Atlassian uses research credit to pay no tax

Tech darling Atlassian paid zero tax in Australia despite drawing in more than $1bn in local revenue.

Atlassian co-founder and co-CEO Mike Cannon-Brookes Picture: AAP

Tech darling Atlassian paid zero tax in Australia despite drawing in more than $1bn in local revenue, after using research and development tax credits to offset $137m in taxable income.

The New York-listed software company was among the 21 per cent of 2000 large companies and multinationals operating in Australia that paid no tax during the 2017-18 financial year, according to the fifth annual report on corporate tax transparency, published by the Australian Taxation Office on Thursday.

The entity-level tax payable data released by the ATO also shows the contributions to the budget bottom line by tech giant Apple, which paid $120m to the government revenue agency based on $400m worth of profit, which was drawn from more than $9bn in revenue.

Facebook’s local operations paid a $12m tax bill on $42m of taxable income and $500m of revenue. Tax is assessed on taxable income, not revenue.

Mining magnate Gina Rinehart has taken the mantle as one of Australia’s biggest taxpayers, with Hancock Prospecting paying $352m to the government.

Mining magnate Gina Rinehart Picture: Mike Keating

Little-known Queensland billionaire Sam Chong paid $266m through his Jellinbah Group, which owns majority stakes in the Jellinbah Mine in Queensland’s Bowen Basin and the Lake Vermont Mine 240km northwest of Rockhampton, with subsidiaries of Japanese group Marubeni and global mining giant Anglo-American.

Harry Triguboff’s construction empire Meriton swung the ATO $185m, Clive Palmer’s Mineralogy paid the tax man $44m, while $42m was paid by Lindsay Fox’s Linfox trucking group.

The ATO’s report, which zeroes in on more than 2000 large companies, more than half of which are foreign-owned, shows the biggest corporations operating in Australia paid a combined total income tax of $52.3bn in the 2018 financial year, accounting for about two-thirds of all corporate tax paid during the period. That was up $6.6bn over the prior year’s $45.7bn tax bill — a rise of 15 per cent over the year — due to strong increases in commodity prices.

The ATO found 79 per cent of corporations at the overall group level paid some level of income tax during the year, an increase from 77 per cent a year earlier.

In Australia, corporate profits are taxed at a 30 per cent rate, and if a company makes a loss it is not required to pay tax. About 20-30 per cent of companies report a loss in any given year.

During the 2017-18 year, major public and private companies that paid no tax included a company owned by Australia’s richest man, Anthony Pratt. Pratt Consolidated Holdings drew in $2.8bn in revenue and produced a taxable income of $60m. News Australia Holdings, owned by News Corp, publisher of The Australian, made $2.45bn in income and made a $60m taxable profit, but recorded a zero tax liability. “We meet all relevant tax obligations,” a News Corp spokesman said.

Property giant Lendlease amassed $9.4bn worth of revenue and produced a $70m taxable income but paid no tax. Chevron, which recently struck an $866m settlement with the government agency over allegedly using high interest rates on an inter-company loan, paid no tax on $5.2bn of revenue.

Atlassian, which in 2014 moved its corporate headquarters to London, where it gains certain advantages, especially in tax arrangements, also paid no tax in the 2016-17 financial year on local revenues of $773m.

An Atlassian spokeswoman said the company invested millions of dollars in research and development every year. “That deep investment generates R&D tax offsets for every dollar Atlassian spends on eligible R&D activities, reducing the company’s Australia tax payable,” the company said.

Rival software company MYOB, which was recently led by new Business Council of Australia chairman Tim Reed, paid no tax despite making $114m of taxable income drawn from $366m worth of revenue.

An MYOB spokeswoman said the company had now paid tax for the 2017-18 financial year after carrying forward losses in previous years.

“MYOB is a signatory to the Board of Taxation’s Corporate Tax Transparency Code Register and believes in a transparent and fair tax system. MYOB prides itself on being a good corporate citizen,” MYOB said.

While controversial Chinese telco Huawei paid $25m to the ATO on $86m worth of profit and $624m of revenue, British multinational defence and aerospace contractor BAE Systems paid no tax despite drawing in $1bn in revenue and amassing almost $80m of taxable income. A spokeswoman for BAE Systems said the company had carried forward tax losses related to historic projects.

“More recently, BAE Systems Australia had a tax charge of $28m for the tax year to December 2018,” the company said.

BlueScope, which booked $5.7bn worth of revenue and a $60m taxable income, paid no tax, which a spokesman said was due to tax losses it carried forward.

By the end of June 2018, those losses totalled $1.84bn. “BlueScope … will pay tax when those losses are fully used. BlueScope does pay tax in other countries,” the company said.