Big business tax take hits $100bn, as corporate Australia forced to hand over more cash

The ATO says it is watching Australia’s mining and resources companies after defeating earlier attempts to run sales through offshore entities.

The ATO revealed it reaped more than $11.6bn from the oil and gas sector in 2022-23.

The tax office is turning the screws on corporate Australia, revealing its largest ever tax take after $100bn was collected from the biggest companies in the 2022-23 financial year.

The Australian Taxation Office said it was reaping the spoils of several years of tough fights with overseas-owned corporations, in particular those operating in the resources and mining space. The ATO said it had booked $97.9bn in tax from willing taxpayers in the 2022-23 period, up 16.7 per cent from the year prior, driven by an explosion in Australia’s minerals ­exports.

But this was bolstered by a further $2bn in tax taken as a result of actions of the Tax Avoidance Taskforce in the period, according to ATO deputy commissioner Rebecca Saint.

Ms Saint, who leads the ATO’s compliance programs for public and multinational groups, said she couldn’t disclose which companies were forced to hand over the extra $2bn in the period, but noted it related to major corporates that faced tax assessments in the period.

ATO data shows large corporations paid 96 per cent of the income tax “they should have” for 2021-22. Almost 31 per cent of companies did not pay tax in the 2022-2023 period, down from almost 36 per cent in 2013-2014.

Ms Saint said Australia was benefiting from years of hard work in combating resources companies running offshore sales and marketing hubs aimed at circumventing the country’s tax rules. “We estimate we’ve got coverage on around 90 per cent of commodities sold in marketing hub arrangements,” she said.

ATO deputy commissioner Rebecca Saint.

Mining giant Rio Tinto reached a $1bn settlement with Australia in July 2022 over its Singapore marketing hub operations, after BHP also settled a similar case in 2018.

But Ms Saint said the ATO was continuing to investigate related party sales from Australia’s biggest companies, warning the tax office was also monitoring companies to “make sure there’s no changes”.

The ATO is also riding high on the back of court wins against gas giant Chevron, with Ms Saint noting the decision dealt with related party arrangements and intercompany loans to decrease profits. She said the ATO had taken more than $45bn of interest expenses off the table for corporate Australia on the back of the Chevron decision.

“Clearly oil and gas projects require a lot of capital … you’d expect we’d look at that very closely,” she said.

The ATO revealed it reaped more than $11.6bn from the oil and gas sector in 2022-23.

The latest report from the tax office covers more than 3985 companies. This includes a further 1272 new companies captured in the reporting data after rules changed to include businesses with a turnover of $100m or more. Previously reporting was limited to taxpayers of $200m turnover or more.

But Ms Saint said the ATO expected the coming tax reports to show a lower take, with record resource prices unlikely to be repeated.

“This is the peak of that record period, off the back of strong commodity prices,” she said.

The ATO’s Justified Trust program polices some of Australia’s biggest companies, with the tax office noting it remained concerned about certain behaviours of big business.

Ms Saint said the ATO was investigating dealings and pricing, noting investigators were increasingly seeing “mischaracterisation of business dealings” as an issue in tax matters.