More proof that journalists are lobbyists

In the fairfax papers today is another “big companies should pay more tax” article. And like most of these articles, it is just rubbish.

The article states that ASX listed companies have tax rates at less than 30% – even lower than 10% – from analysing their accounts and looking at their tax expense line.

Let me tell you how this happens and you tell me if there is a problem.

I am a successful Australian Company. So successful I list on the ASX and in a few short years get 1/3rd of my income from Australia and the rest from the US. As the US income is taxes at 35% in the US before I bring it back to Australia I don’t pay another 30% Australian tax on top of the 35% I have already paid (the old section 23AJ ITAA36 or the new Division 768 ITAA97).

So as only 1/3rd of my income is taxed in Australia (as the other 2/3rds are taxed at 35% in the US) my effective tax rate is 10% as shown in my AIFRS accounts lodged with the ASX and ASIC.

There is no problem, avoidance, unethical behaviour… at all here. Except lobbyists and journalist knowing they are telling half truths.

UPDATE: Now the tax justice network behind this report are saying they don’t know why the tax rates are less than 30%…. They obviously don’t read this blog.

UPDATE 2: I just realised they included listed property trusts… Trust taxation for the very dummies – unit holders are taxed on their present entitlement, not the trusts. I wonder why the listed trust paid so little tax????? As my seven year old would say – derrrr!

UPDATE 3: I just heard an ABC journalist say to Senator Day “can’t we just make no changes to benefits and pensions and simply recover the $8 billion unpaid company tax by the ASX200 to balance the budget?” You watch how for the next decade “spendies” and their mouthpiece journalists will still claim there is $8 billion in unpaid company taxes. Great way to have a real debate about government revenues.

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About Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.
This entry was posted in Income Tax, Tax Policy. Bookmark the permalink.

One Response to More proof that journalists are lobbyists

  1. Pingback: Is there massive corporate tax avoidance? | Tax Rambling

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