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  • Trends and latest findings

    This is the second year we have released the large super funds income tax gap estimate.

    Large tax adjustments and changes in economic conditions, which tend to be sporadic in nature, led to some volatility in this gap estimate.

    The large tax adjustments are due to our close engagement with large super funds. Funds are quick to correct any misinterpretations of the law that we have brought to their attention.

    The key contributing factors to the variability of the tax gap estimates include:

    • incorrect reporting of foreign income and overclaiming of the foreign income tax offset
    • incorrect use of the CGT discount and the capital losses offset provision for gains from non-taxable Australian property of a foreign trust, which are often contingent on market and taxpayer specific conditions
    • overclaiming of franking credits.

    Overall, the net income tax gap ranges between 1.3% and 2.5% over the six years we have estimated.

    Note that amounts reported in this estimate are rounded to the nearest $ million.

    Table 1 shows the tax reported, adjustments, gross and net gaps from 2011–12 to 2016–17.

    Table 1: Income tax gap – large super funds, 2011–12 to 2016–17

    Element

    2011–12

    2012–13

    2013–14

    2014–15

    2015–16

    2016–17

    Gross gap ($m)

    278

    116

    211

    220

    177

    255

    Amendments ($m)

    112

    19

    39

    73

    41

    73

    Net gap ($m)

    166

    97

    172

    146

    136

    182

    Tax paid ($m)

    7,794

    7,184

    6,725

    7,254

    8,555

    11,069

    Theoretical liability ($m)

    7,960

    7,281

    6,896

    7,400

    8,691

    11,251

    Gross gap (%)

    3.5

    1.6

    3.1

    3.0

    2.0

    2.3

    Net gap (%)

    2.1

    1.3

    2.5

    2.0

    1.6

    1.6

    Figure 1 displays the trend in tax reported and the net income tax gap over the same period.

    Figure 1: Amount paid and net income tax gap – large super funds, 2011–12 to 2016–17

    Figure 1. This graph shows the amount of income tax paid and the net gap stated in Table 1 for the years 2011–12 to 2016–17.

    Figure 2 displays a trend of the gross and net income tax gap percentages over the same period.

    Figure 2: Gross and net income tax gap percentage – large super funds, 2011–12 to 2016–17

    Figure 2. This graph is a pictorial representation of the gross and net gap percentages stated in Table 1 for the years 2011–12 to 2016–17.

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      Last modified: 17 Oct 2019QC 56335