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The ATO said it has ‘issues with the tech sector’ as report reveals Apple’s taxable income is just 4% of local revenue
- Around 30% of entities that lodged tax returns for the 2022–23 financial year did not pay any tax in Australia, including big names in technology like TPG Telecom, Sony Australia, Netflix Australia, and Canva.
- The Australian Taxation Office (ATO) issued its tenth corporate tax transparency report disclosing that more than 1,200 organisations did not pay tax for the given financial year.
- The ATO has issues with the tech sector, and smaller names which paid no tax included cybersecurity companies CyberCX, Trend Micro, and Tesserant; IT company Datacom; telecommunications company Superloop; fintech firm Zip Co; and Chinese giant Huawei Technologies.
- According to Assistant Treasurer Stephen Jones, identifying multinational tax avoidance is a “huge priority for the government”, and some businesses rightly do not always pay tax, such as when they have made a big capital investment.
- However, large technology corporations have often been accused of using sophisticated accounting to minimise what they owed under Australia’s 30% corporate tax rate. Microsoft’s local data centre business paid no tax in 2022-23 on $1.1 billion of income.
- The ATO’s report showed that for a second year in a row, the mining sector paid more tax than all other sectors combined.
- The ATO outlined how it uses artificial intelligence (AI) technologies to improve its processes and crack down on tax avoidance. AI systems are used to review large quantities of unstructured data, generate risk models, and provide real-time prompts to taxpayers.
- AI was used to process 36 million documents, raising more than AUD 256 million in liabilities and collecting over AUD 65 million in cash. AI is also used for fraud protection, matching information submitted by taxpayers, and identifying high-risk work-related expense claims.
- Apple’s taxable income is just 4% of its local revenue, paying just over AUD 142 million tax in 2022-23 after making over AUD 12 billion in Australia.
- Facebook Australia, while it reported almost AUD 1.3 billion in income, paid almost AUD 38 million in tax, while Google Australia paid AUD 124 million tax on nearly AUD 2 billion of income, and its Google Cloud arm paid just under AUD 9 million tax on AUD 158 million income.
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