These global tech vendors didn't pay tax in Australia

The Australian Taxation Office has published tax data on more than 1,500 public and privately held companies, showing hundreds didn't pay tax in in Australia in 2013-14.

The report details total income, taxable income and the amount of tax paid by companies with a revenue of over $100 million. Of the 1539 companies listed, almost 600 did not pay any tax.

Technology vendors that paid zero tax include Acer, Alcatel-Lucent, Citrix, HP, NEC and Vodafone. Global service providers Dimension Data and NTT also paid no tax in the period. 

The fact many companies avoided paying tax is not a suggestion of anything illegal, nor necessarily tax avoidance strategies. Some of the companies failed to turn a profit, so were not in line for the Australian corporate tax rate of 30 percent. Others may have had various deductions or been able to claim carry-forward tax losses.

HP, for example, turned over $3.1 billion but had no taxable income – the vendor has chalked up significant losses for several years.

Chinese hardware giant Lenovo posted total income of $372.2 million but only had a taxable income of $132,344, and hence paid just $39,703 in tax.

Several tech companies paid no tax despite generating millions in taxable income, such as Citrix Systems, Macquarie Telecom and Verizon Australia.

The Australian arms of Apple, Microsoft and Google were also listed – each of the tech giants have been criticised in the past for avoiding tax obligations.

Apple and Microsoft both paid the 30 percent rate on their taxable income.

Apple's total income was $6.1 billion, with a taxable income of $247.4 million and a tax bill of $74.1 million. Apple Australia, which is owned by Apple Ireland, has a taxation structure dubbed "elegant" by one Australian taxation expert.

Microsoft's Australian revenue was a fraction of its Cupertino rival – Microsoft had a total income of $567.7 million, a taxable income of $103.9 million and a tax bill of $31.2 million. The software giant has been criticised over its tax structure in the past, which sees much of its software and services revenue booked in Singapore, where the corporate tax rate is 17 percent.

Google earned $357.7 million in total income, $90.9 million in taxable income and paid $9.2 million in tax – a rate of roughly 10 percent.

The taxman is watching

“No tax paid does not necessarily mean tax avoidance,” said ATO commissioner Chris Jordan. “Any companies with unusual financial or taxation numbers are closely investigated by the ATO. Over half of these 1500 companies have been subject to ATO review or audit over the past three years, with the ATO’s risk and intelligence systems working all the time to ensure that we can all have confidence in the tax system.”

Jordan said the ATO traditionally raises an additional $2 billion in taxes through compliance actions with these companies.

"Most large corporates, particularly domestic Australian companies, meet their tax obligations, notwithstanding that we do have some significant disputes with some of them," said Jordan.

"As for the role of foreign-owned entities operating in Australia, investment from these companies should not be premised on no or very little tax being paid on significant profits generated in Australia.

"Some of these foreign owned companies are overly aggressive in the way they structure their operations. We will continue to challenge the more aggressive arrangements to show that we are resolute about ensuring companies are not unreasonably playing on the edge.

"If they do, they can expect to be challenged."