TechnologyOne has issued a statement in response to the release of Australian Taxation Office's (ATO) corporate tax transparency report on Thursday detailing the revenue, taxable incomes, and tax payable of 1,539 Australian and foreign public entities, as well as foreign private entities, saying that it was delivered without any context.
"It is disappointing to see what the ATO has done, as it is both confusing and misleading," said the company's executive chairman Adrian Di Marco.
In the ATO's report, TechnologyOne was listed as one of the companies in Australia that had an effective tax rate of less than 30 percent, where its revenue during the 2013-14 income year was AU$226 million and it only paid AU$9 million in tax during the period.
However, according to Di Marco, the company's effective rate would have been 30 percent had a legitimate research and development (R&D) tax offset not been applied, and therefore the company's tax was in line with the ATO's requirements.
"Our reduced tax is simple the result of our extensive R&D program of AU$41 million, which underpins our innovation and creativity programs, and which delivers our continuing long term success," he said.
"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."
Di Marco went on saying the company invests 19 percent of revenue into R&D each year, which equated to more than AU$41 million last financial year. At the time of reporting its 2015 full year results, the company said its R&D investments exceeded the market average of approximately 12 percent. Specific areas in which the company invested into were across the company's Ci Enterprise Suite, Ci Anywhere, and TechnologyOne Cloud.
"As a result, TechnologyOne receives significant R&D tax offsets to encourage our ongoing investment in fostering a diverse and vibrant ICT industry in Australia," Di Marco said.
Hewlett-Packard, Acer, Alcatel-Lucent, Citrix, Dimension Data, MYOB, NEC, Nokia, Toshiba, and Verizon were identified in the ATO's report as companies that did not pay tax during the 2013-14 income year.
But tax commissioner Chris Jordan stressed: "No tax paid does not necessarily mean tax avoidance".
Instead, the ATO 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.