One in five corporations with annual profits greater than $100 million paid no tax last year, the Australian Tax Office has revealed.
Michael Cranston, one of the ATO’s deputy commissioners, revealed the figure to a Senate hearing into corporate tax avoidance.
Corporations avoid paying tax by what is euphemistically called profit-shifting. Basically, they move profits overseas to tax havens in places like Singapore, Switzerland, Ireland or Vanuatu. An ATO report last year found that, in 2011-12, more than $60 billion was moved to tax havens.
An Australian Financial Review investigation last year found that Google alone shifted “an estimated $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland in the last decade”.