The 2014–15 corporate transparency population of 1,904 entities includes 1,642 entities reported in 2013–14 and 262 new to the corporate transparency population. (see Figure 3).
Figure 3: Entities in scope for the 2014–15 corporate transparency measure
Exits
In 2014–15, 217 entities from the 2013–14 corporate transparency population (including 57 Australian private, 55 Australian public and 105 foreign-owned entities) were no longer in scope. Of these exits from the transparency population:
- 133 reported income levels below the transparency thresholds
- 50 joined a consolidated group during the year (so income earned after joining was reported by their head company)
- 12 were not required to lodge a company tax return due to various other reasons – for example, deregistration
- 22 had not yet lodged or had lodged a company tax return that was not processed by the cut-off date for the report (1 September 2016).
This is summarised in Figure 4.
Figure 4: Exits from the corporate transparency population – entire population
The number of entities that exited the transparency population in 2014–15 due to a drop in income is consistent with a normal level of churn in the population over recent years, including years prior to the first corporate tax transparency report.
Overall, there is a net increase of 45 entities reported for the transparency measure this year. The number of exits by reason are shown in Figure 5 (for Australian private groups), Figure 6 (for Australian public entities) and Figure 7 (for foreign-owned entities).
Figure 5: Exits from the corporate transparency population – Australian private entities
Figure 6: Exits from the corporate transparency population – Australian public entities
Figure 7: Exits from the corporate transparency population – foreign-owned entities
Income segment
While the corporate transparency population represents the largest entities operating in Australia, the majority of tax payable is accounted for by a small number of very large entities.
Corporate entities with income of more than $5 billion represent only 2% of the corporate transparency population, but they are liable for almost 60% of the tax payable for the population (see Figure 8).
Figure 8: Corporate entities by income segment, 2014–15
Industry segment
Australia’s largest corporations tend to operate in sectors of the economy that are characterised by a high degree of capital intensity and economies of scale. Different economic performance factors affect particular sectors of the economy at different points in the economic cycle.
Proportionally, tax payable is dominated by the financial services and mining sectors, reflecting the importance of these industries in Australia’s economy.
Figure 9: Corporate entities, by industry segment, 2014–15
Note: The industry classifications shown in the above graph are necessarily broad, and based on internal ATO criteria. The information presented is indicative only.
Ownership
The 998 foreign-owned entities in 2014–15 make up over half of the corporate transparency population and one-quarter of tax payable, while Australian public entities account for a further 30% of the population (581) and 70% of tax payable.
Figure 10: Corporate entities, by ownership type, 2014–15
Figure 11: Tax payable – corporate entities, by ownership type, 2014–15
Market Size
There are approximately 1.2 million companies operating in Australia and they reported total income tax payable of $67 billion in 2014–15. The 1,904 corporate tax entities reported under the transparency measure represent almost two-thirds of that amount.
As shown in Figure 12, the population includes:
- 1,324 corporate tax entities that are part of a large market economic group (groups with an annual turnover greater than $250 million), and
- 580 entities that belong to small and medium economic groups.
Figure 12: Corporate entities, by economic group, 2014–15
Note: Government and not-for-profit entities have been incorporated into either the large or the small and medium populations based on total income.