David Jones. Foxtel Cable TV, Ten Network: just three of the household media names which this morning registered a startling blank next to taxable income and tax payable on a newly-issued list by the Australian Tax Office.
A number of companies operating in the advertising, media and entertainment space have made an appearance on the list, failing to pay tax for as yet undisclosed reasons during the 2013-14 income year, many of whom AdNews reports on, on a regular basis.
They include: APN News and Media, David Jones, IbisWorld (EDU Holdings), Foxtel Cable TV, Fremantle TV, Mondelez, News Australia, News Pay TV, Qantas, Ten Network, Vodafone and Warner Bros Entertainment.
Notably, Ten chairman David Gordon told his board at the AGM yesterday: “We are competing against large and well-funded online competitors … many that pay little or no tax in Australia.”
Media companies such as Google and Apple have paid tax, but there is questionable disparity between earnings and the amount of tax paid. Earlier this year the companies faced an enquiry into tax avoidance. Maile Carnegie, Google MD, and News Corp Australia CEO Julian Clarke gave evidence.
AdNews is yet to trawl the full document to get a better understanding of which companies paid little or no tax, while deriving large taxable income and profits, however, the ATO has insisted that there may be legitimate reasons why companies have no tax payable. Of the 1500 companies listed around 600 did not pay tax.
Carried forward losses, accounting to tax adjustments, economic conditions and investment strategies can affect the reported income of these entities resulting in nil taxable income.
Certain industries in the 2013-14 income year, the ATO revealed, were still recovering from the global financial crisis with significant carried forward losses, bad debts or restructuring activities underway.
Commissioner of Taxation, Chris Jordan said this morning: “No tax paid does not necessarily mean tax avoidance.”
He added, “Any companies with unusual financial or taxation numbers are closely investigated by the ATO”.
If an entity did not lodge a return for the 2013–14 income year by the cut-off date for the 2013–14 report, a blank will automatically register by its name and their information for 2013–14 will instead be published in 2016 at the same time as the report for 2014–15.
The Commissioner has a legislative duty to report information about certain corporate tax entities with a total income of $100 million or more for the 2013-14 income year, following the introduction of new laws which were sparked off by the former Labour government.
The report will be produced annually and encompasses all relevant corporate tax entities. These entities may be Australian-owned or foreign-owned.
AdNews is in the processes of reaching out to the companies named and will take an in-depth look at the reasons involved.
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