Key News Summary – the Commissioner has released the 4th Corporate Tax Transparency Report, for the 2016-17 year showing 2019 entities, with overall  increases in all of total income, taxable income, tax payable and the number of entities. 14 entities pay the PRRT and 20% to 30% of the ASX 500 report current year losses.


 

On 13.12.18, the ATO released the fourth annual report on corporate tax transparency, on the 2016-17 year and the trends with the previous three years. Legislation specifies the type of information we are required to provide in the report.

These reports contain the name, ABN, total income, taxable income and tax payable for • Australian public and foreign-owned corporate tax entities with a total income of $100 million or more; and • Australian-owned resident private companies with a total income of $200 million or more.

Total income tax payable – There are 2,109 corporate entities in the 2016–17 corporate transparency population, with total income tax payable of $45.7 billion. Compared to 2015–16, this represents a net increase of 68 entities (3.3%) and an increase in tax payable of $7.5 billion (19.6%).

Population overview – The 2016–17 corporate transparency population consists of 2,109 entities, which reflects a net increase of 68 entities from the previous year. The 2016–17 population includes 1,770 entities that were reported in the 2015–16 population, and 339 that were not.

Four-year trend analysis – Over the four years to 2017, all industry segments reported growth in total income, taxable income, tax payable and the number of entities – except the mining, energy and water segment. Increasing number of entities was a key contributing factor to the increase in these figures.

Australian-owned resident private entities – Approximately 81% of Australian private entities in the transparency population are linked to groups controlled by wealthy individuals, including high wealth individuals. The groups consist of close to 11,000 linked entities, including companies, trusts, partnerships and superannuation funds.

Total petroleum resource rent tax payable – There are 14 corporate entities in the 2016–17 PRRT transparency population, with total PRRT payable of $946 million. The number of entities paying PRRT increased from nine in the previous year and PRRT payable increased from $845 million.

Net losses and nil tax payable – Generally, around 20–30% of Australian Securities Exchange (ASX) 500 companies report a current-year net loss to their shareholders in any given year. Importantly, this shows even extremely large companies will sometimes make a loss in a particular year.

[ATO website: 2016-17 Tax Transparency; LTN 241, 13/12/18; Tax Month – December 2018]

FJM 19.12.19

CPD (comprehension questions)

  1. This Corporate Tax Transparency Report is for what year.
  2. What are the 2 main groups who’s figures get reported, anonymously, in these aggregates?
  3. What is the increase in entities and tax payable, over the prior 2015-16 year?
  4. How many entities are ‘linked’ to the individuals who own the private companies?
  5. How much was paid in PRRT, in the 2016-17 year?
  6. What proportion of ASX 500 companies report current year losses?

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