From 2014–15, the government has implemented a range of initiatives designed to deal with tax avoidance, such as the Tax Avoidance Taskforce and the multinational anti-avoidance law. These initiatives enhance existing compliance programs, and increase capacity to identify and prevent tax evasion and tax avoidance.
There are 1,904 corporate entities in the 2014–15 corporate transparency population, with total income tax payable of nearly $42 billion.
Compared to 2013–14, this represents a net increase of 45 entities (2.4%) and a decrease in tax payable of $59 million (0.1%). The aggregate results mask a wide range of underlying changes across the various segments of the population.
In 2014–15, commodity prices declined significantly, reflecting decreasing global demand for energy resources and the gradual slowing in China’s economic growth. Meanwhile, economic conditions improved for manufacturers as the exchange rate continued to decline from previously high levels.
As a result, tax payable for the energy and resources segment of the corporate transparency population declined considerably, while the manufacturing and financial services segments experienced the strongest growth.
Figure 1: Change in tax payable, by industry segment, 2014–15
There was also a reduction in tax payable for Australian public entities of $1,353 million, which was largely offset by increases of $1,095 million for foreign-owned entities and $199 million for Australian private entities (see Figure 2).
Figure 2: Change in tax payable, by ownership segment, 2014–15
For the purposes of this report, entities in the population subject to the $100 million income threshold include those where the foreign shareholding percentage reported on the company tax return is greater than 50% and those classified as ‘Australian public’.
The ‘Australian private’ segment consists of private Australian entities that have total income greater than $200 million (the corporate transparency threshold).