Oil and gas giants Exxon Mobil Corp and Chevron Corp paid no tax in Australia in the 2016 financial year for the third year in a row, despite reporting billions of dollars in income from its Australian operations, a new report from the ATO shows.
Exxon Mobil, which has oil and gas interests in the Bass Strait and a stake in the giant Gorgon LNG project among other assets in Australia, reported $6.7 billion in income but reported a loss for taxable income and paid no tax.
According to the Sydney Morning Herald, the company said it had no taxable income following its investments of almost $18 billion over the past few years on major projects including Gorgon and the Kipper Tuna Turrum field.
Chevron and Shell also avoided tax bills, reporting $2.1 billion and $4.2 billion ($97 million in taxable income) in Australian respectively for 2016. Neither company paid tax.
Chevron said it expected to pay significant taxes once the Gorgon and Wheatstone LNG projects became fully operational. Shell is also a partner in Gorgon LNG.
Despite the data snapshot, ATO deputy commissioner Jeremy Hirschhorn said the community should have confidence that the largest companies are being required to pay the right amount of tax on their Australian profits, and most do so voluntarily.
“Australia has one of the strongest corporate tax systems in the world,” Mr Hirschhorn said.
“In 2014-15, large corporate groups paid 91 per cent of their tax due voluntarily, with a further three percent raised through ATO compliance activities.
“It is important to remember corporate income tax is payable on profits, not gross income,” he said.
“In any given year a significant percentage of even the largest companies make losses, not just for tax purposes, but also for accounting purposes. It reflects the tax returns as lodged, and does not reflect subsequent ATO compliance activity.”
Mr Hirschhorn also said the information published reflects the state of the economy in 2015-16, which saw a significant drop in profitability of energy and resources companies, a sector where company profits are highly dependent on commodity prices.
“On the back of solid growth in company profits and higher commodity prices, we are seeing a strong increase in company tax collections in 2016-17, which will be reflected in the data next year,” Mr Hirschhorn said.