BG International (Aus) Pty Limited
BG International (Aus) Pty Limited
|4 year total income||$9,732,011,012|
|4 year taxable income||$0|
|4 year margin||0.00%|
|4 year tax payable||$0|
|4 year tax payable||0.00%|
Environmental damage and extortionate gas prices; surely the boom in coal seam gas has delivered some benefit to the public? No, CSG explorer BG enshrines perfectly the public interest debacle which is onshore gas and LNG.
Former chief executive Catherine Tanna (now head of EnergyAustralia which also pays no tax), once claimed BG would be paying $1 billion in tax by 2014. It has paid nothing.
BG has been renamed QGC Upstream Holdings Pty Ltd. It was taken over by oil major Shell in 2016 and despite its $9.7 billion in gas sales over four years, pays no tax. You won’t find those sales disclosed in the financial statements of this company however.
In this feeble financial report, audited by EY, BG doesn’t even disclose revenue, just a loss of $5.6 million for the year to December 2017 and a tax benefit of $3.5 million.
Besides siphoning profits from Australia’s natural resources offshore, it seems one of the major functions of BG is to avoid tax. Its balance sheet records deferred tax assets of $1.8 billion ($1.55 billion previously), which indicates it won’t pay tax for some time yet.
Then there is this entry in the notes: “Inter-company loan – tax losses transferred $2.15 billion”. Who to? Where to? BG and EY don’t tell us.
On the environmental front, the company has set aside $27.86 million for decommissioning its wells and restoration, mine rehab costs which may be incurred by 2015.
The oil and gas sector in Australia has an appalling track record of tax avoidance, particularly Exxon, Chevron, Shell, BG and Origin Energy with this scam.
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We are counting down the Top 40 Tax Dodgers. There are now four years of tax transparency data published by the Tax Office and we have used this data to work out which large companies operating in Australia have paid the least tax, or no tax.
Notable new economy players such as Google, eBay, Booking.com, Expedia are not near the top of the ATO list. That’s because they don’t (yet) recognise all income earned here; instead, they book Australian revenue directly to their associates offshore. They will be ranked in due course.
For other large corporations, and in particular, multinationals, the main steps in avoiding tax are made by reducing their taxable as much as they can; usually by sending it offshore in interest on loans, “service” fees or other payments to foreign associates. So, we have set a threshold. We have included only those companies which managed to wipe out 99.5 per cent or more of their taxable income over four years.
Qantas, therefore, is not on this list, although it has enormous income and has paid no income tax in Australia for many years. It misses the cut-off due to it not eliminating more than 99.5 per cent of its total income.
The airline had made large losses which were offset against profits. Many large corporations which have paid zero tax in ATO data, have legitimately made losses and have therefore built up “tax-loss shelter”.
Further explanation of methodology can be found here.
Many others however, such as ExxonMobil and EnergyAustralia, are on the list as they managed to eliminate all or most of their taxable income by “debt-loading” or other means of aggressive tax avoidance.
In this, the second iteration of michaelwest.com.au corporate tax rankings, we have ranked companies purely on the Tax Office data. We will also publish a list of Australia’s better corporate taxpayers, those companies who contribute most to the country in which they operate.
The Tax Office data is not a perfect guide. It does not record refunds, only tax payable and is often at odds with disclosures made for accounting purposes. In some cases, there are multiple entities with the same ultimate offshore parent reporting. One entity may pay zero tax, another may pay at the statutory 30 per cent rate (even if on low taxable income). We endeavour to be fair in our reporting to recognise these issues.
The data also recognises trusts as well as companies. For trusts, it is the members (investors) rather than the trusts who are ordinarily required to pay the tax. In many cases however it is fair to recognise trust structures for what they are, as tax is often the main reason these vehicles have been structured as trusts.
Companies are welcome to debate their rankings or to touch base to clarify or defend their tax practices. We will append or link these submissions.
Hydrox has been taken off the list as it never made a profit.
Using both the ASIC and Australian Electoral Commission (AEC) databases we have conducted more than 5,000 searches and counting.
Through the ASIC searches we have been able to collate the necessary information for every company on the grandfathered list, ranging from company directors, shareholders (both persons and organisations), a company’s auditor and much more. This has all been incorporated into our database, which is designed to map out these Dark Companies and tackle our driving question.
We also used the AEC database to generate an extensive list of political donations from these Dark Companies that date from the 1998-99 financial year to the present. We have designed a separate database for these figures, listing political donations from the entity itself, its directors and/or its shareholders. Each donation has been separated into recipient categories to better display the amounts funnelled to the Liberal and Labor parties and their constituencies.
The donations help indicate why the exemption, which ensures such a lack of transparency, has stood the test of time despite numerous attempts over the years from both sides of Parliament, the cross bench, the Greens, Treasury, corporate regulator ASIC and a joint parliamentary inquiry, which have all called for the exemption to be abolished. Both databases created by Michael West Media complement each other to bolster the narrative of the stories that follow.
In a similar approach to our Q.E.D. and Revolving Doors series, we will be releasing a profile each day that highlights directors of these Dark Companies, many of whom appear on the 2020 Australian Financial Review Rich List.
The ‘Secret Rich List’ project will provide considerable evidence to shore up the next attempt to repeal the grandfathering exemption, which Independent Senator Rex Patrick is scheduled to move before the Senate in early 2021.