Australian Tax Office published a document stating that the companies Holden and Ford did not pay any taxes between financial years 2015 to 2016. This is after they have released a report showing their income has reached over $6.7 billion. The country has seen a rise of audit protection insurance among tax payers because they don’t want to spend a lot when faced with unexpected tax audit.
The same document revealed that Nissan and Sime Darby, the distributor of Peugeot and Citroen, did not pay their income taxes. The latter’s reason is that it does not have taxable income to begin with.
The tax agency released a list of over 2,000 huge companies in Australia that have already paid their taxes. With the same list, it was found out that companies that are owned by foreign investors are the smallest contributors to the tax revenue of the country. In fact, it only makes up one third of the total tax revenue despite the fact that they make up half of the list.
Australia’s Ford Motor Company was able to earn $2.53 but the document revealed that they have no taxable income in the last year that it has manufactured car in the country. Their financial year suffered a loss of $2.37 million aside from several bigger losses that accumulated within the same financial year.
General Motors Australia earned $2.51 billion while $1.76 billion was earned by General Motors Holden Australia. The car maker released a profit worth $153 million for the last financial year and they paid a tax of $188 million. They also suffered losses like Ford because of the closure of the company’s manufacturing operations.
According to the ATO, the corporate income tax should be paid based on the profit and not the gross income of a company. They added that it is common for large companies to suffer losses due to tax purposes as well as accounting purposed. For small to medium businesses, it is worth having audit protection insurance because majority of these companies will not survive tax losses.