, Atlassian, Citrix, Dimension Data, HP, IBM, MYOB, NEC, and Vodafone.
The ATO stated, however, that no tax paid does not necessarily mean tax avoidance.
"Even companies with very high total income sometimes make losses ... there are many legitimate reasons why this might be the case," the ATO said.
It added that figures provided in its transparency report do not provide the full picture of a company's tax affairs or their level of engagement with the ATO.
"Noting that we cannot talk about specific taxpayers, be assured there are no surprises here for the ATO," Commissioner of Taxation Chris Jordan said in a statement.
"I should also say we collect, on average, about AU$2 billion from our compliance activities with these large and private companies each year, which is not reflected in the data released today."
Meanwhile, Apple, Samsung, Microsoft, and Google all increased the amount of tax they paid in Australia over the 2013-14 financial year. The companies admitted last year they were being audited by the ATO for tax avoidance. Much of Google Australia's revenue from advertising is taxed in Singapore, where the tax rate is much lower -- a practice also employed by Microsoft.
Updated 12.40 pm AEDT 13 December 2016: Added comment from Atlassian.