Large corporate groups make a significant contribution to the Australian economy and play a critical role in the tax system. They're important in creating community confidence in our tax system. Confidence is gained directly by their tax contribution, and indirectly because their compliance underpins willing participation in other taxpayer segments.
Definition of a large corporate group
We define a large corporate group as one with a group turnover greater than $250 million. There are approximately 1,989 large corporate groups with more than 8,000 income tax reporting entities in Australia. This represents over 35,000 active companies. These groups include Australian public, Australian private and majority foreign-owned businesses.
Large corporate groups – ownership, 2021–22
Large corporate groups – total business income, 2021–22
Large corporate groups – total profits, 2021–22
How much tax large corporate groups pay
The amount of tax payable by large corporate groups has fluctuated over time. This generally reflects changes in economic conditions that impact on the largest taxpayers, especially fluctuations in the Australian dollar (AUD) price of commodities such as iron ore. This can be seen in the tax paid by diversified miners and other energy and resources groups.
Large corporate groups – contribution to tax revenue, 2016–17 to 2021–22
The number of large corporate groups in the Australian tax system is comparatively small, yet the impact they have on revenue is significant. The groups contribute a significant proportion to overall corporate income tax collections.
Large corporate groups – contribution to tax revenue, and concentration of tax contribution 2021–22
While Australian public businesses only make up 26% of these 1,989 large corporate groups, they pay 68% of the corporate income tax, against 52% of the gross income, for this group. This is driven by the significant profits earned by a relatively small number of very large Australian-owned groups. Once these companies are excluded, the overall performance of other Australian public companies, private companies and majority foreign-owned companies are relatively similar.
Large corporate groups – ownership and tax contribution, 2021–22
Large corporate groups are involved in a diverse range of sectors across the economy. Those in banking, finance and investment, mining, energy and water industries:
- are less than one-quarter (24%) of all large corporate groups
- earn one-third (39%) of business income
- contribute more than two-thirds (70%) of large corporate income tax.
Large corporate groups – industry demographics (number), 2021–22
Large corporate groups – industry demographics (business income), 2021–22
Large corporate groups – industry demographics (tax reported), 2020–21