ATO Commissioner Chris Jordan described the record tax revenue collected from the large market as an “outstanding result”. Photo: ATO.
An extra $6.4 billion in tax revenue has been secured from Australia’s largest businesses and multinational entities by the Australian Taxation Office (ATO).
ATO Commissioner Chris Jordan attributed the record 2022-23 financial year result to the ATO’s vigorous scrutiny and continued compliance intervention among large businesses.
“It is an outstanding result that reflects years of sustained effort from the Tax Avoidance Taskforce,” he said.
“The Taskforce scrutinises the tax outcomes of the largest 1100 businesses and multinational groups to verify that they are paying the right amount of tax and has helped to collect, on average, an additional $2 billion each year from public and multinational businesses.
“Last financial year’s result is three times more than this.”
The ATO said earlier interventions in the oil and gas sector now flowing through the tax system represented about $4.4 billion of the record tax revenue paid. This result follows the ATO capitalising on the success of a 2017 Federal Court case where their assessment of $340 million in taxes and penalties owed by multinational energy corporation Chevron was upheld.
The court ruling followed the ATO’s decision to disallow deductions claimed by Chevron for interest payments made to related offshore parties in respect of a multi-billion dollar loan.
As a consequence, the ATO said more than $40 billion of past and future interest deductions for related party finance arrangements were removed from the tax system, compelling large businesses to pay more tax and sooner.
“Our intervention and strong commodity prices mean that some oil and gas companies are now among the biggest taxpayers in Australia,” Commissioner Jordan said.
“We have been planting these seeds for many years and this work is now bearing fruit with significant outcomes for the Taskforce’s compliance and assurance programs.”
Since the Taskforce commenced in 2016, it has helped secure more than $27.7 billion in tax revenue from multinationals and large public and private businesses.
“We will continue to hold public and multinational businesses to account to ensure they are paying the right amount of tax,” Commissioner Jordan said. “We have confidence that most large businesses are doing the right thing and meeting their lawful tax obligations. The community can be assured the ATO will detect and pursue those organisations that try to game the system.”
The ATO will make its annual corporate tax transparency report publicly available later this year. The report includes aggregated data for some of the largest corporate entities.
