Microsoft’s datacentre business and the Optus parent Singtel are among a string of major corporations generating billions of dollars in revenue in Australia while paying zero income tax.
Well-known multinationals including Netflix also only pay tax on a small fraction of their turnover, according to the Australian Taxation Office.
The ATO’s transparency database for ۲۰۲۴-۲۵ shows more than one-quarter of big companies, often based overseas, regularly pay no or little corporate tax in Australia.
This includes the Brazilian-owned JBS Global Meat Holdings, which generated more than $۴.۸bn in revenue but paid zero tax, in a recurring pattern for the global food company.
While the ATO does not typically publish tax information of individuals or companies, it is required by parliament to do so for all entities that generate at least $۱۰۰m in Australian income.
The report did not provide detail as to why individual companies paid zero tax but noted there could be legitimate reasons for it – including making a loss, or using deductions and offsets to lower the taxable income.
Overseas companies often reduce their taxable income by making payments to related entities located in lower-taxing jurisdictions. The practice is known as profit shifting and can attract the scrutiny of regulators.
The ATO’s acting deputy commissioner Michelle Sams said the agency was increasingly focused on making sure digital businesses and supply chains paid their share of tax.
“We look very closely if there’s no tax being paid in significant industries, including things like datacentres, to make sure that the level of tax being paid reflects the economic activity that’s happening in Australia,” Sams said.
Microsoft’s datacentre business generated $۲.۳bn in revenue from Australia during the financial year but reported no taxable income. The company’s computer and software business paid $۱۶۰.۶m in tax after generating more than $۹.۲bn in revenue in Australia.
Microsoft was contacted for comment.
Netflix’s local operation, which regularly pays little tax in Australia, paid the ATO $۸.۴m after generating more than $۱.۴bn in local revenue. TikTok Australia paid $۱۷.۳m in tax after recording $۶۸۶.۶m in revenue.
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An ATO ruling designed to clamp down on profit shifting is expected to raise significant sums from technology companies. But it is expected to face legal challenges.
Parliament also passed revamped media bargaining laws in August, clearing the way for levies on global tech platforms that fail to strike deals with Australian news outlets over the use of their journalism.
Singtel went from a regular taxpayer in Australia before ۲۰۲۰ to a company that now regularly reports zero taxable income.
In ۲۰۲۴-۲۵, it generated more than $۸.۳bn in total income but didn’t pay tax.
An Optus spokesperson has previously said its negative tax position was due to infrastructure investments and operating expenses.
The New Zealand dairy giant Fonterra was another major earner, with more than $۲.۴bn in total income, that didn’t pay tax – as was Sony Australia ($۱.۶bn in revenue) and the online retailer Kogan ($۶۴۲m).
